Residency without borders. The Estonian example

How can a small country with 1.3 million citizens become a digital superpower? With zero tolerance for corruption, lack of bureaucracy and online solutions such as i-Voting, e-Cabinet or e-Health, among others, that enhance communication and transparency. No wonder that Skype, one of the most successful startups ever made in Europe has Estonian roots. Next step in creating a borderless business environment: the e-Residency program you might have heard of, trying to unleash the worlds entrepreneurial potential.

Ott Vatter, the program’s head of Product Management, will take the stage this November at How to Web Conference to share with us what E-Residency it’s all about, why they’re doing it, what are the challenges and struggles of a governmental startup. We took the opportunity to talk to him beforehand and here’s a sneak preview on what they’re working on.

Having lived in different countries, I would say the main advantage of Estonia is the lack of bureaucracy and the speed of light in government communications. It is actually possible to create a company online in 20 minutes, pay taxes in 10 minutes and vote for parliamentary elections in 2 minutes. Besides, we have zero tolerance for corruption, thus offering equal opportunities to everyone. The average salary is 1,000 EUR: not too high on the European scale, but attracting many foreign investments, Ott Vatter explains.

First proposed in 2014, the e-Residency program, developed by Enterprise Estonia (which is a state run foundation), enables people from anywhere in the world to become digital residents of Estonia.

The main purpose of the e-Residency project is to enlarge the economic scope of Estonia and give an opportunity to everyone in the world to do business here, Vatter continues.

The project had as a starting point an idea that emerged out of the priorities established by the Digital Agenda for Estonia 2020: bringing on board 10 million e-Estonians that will have virtual residence and their electronic identity in the form of digital ID Cards. In this way, foreign citizens will be able to take advantage of the secure and convenient services now available for the Estonian population.

The official program was kicked off in the beginning of December 2014, fuelled by a common vision: to make the advantages of Estonian business owners widely available to all the people out there.

E-residency is not equivalent to citizenship or permanent residency. It does not give the right to participate in elections, or to enter Estonia or the European Union without a visa. Moreover, the Estonian organization can decline applications. However, those that are accepted have a whole range of benefits: they receive an eID, similar to the Estonian ID, that allows them to sign documents digitally(including legally binding contracts), to verify the authenticity of signed documents, as well as to encrypt sensitive documents.

Moreover, the eID can be used to establish an Estonian company and manage it from anywhere in the world. By providing access to the extensive privileges of Estonian e-banking, the eID also enables its owner to make digital payments to service providers and to file online tax reports if the company is subject to Estonian taxation. All these online, without setting foot on Estonian ground.

According to Ott Vatter, 6000 e-Residency applications from 118 countries have been filed to date, and more than 400 Estonian registered companies are owned by e-residents (their number has doubled since this spring, when the online application platform was publicly opened). 29 Romanians have already applied for e-Residency, and 15 of them are already digital citizens of Estonia.

The E-Residency team was committed to making the program as efficient as possible. This is why its scope changed over time. As Ott explained us, in the beginning applicants were required to fly to Estonia to receive their e-residents cards. From the 13th of May, however, they made one significant improvement: e-residents can pick up their documents in any one of the 38 Estonian embassies around the world.

Getting the e-Residency card only costs you 50 EUR. However, you should fulfill some eligibility criteria: you have to be at least 18 years old and pass all the required background checks. After you’re accepted you become part of the e-Residency community, now including Guy Kawasaki, the Prime Minister of Japan, Shinzō Abe, or the Swedbank President and CEO, Michael Wolf.

Most of the e-Residency applicants come from Russia, Finland (over 20%), the United States, or Asia. Some of them are driven by curiosity, but most applicants are interested in doing business in Estonia, a country that provides the ideal conditions for helping global tech companies grow.

The world will see a drastic shift in the work culture in the decades to come, with digital nomadism taking advent. Countries will be competing for talent and I believe that governments who realize this the earliest, will have a competitive advantage, Ott concludes.

Find out more about the e-Residency program and meet Ott Vatter, its Head of Product Management, this November at How to Web Conference 2015. Get your Early Bird ticket by Nov 16!

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