Estonia’s Minister of Entrepreneurship and Information Technology, Andres Sutt, stated in an e-Residency press release that the companies created by e-residents enrich the local business environment and enhance Estonia’s image as an attractive destination for foreign investment.
Sutt stated, “Our e-Residency program empowers entrepreneurs from all over the world by providing them with the opportunity to create and run a company entirely online.” “At the same time, international companies and talent bring new skills and knowledge to the Estonian business space. This helps local businesses grow and makes them more competitive on the world stage.“
The minister, however, made it clear that in the current security situation, e-Residency cannot be used to avoid sanctions or do business in a way that is against the law. He also said that making sure security is still the top priority for the e-Residency program.
“The program grants access to Estonia’s public e-services ecosystem and the European market to all law-abiding businesses,” he added.
It is anticipated that the number of active companies will increase swiftly.
Lauri Haav, the managing director of the Estonian e-Residency program, stated that e-residents have created new businesses at a record rate in recent years: while it took five years to reach the 10,000 business mark, it only took two more years to double that number.
“The e-residency program has opened up a whole new market for local businesses, giving them the chance to grow internationally, hire new people, and make more money,” said Haav, adding that the program has also helped to revitalize the local business services sector.
E-residency can signify a connection with the Estonian state based on shared values.
He said that Estonia was the first country in the world to offer e-residency to people who were not citizens. This got a lot of attention and trust around the world.
The CEO explained, “Today we see a clear shift from quantity to quality as more and more people join the program with the intention of starting a business.” Consequently, the economic impact of the program is expected to grow.
Nearly 20% of all limited liability companies in Estonia will be set up by e-residents in 2021.40% were created in the ICT sector, while 24% were created in the professional, research, and technical sectors.These businesses employed nearly 4,000 individuals, and every fifth business was economically active.
“When looking at these numbers, it’s important to keep in mind that, despite the fact that the establishment of new businesses has increased rapidly in recent years, many of them are still taking their first steps, i.e., developing business plans and testing their products or services in various markets and target groups,” Haav said. “At that time, economic activity is still low, but we expect the number of active companies to grow quickly in the coming years.”
The Ukrainian e-resident: This is the true Estonian success story.
“Estonian e-residency offers the kind of flexibility that modern businesses seek, which is a huge competitive advantage,” says Natalia Storozhuk, director of the startup, digital PR service PRNEWS.IO and Ukrainian e-Resident. The local business community also works very well together and encourages people to follow their dreams.
Storozhuk says that inclusiveness, openness, and innovation are the best words to describe Estonia’s e-Residency program.
“During an online conversation with a potential Canadian client, I mentioned that my business had been established through the Estonian e-Residency program,” he recalls. “The following instant, my caller presented me with his e-Residency card, establishing a special bond that has driven our collaboration ever since. This illustrates the global reach of the e-Residency network, which benefits the Estonian economy.“
Storozhuk remarked that the e-Residency team has provided exceptional assistance outside of business-related matters.
“The war in Ukraine is terrible, but there is no doubt that, after the war, Ukraine will rebuild itself using innovative technologies for improved governance,” she said. “In digital matters, I believe that all nations have a lot to learn from Estonia. Over 5,000 Estonian e-residents in Ukraine are already well-versed in what it means to be a part of a highly developed digital society and how creating and operating a 100 percent digital business puts the entire world at their fingertips. This is the true success story of Estonia.“
More than ninety million euros in direct state revenue.
The Estonian e-Residency program was launched in December 2014 with the intention of providing foreign citizens with secure access to digital services provided by Estonia’s e-government ecosystem. Estonia has so far signed up more than 90,000 e-residents, who have then started about 20,000 new businesses.
In addition to the indirect effects on the economy, such as the growth and investment in Estonian companies that offer services to e-residents, the e-residency program has directly brought in more than €90 million for the Estonian state budget, of which €75 million came from taxes.
