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.