Business, Estonia, Good for Business, Internet, Technology

The largest number of businesses was registered in IT and business consulting, around 50% of the e-residents who created a company in Estonia are citizens of the European Union, Enterprise Estonia said.

"A large share of businesses by e-residents focus on creating smart jobs and high added value. E-residency provides an unique opportunity for global market players to manage their business regardless of location. This also makes creating a business in Estonia attractive for citizens of the European Union, as in member states, options for doing business remotely are much more limited,"  Ott Vatter, manager of the e-residency program,said.

The range of areas in which Estonian businesses launched by e-residents operate is constantly expanding. Many e-residents operating in forestry and agriculture, health, trade or education are paying their taxes in Estonia.

"That means that the e-residency program is capable of satisfying the needs of entrepreneurs operating in different economic sectors," Vatter said.

The number of businesses established by e-residents has rocketed over the past two years, during which over 7,000 enterprises were created.

"Compared to last year, the number of active businesses that were created by e-residents and are paying taxes in Estonia has grown 58 percent. The money paid by them is used in education, culture and social work, and thereby directly benefits the people of Estonia," Vatter said.

The e-residency strategy 2.0 devised with specialists in various fields at the end of last year set the objective to foster growth of value in businesses created by e-residents instead of simply increasing the number e-residents, and the new strategy is already delivering some results. 

"Data by the Tax and Customs Board shows that the average tax revenue from Estonian businesses created by e-residents has grown 30% on year," Vatter said.

Vatter noted that the program, which will soon turn five, has earned much international recognition and user confidence.

"We can see clearly today that e-residency applications are submitted with the clear objective of starting a business," he said. Additionally, a number of e-residents who registered their enterprise several years ago but had not yet launched their business activities, have also started paying taxes in Estonia.

"A business idea may take years to mature. We'll be happy to see them materialize, and the people of Estonia will start benefiting from the tax revenue, too," Vatter.

The e-residency program was launched at the end of 2014 with the aim of offering foreign nationals secure access to the e-services of the Estonian state. Holders of the e-resident's digital ID-card can digitally sign documents and log onto portals and information systems which recognize the Estonian ID-card. E-residency does not give its holder citizenship, tax residency, a residence permit or a permit to enter Estonia or the EU.

Since the inception of the program, the number of e-residents has surpassed 62,000 and e-residents have established over 10,100 companies in Estonia which employ some 1,700 people in total. Direct income from the program is estimated to have reached 31 mln euros during the almost five years that the program has been in effect.