All You Need to Know About Estonia’s E-Residency Program

Estonia has become the first country in the world to offer a transnational digital identity. It’s attracted the attention of entrepreneurs and digital nomads worldwide, but there’s still a huge amount of confusion about the benefits of the E-Residency Program and what e-residency actually means. Let's take a look.

What Is E-Residency?

It’s a way of accessing Estonia’s government services without ever actually visiting Estonia.

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You can start a company with all the benefits of the EU legal framework as well as remotely access low maintenance administrative tools such as tax declaration and company formation. In 2009, Estonia broke a world record for the “fastest time to register a new legal entity” - 18 minutes.

In short, this beautiful Baltic country is offering remotely accessible services that would normally only be available to actual residents of Estonia. For digital nomad entrepreneurs that don’t have a fixed location, this is a huge deal and a big step towards full location-independence, and to top it off, it comes with minimal bureaucracy and a clear, desirable tax framework.

What Is E-Residency Not?

E-Residency does not mean actual residency. It’s not a visa, a right to remain, an identification card or citizenship, nor does it come with any of the social rights that Estonians locals have.

More importantly, it’s not a way of avoiding tax in any way, although I will elaborate on the tax benefits later on.

What Are the Benefits of Becoming An Estonian E-Resident?

Here’s a clearer, more concise list of benefits:

• Very low administrative burden
• 0% corporation tax (but 20% income tax)
• A euro-currency or multi-currency bank account
• More trust due to incorporating in a EU state
• Access to more online services such as PayPal
• Modern banking that can be managed remotely
• You specifically want a business in Estonia
• Save time and money by using government software

But here’s the big question, do you need to be an Estonian e-resident to have all of this? Well, the answer to that is no. You can set up a more cost-effective international bank account to avoid currency conversion fees, and you can start a company in a country with minimal accounting requirements or zero tax.

However, depending on where you reside and where you’re setting up shop, it can be difficult; usually, it’s impossible without having to immigrate or at least spend time in the country while you set up a bank account and sign documents.

Bottom line: becoming a resident or starting a company in another country usually feels like a bit of a hack. It’s possible, but few countries have actually made the effort to make the ordeal convenient. E-residency is the solution for the digital era.

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by Daniel Schwarz via SitePoint