The Estonian e-Residency programme may celebrate its 10 years in 2024, but it’s in no way losing its steam. The programme, which allows individuals to establish a digital presence in Estonia, has become attractive for entrepreneurs, freelancers, and digital nomads seeking a stable and secure business environment. Estonia, with its low taxes and simplified bureaucracy, is only growing in popularity, shows recent data.
As published by e-Residency, 6,037 foreign nationals were issued an e-resident digital ID between January and June this year, and e-residents established 2,450 new Estonian companies. According to Liina Vahtras, Managing Director of e-Residency, interest in establishing companies in Estonia remains high. “The number of new e-Residency applications is 7 per cent higher than in the first six months of 2023. Similarly, 7 per cent more companies were created in the first six months of 2024 compared to the same period last year.” About these figures, Vahtras noted: “These results have exceeded our expectations in the face of the economic downturn.”
The approval rate for e-Residency applications was 93 per cent as 6,482 applications were received. The most active participants in the programme were citizens of Spain, Ukraine, and Germany, who submitted 917, 448, and 378 e-Residency applications respectively. The citizens of the same countries also established most of the new e-resident-founded Estonian businesses.
Vahtras said that the programme’s primary goal is to boost the Estonian economy as an innovative business environment for global entrepreneurs, and to provide a positive return on investment for the Estonian economy, educational system, and culture. The direct economic impact of the e-Residency programme for the state budget amounted to 31 million euros in the first half of 2024. In addition, e-resident entrepreneurs contribute over 11 million euros to Estonia’s economy annually by using local business services.
Taavi Kotka, Chairman of the e-Residency Board and co-founder of the programme, says that no other country has reached Estonia’s level in offering digital entrepreneurship services, but the competitive advantage will only remain if e-Residency boldly takes the next technological leap: “We need to start applying new technological possibilities, such as fingerprint and facial image capture, as well as real-time identification of documents and individuals via mobile app. This would make e-Residency more convenient for the user and more secure, as well as beneficial for Estonia.”
According to Kotka, the goal is to eliminate the need for a physical digital-ID card for e-residents as soon as possible. He says that the pilot projects are expected to reach e-residents within the next couple of years. This echoes the guidance of the e-Residency Board, which includes representatives from government agencies. In 2023, the direct economic revenue from the e-Residency programme to the state (labour and dividend taxes, as well as state fees) was €67.4M. The total programme-related expenses, including contributions from government partners, amounted to €7M in 2023, making the programme’s ROI (return on investment) reach nearly 10 for the Estonian Government last year.
To date, Estonian e-resident status has been granted to 117,000 people from 185 nationalities, excluding repeat applications and invalidated identity cards. E-residents have founded or co-founded more than 31,800 Estonian companies, accounting for approximately one in five new companies each year. Furthermore, 38% of Estonian startups are connected to e-residents. All in all, since the programme’s launch, the direct economic impact on the Estonian state has amounted to €244M.
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