Why Estonia offers e-Residency

The idea

Over the last 20 years, Estonia has made 99% of its government services available online, accessible by citizens and residents through secure, government-issued digital identities. This means almost any interaction with the state - such as voting, filing tax returns and registering a birth - can be done entirely online from virtually anywhere in the world. In addition, these same digital identities can be used to access an increasing number of private sector services such as online banking.

Estonia’s digital infrastructure has continued to develop, like a startup refining its services, yet the number of users who could benefit was always limited to the number of citizens and residents of the country. If the number of users could also be scaled up, like a startup, then it was theorised that all users would benefit from the improvements brought about by this economy of scale and the startup would also return larger benefits to its shareholders – the people of Estonia.

The birth of e-Residency

In 2014, Estonia decided to provide digital identities, along with access to Estonia’s digital services, to citizens of other countries who do not have residency in Estonia. These people were called e-residents and received e-Residency digital ID cards, offering access to many of the same government e-services previously only available to Estonians living in Estonia.

By taking this step, the Estonian government turned citizens of countries all over the world into potential ‘users’ of Estonia’s services. But what was in it for Estonia? Well it was hoped that e-Residency might:

  • Support economic growth and innovation potential in Estonia;
  • Share the digital nation’s technologically innovative capabilities with the world;
  • Spread awareness about and preserve the country’s rich history, culture, and language with people around the world; and
  • Impart Estonia’s important values in work, including working flexibly, assuming an entrepreneurial attitude, and finding self-fulfilment in one’s career.

e-Residency today

As of today, 80,000 foreign nationals from 170+ countries have become e-residents, the main benefit being the ability to establish and manage a location-independent company in Estonia entirely online. In fact, e-residents have registered over 16,000 companies in Estonia, in diverse sectors including IT, marketing, e-commerce, business consulting, publishing, and trade in physical goods. You can read more about the individual stories of e-residents on our blog.

The e-Residency programme has already proven beneficial for citizens, residents, e-residents and Estonia as a nation. The programme has paid for itself by bringing more direct income to the Estonian state, a worthy investment for Estonian taxpayers. E-Residency has also helped people around the world access entrepreneurship and conduct business globally in ways not previously possible and, in doing so, has provided more business, jobs and investment for companies in Estonia.

More difficult to quantify but just as important are the cultural benefits and ‘soft power’ the programme has brought: raising awareness of Estonia abroad, spreading knowledge about the country’s history, language, culture, and business environment, encouraging tourism and work migration, and instilling confidence and pride in the country about its unique offering to the world.

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