Estonia is cashing in on its e-Residency concept

In 2014, the Estonian government started issuing digital IDs to foreigners. The idea has caught on, and the Baltic country could boast a million e-residents by 2025.

Marian Männi
Marian Männi Eesti Ekspress, Estonia
Source: Eesti Ekspress
Estonia is cashing in on its e-Residency concept - NewsMavens
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Why this story matters:

In some countries, it takes months to open a company. In Estonia, it takes 15 minutes. And you don't need to be Estonian. You don't even need to be in Estonia.  All you need is a digital signature. 

Foreigners can have an Estonian ID number that can then be used for banking, company formation, payments and taxation -- a perfect solution for location-independent entrepreneurs.

With tens of thousands of users already, the concept is a resounding success. Estonia has recently partnered with Deloitte to look into whether Estonia could start collecting taxes from other countries and become a global virtual tax authority.

The head of the project, attorney Merit Lind, said that the idea of a global tax authority may sound crazy, but it's doable.

The e-Residency program has been beneficial to Estonia in many ways. The former Soviet republic is now viewed as a forward-thinking and innovative Northern European state. But e-residency is also an excellent alternative source of income for the country.

Estonia faces a rapidly ageing population, and EU support is forecast to decrease soon. The government needs an alternative source of income. And with e-Residency, it may have found just that.

Details from the story:

  • In three years and five months, Estonia has received 37,000 e-residency applications.
  • The study predicts that, by 2025, there will be a million e-residents, who will have founded 175,000 companies.
  • E-residents have to pay 100 euros to apply, but the biggest benefits to Estonia come from indirect sources.
  • Even if the million users target is not reached, Estonia can still count on a profit of 1.8 billion euros, mostly from indirect benefits like job creation (lawyers, accountants, auditors) and foreign investments driven by positive PR.

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