Estonia has been getting a lot of press lately thanks to their progressive stance on things like blockchain technology, but they’re also getting attention for a special program that they run called the Estonian e-residency program.
It’s an interesting program which is meant to entice businesses to set up shop in Estonia, and for the plethora of digital nomads out there who are looking to establish a European home base, it’s a tempting offer.
Estonia is a conveniently located nation with first-class amenities, and now that they’ve made doing business in the country so simple, it’s that much more attractive. However, many people are confused about how the program works, or even what it is exactly.
So, in this article, we’ll be covering the basics and helping you to learn about this great program. We’ll cover what it is, what it’s not, and how you can take advantage of it for your business.
While it doesn’t grant you a first-class ticket to citizenship, it does provide possibly the most convenient and easiest way to manage a business from anywhere in the world.
What is Estonia’s e-residency program?
Estonia’s e-residency program is a digital program which allows for non-Estonian residents to have access to services like banking, taxation, and legal assistance. It essentially allows you to set up a company within the country without actually needing to be a resident there: “Estonia is the first country to offer e-Residency, a government-issued digital identity and status that provides entrepreneurs with access to Estonia’s transparent digital business environment.”
The program is targeted specifically at location independent professionals, and it helps to remove a lot of the red tape involved with doing business in a country where you don’t reside.
However, it should be noted that the e-residency program does not actually give you citizenship or residency in the country. This program is solely used for the purpose of doing business, and you won’t acquire any other rights awarded to the country’s citizens.
Also, while you will receive a physical e-residency card, it can’t really be used for anything outside of the internet. Its sole purpose is to be used for secure logins for government and banking portals within the country so that you can manage your business.
If you were hoping that the e-residency card would give you access to other areas of the EU or act as some type of special club membership, it doesn’t, sorry.
What are the benefits of Estonia’s residency program?
If you were hoping to be on your way to an actual residency in Estonia, then you’ll no doubt be disappointed by the program as it doesn’t grant you access to actually live in Estonia. However, if you’re more interested in running your business from Estonia, then it can be a great opportunity as it allows you to easily start a company with access to the EU market and payments, while living anywhere in the world.
For businesses who are looking to set up shop in Estonia, the e-residency program will give them easy access to banking, payment processors, and the business-friendly atmosphere that Estonia has become known for.
Digital nomads who establish businesses in Estonia will also be able to take advantage of a pretty favorable tax rate. You’ll pay just 14-20% on distributed profits, but you’ll actually pay zero dollars in taxes on retained and reinvested profits!
You can also enjoy all of this from anywhere in the world, without ever needing to set foot in Estonia or even your bank thanks to the programs digital signatures and verification procedures.
Who is eligible for Estonia’s e-residency program?
Most people should be eligible for the e-residency program as long as they are 18 years or older and do not have a felony criminal record. However, e-residency is never guaranteed, and the final decision is left to the Estonian police and border guard.
How does the residency program work?
The best part of Estonia’s e-residency program is just how easy it is to get approved. If you’ve decided against opening a business abroad before due to the sickening amount of red tape, then Estonia will be like a breath of fresh air.
The entire process can be completed online in a few weeks, without ever needing to actually visit Estonia. You can view the application here if you’re interested in seeing the requirements, which include a a copy of your government-issued ID, a passport-style digital photo, a motivation statement, have a credit card and pay a fee of 100 Euros.
Once you’re approved you’ll need to make an appointment and pick up the card at your chosen Estonian embassy. Be prepared to be fingerprinted and supply valid identification such as a passport, and that’s about it. It’s possibly the easiest way to conduct business in a foreign country ever.
After completing your identity verification, you’ll get a smart card reader and an ID card which you can use for secure logins to government and banking sites within Estonia. It even allows you to encrypt data for security purposes.
How can remote professionals take advantage of it?
Some people may be confused about what exactly they should be doing with their e-residency. After all, if it doesn’t offer any actual residency benefits then what’s the point?
If you’re a location independent freelancer or business owner, then you’re likely aware of the hassle that’s often involved with starting and managing a business. There’s always paperwork you need to fill out and the need to find creative ways to avoid doing things in person.
With Estonia’s e-residency program, digital nomads can finally run a business completely online, in a trusted EU country no less! The program allows you to run a company from anywhere in the simplest manner possible, and that’s a beautiful thing.
Particularly if you need to establish a European arm of your company or if you’re having trouble getting a bank account in the EU. Keep in mind however that Estonian banks are not required to do business with you, and they’ll likely want you to show strong business ties to the country before granting you an account.
In closing, Estonia has been working hard to establish itself as a business haven, much like Hong Kong did in the past. However, nobody has made it easier to establish a foreign business than Estonia, and their e-residency program has really pushed boundaries in this department.
They’ve done more than create a great program though, they’ve actually set a precedent. One that other countries will be expected to follow in the future if they want to attract foreign companies, and that’s great news for remote entrepreneurs.
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