Estonia e-Residency Program Introduction
Running on its 6 year, Estonia e-Residency program has steadily grown a strong population of over 60,000 e-residents. Launched by Estonia and developed by Enterprise Estonia, this program has successfully created over 10,000 companies. A country without borders, businesses can now be easily set up with a swift click. As of late 2015, sign-up rate was estimated to average around 150 applicants per week, highlighting the attractiveness of this program.
Introduction to Estonia
Located at the heart of the Baltic Sea Region, the attractive Estonia offers a friendly business environment, strong political climate and a liberal economic policy. With a population over 1.3 million and a high literacy rate of 99.8%, Estonia boasts a strong talent pool. Their low costs of doing business have attracted multiple international companies to Estonia. The birthplace of Skype, Estonia is also home to many leading digital natives and a strong technological infrastructure.
Why is Setting Up a Business in Estonia great?
For most investors looking to set up a business, Estonia has always been ranked highly. Setting up a business in Estonia extends to a myriad of benefits – territorial, monetary, technology, legal and so much more. Estonia e-Residency program has gained traction among many entrepreneurs looking to set up a business in Estonia.
A member of the European Union, setting up a business in Estonia also gives you the power to access other competitive European markets. With its strategic location, Estonia is within a three-hours flight from major European, Scandinavian and Russian cities.
Linked to every other European Union member, an investment in Estonia also means an indirect investment into one of the world’s biggest market – the European market. Presently, Estonia is home to one of the best business climate in the world. Characterised by its free business and trade in alignment with the European Union practices, Estonia is one of the best countries to invest in.
A thriving nation in creating and implementing technological solutions, Estonia is also home to a strong electronic infrastructure and talented engineers. With its technological expertise, digital security measures are constantly improving. The country is also home to many cryptocurrency exchanges and wallets.
Since the 1990s, Estonia has reformed its legal system to prioritise boosting its economy. Much of its legislation are founded on facilitating entrepreneurship and promoting the attractiveness of its business environment. For example, Estonia has a robust legal system with various patents and price controls laws.
Objective of Estonia e-Residency
A digital residency program that you can enjoy just with a swift click. This revolutionary initiative launched by the government of Estonia suggests Estonia’s great leap into developing a digital nation.
Estonia e-Residency program allows non-Estonians to gain access to exclusive services. These services include company formation, banking, payment processing, taxation and more. Assigned to a simple smart card, e-residents can easily sign documents and form contracts, allowing them to also benefit from Estonian laws.
Targeted primarily at entrepreneurs, e-residents can establish and manage a paperless European Union-based company online. The benefits of e-Residency is simply too much!
Application for Estonia e-Residency
To set up your transnational digital identity, you will need to first gather the necessary documents. These documents include a government-issued identification, a passport-style digital photograph and a motivation statement. To submit your application, you can go online to the e-residency website. After the successful submission, a one-time payment of one hundred euros is to be made. Upon your application, background check will be conducted by the Estonian Police and Border Guard Board. The process will take an estimated time of six weeks.
Once granted the approval of e-Residency, newly acquainted residents will be invited to collect their e-Residency kit.
Limits to Estonia e-Residency Program
On top of enabling its digital residents to set up a location-independent business, the program also comes with a myriad of advantages such as increased access to secure and convenient digital services. Nonetheless, do not mistake this e-Residency program as a citizenship.
There are certain limits the program entails. For example, it does not confer citizenship, tax residency, residence or right of entry to Estonia or to the European Union.
Facilitating business setups, the program is not an alternative to a visa or a residence permit. Your e-Residency citizenship will only allow you to gain access to registering and managing an online European Union-based company, a marketplace of service providers and network with a global community of e-Residents.
Additionally, you can also share all the convenience and ease that Estonian residents benefit from. You may conduct your banking activities online, gain access to international payment service providers, digitally sign, encrypt and authenticate documents.
Advantages of e-Residency
Your corporate home can be anywhere. The Estonia e-Residency program allows you to establish and manage an European Union-based company online. With a simple swift, business transactions can be managed easily without the need for any travel.
With an easy access to a marketplace of service providers, your digital journey will be a breeze. As administration are largely conducted online, this helps you to benefit from a sizeable amount of cost savings.
As a e-Resident, you can also access a simple and fair tax system. If your business profits are undistributed, you can enjoy a 0% tax rate. This means that so long as your profits are reinvested rather than distributed as dividends, you will not have to pay corporate tax. Hence, if you are looking to set up an investment firm, this might be ideal for you.
With a strong security system, the e-Residency program promises digital signature and encryption tools that will provide necessary protection to its e-Residents. This means that fraud or deception is unlikely to take place.
Disadvantages of e-Residency
Albeit an e-Residency, this program is definitely not a tax residency. As such, you will still have to pay taxes in your home country.
While the Estonian government has taken several security measures, we cannot guarantee that this solution will be fully free from any cyber-crime. After all, any digital solution ultimately is still at risk from cyber-crime. If your business setup contains highly sensitive and confidential content, it might be necessary to relook into your e-residency passport.
A Digital Resident?
Estonia e-Residency is no doubt a digital gateway to your business setup. Promising business freedom, the benefits that you can reap from this e-Residency program is numerous. However, if you’re thinking of gaining a citizenship, residence permit or rights of entry into Estonia or the European Union out of this program, this is definitely not for you. Nonetheless, you should still review your business proposition and the potential cons of the program before applying for your new “passport”.
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