The Estonian success story of being a technologically advanced country dates back to the 1990s when efficient and digital governing solutions were developed and implemented. Since then its digital infrastructure has continued to develop and mature. At one point it started gaining attention from abroad. Estonia’s e-government solutions have been exported to several countries since then, as a whole or in part, such as its digital border declaration systems. This led to the idea of offering Estonian e-solutions not only to other countries, but also to the citizens of those countries.
This idea became a program, e-Residency, which was launched in full in 2014 with the ambitious goal of having 10 million e-Residents by 2024, aimed towards the search for independent entrepreneurs, attracting them to use Estonian infrastructure, such as company registration, online banking and the filing of taxes. An extra bonus for Estonia itself would be if e-Residency were to attract e-Residents to use the goods and services of local entrepreneurs, whether it be accounting, marketing or programming services. The backbone of e-Residency is cryptography, Estonian digital infrastructure and electronic rights law.
Estonian e-Residency, a program which offers foreigners the chance to establish an Estonian company and manage its operations worldwide through a digital platform, is especially suitable for digital nomads and freelancers as it allows electronic identification and personal authentication as well as the digital signing of documents. E-Residency is a perfect example how crypthography and proper infrastructure can allow individuals to conduct business in Estonia while permanently living abroad or travelling frequently.
Even though it is often confused with real residency, it has to be said that e-Residency would not confer any rights to reside in or travel to Estonia, as it is just a tool to help run and maintain a paper-free company in a country where doing business has been made easy. We strongly recommend you apply for Estonian e-Residency if you are considering opening an Estonian company although it is possible to obtain e-Residency without the registration of a company in Estonia.
e-Residency will enable you to:
- establish a company eletronically
- be identified and authenticated by financial institutions or even by other e-Residency or Estonia ID card holders
- digitally sign documents and contracts
- access e-banking services
- administer the company from anywhere in the world
- access online payment service providers
- declare Estonian taxes online
Benefits of opening an Estonian company:
- Company registration takes no more than a day
- Low startup and maintenance costs
- 0% corporate income tax until distributions are made, which guarantees more money to invest. However, please check whether your company is subject to taxation in another jurisdiction.
- A transparent tax system with a low level of bureaucracy
- Increased perception of trustworthiness as a result of company registration within the EU
- Inclusion in the EU’s legal framework (eIDAS – https://ec.europa.eu/digital-single-market/en/trust-services-and-eid)
- An Estonian ID card which allows you to use online services in Estonia, such as government websites and online banking.
Since the program is constantly evolving, obtaining an e-Residency is becoming easier as the program takes shape. It is also becoming more attractive. For example, digital signatures and authentication have the same legal equivalence to handwritten signatures and recent changes in EU law mean that within the next few years Estonian e-Residents will be able to easily identify themselves, access online services, and conduct business across Europe according to eIDAS regulations. https://ec.europa.eu/digital-single-market/en/trust-services-and-eid
Becoming an e-Resident
Becoming an e-Resident will require you to complete a short form, provide scans of your passport along with a photo and a written explanation of why you would like to become an e-Resident, all of which have to be sent to the Police and Border Guard, who will review the application.
If the application is accepted, within two months you will receive an invitation to an Estonian embassy in a convenient location, or at a pickup point in Tallinn, for a short interview and issue of your ID card. There is a link to a list of Estonian embassies at the end of this article.
Since May 2017 it has been possible to open a fully functional current account remotely as well as receive a payment card using your e-Residency with the innovative digital bank Holvi. For more information please visit https://about.holvi.com
How to proceed
Although the process of becoming an e-Resident is fairly easy, registering a company requires a little more time. This involves registering a legal address (necessary for registering an Estonian company), opening a corporate and personal bank account, completing forms and hiring an accountant. HandelsHaus will be happy to assist you in becoming an e-Resident of Estonia when registering your company through us. We are here to provide the following assistance:
- obtaining a registered address
- bank account opening (also remotely)
- company registration
Please note that help in applying for e-Residency is a part of the company registration package and is not offered separately.