What is Estonian e-Residency and Ways to take advantage of e-residency

2 years ago   •   .5 min read

.By İlayda Birol
.Table of contents

The Estonian government has been a pioneer in digital governance for many years. The first e-Residency program was launched in December 2014, becoming the first country to provide its citizens with a digital identity anywhere in the world. Now anyone can apply for an e-Resident's digital ID and gain access to secure online services provided by various Estonian state agencies. This gives you access to any service from your home country or any other country in which it operates an embassy or consulate.

Important advantage of having a business in Estonia is the country's simple and favorable tax system, including a 0% corporate income tax on reinvested profits, which can result in significant cost savings for businesses.

What is Estonian e-Residency?

Estonian e-Residency is a government program that allows anyone to become an e-resident of Estonia. Importantly, the programme allows you to start and run a business in Estonia, giving you access to the EU market and more. To be eligible for Estonian e-Residency, you must have an address in Estonia or plan on spending at least five days per year in the country. If you are a non-EU citizen with no ties to the EU or European Economic Area countries (Norway, Iceland) and looking to take your business into these areas, this may be music to your ears!

Why should you apply for e-Residency?

If you’re an entrepreneur, or have a side hustle, an e-Residency could be for you. It allows you to establish a business in Estonia and take advantage of the country’s tax system as well as its robust infrastructure and support from the government. Estonia is known for its IT-friendly policies that make it easy for companies to do business there.

Pros and Cons of E-residency in Estonia
For detailed information about e-residency in Estonia and to benefit from the advantages of opening a business with e-residency, check the wamo blog.

The country has a low corporate tax rate at 20% compared to other European countries such as France (34%), Belgium (33%), Italy (30%) and Germany (30%). Once established in Estonia, your company will have access to all the benefits of e-Residency: secure digital signing using your ID card; receiving payments digitally; setting up Estonian bank accounts; paying Estonian taxes online; applying for visas digitally through embassies around the world; engaging with government services including healthcare insurance programs; being able to travel without worrying about losing your passport or visa documents because they are all stored digitally on your ID card.

The Pros of being an e-Resident?

Estonian e-Residency is a government initiative designed to attract foreign investors and entrepreneurs to the country. The program is open to anyone who wants to start a business in Estonia or any other country in the EU. If you are an e-Resident, you can establish an EU company from anywhere in the world, including your home country.

What are the Cons of being an e-Resident?

There are a few things to consider before you decide to become an e-resident: You will have to pay a fee of 50 euros for your digital ID. This is an annual fee and it can be paid online or at any Estonian bank branch in the world. You can also choose not to renew your digital ID at the end of its validity period, which is two years. However, if your card expires before then, it will be considered invalid and you won't be able to use it anymore. If you want an additional card with a different name on it (like your business name), that will cost 15 euro. If you want access beyond Estonia’s borders, such as accessing online financial services from abroad—this could cost anywhere between 200-500 euro.

The Pros of choosing Estonia?

Estonia is a relatively small country with a population of 1.3 million people, but it's one of the most advanced countries in the world. It has a high-quality education system and low crime rate. Specific tax calculation for e-residents in Estonia tax rate for e-residents is 20% the same as it is for Estonian citizens. Foreign income, foreign companies and foreign assets are not subject to any taxes or fees imposed by the Estonian government. Estonia does not have a value added tax (VAT) system but has one of the lowest corporate income tax rates in Europe at 20%. There are no personal income taxes on dividends, interest or capital gains earned outside of Estonia.

How to get an e-resident's digital ID

Once you have decided that you want to become an e-resident, the next step is to apply for it. You can apply for e-Residency by filling in an online application form.

You will need to provide your personal information, a valid ID and proof of residency. The process takes about 5 minutes to complete once all the details have been provided correctly and if there are no errors in the information provided when applying online or uploading documents. Here’s a handy list:

  • Create a digital ID account.
  • Fill in the application form and submit it.
  • Wait for an email confirmation from the Estonian Police and Border Guard Board (PPA). This can take up to two weeks, so be patient!
  • Download the digital ID app for iPhone or Android; you will need a smartphone to use your e-resident's digital ID card on the go!
  • Take a photo of yourself using your phone camera (make sure there's some good light so that it is easy to see your face)
  • Upload this photo through our app as well as fill out any missing information (namely address details).

Digital ID be delivery

  • The digital ID will be sent to you via email.
  • You can also pick up your digital ID from an Estonian embassy or have it delivered to your home address.

Last word on Estonia’s e-Residency programme

This programme is a result of the Estonian government's ambition to become a leader in the field of digital governance. The country has been known for its pioneering e-government initiatives, which include an online voting system that allows citizens to vote from anywhere in the world as well as an electronic healthcare system that lets patients access medical records.

Estonia's e-Residency programme has received immense international attention ever since it was first launched in 2014. It's currently one of the most accessible and straightforward ways for businesses and individuals to run their business remotely while being connected with Estonia's economy, society, and infrastructure.

The Estonian e-Residency programme has many benefits for both the country and individuals. Estonia is a leader in digital governance and e-residency is the best way to take advantage of this and be part of it. With an e-Resident digital ID you can set up a company, get access to financial services, Sign documents digitally, receive payments from any place in the world and more!


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