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Think Outside the Borders

How Estonia is using e-Residency to support
location-independent entrepreneurs.

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 Estonia, a Digital
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 Powerhouse

“W
e are the first digital society in the world that has its
own state,” says Estonian president Kersti Kaljulaid.
While the story of this heavily forested North European
land may date back thousands of years, today
Estonians are known for building the world’s most digitally advanced nation as
well as producing a staggering number of globally successful companies. These
include four “unicorn” digital start-ups valued at over $1 billion: Skype,
TransferWise, Taxify and Playtech.

This year, Estonians are celebrating the 100th anniversary of the establishment of
their Republic in 1918. But for about half that time, the country was occupied,
and it was rebuilt almost from scratch in the 1990s after regaining its freedom
from the Soviet Union. Unburdened by legacy technology, Estonians entered the
internet age with a unique opportunity to build a new kind of country where
almost everything can be done entirely online, cost-effectively and fuss-free — a
supportive environment in which entrepreneurs can thrive. President Kaljulaid
emphasizes that this shift to a digital nation is based not just on new technology,
but also on new ways of thinking: “We have succeeded in going digital because
we have put people and businesses, their need for rapid data exchange and
identity verification, at the center of change.”

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 I“ wish the idea of e-Residency to spread
even more and not just on a level of being a
digital solution to manage a business, but
as a broader concept of borderless digital
life.”

— Kersti Kaljulaid, President of Estonia

AT THE HEART OF ESTONIA’S DIGITAL is an ID system allowing every

NATION citizen and resident to
securely identify themselves online and supply legally binding digital signatures.
Estonians now use their digital IDs for everything from voting to checking which
doctors have reviewed their health records, as well as access to almost every
government service and thousands of private services. Among the only things that
Estonians still need to do in person are getting married and divorced, and
transferring property rights, as it's agreed it’s probably better not to be able to do
these things instantly online.

In 2014, Estonians asked: If their country could serve citizens and residents
entirely online, why not open up their digital borders to more people? This new
population wouldn’t need citizenship or physical residency, but would still be
issued an Estonian digital ID card, enabling them to operate within Estonia’s
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 digital business environment without physically being in the country. This would
allow more people to establish and manage an E.U. company entirely online,
helping democratize entrepreneurship globally.

E-Residency Explained:
What,Why and How?
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 A
nyone can apply for e-Residency online, regardless of citizenship or location.
Applicants undergo background checks by the Estonian Police and Border
Guard Board and, if approved, are invited to pick up an
e-Residency starter kit containing a digital ID card and PIN
codes used for online authentication and digital signatures.

The benefits? Many expats and digital nomads like

e-Residency because they can run their businesses entirely online in English,
from anywhere they are. Others appreciate being able to run an E.U. company
with lower costs and less hassle. This includes a significant number of
entrepreneurs already living in E.U. countries where business costs and barriers
can be much higher. Finally, many use e-Residency because it’s trusted and can
make doing business globally easier. Thanks to Estonia’s digitized business
environment, anyone can look up who owns a company established by an e-
resident and how it has paid taxes, a transparency valued by location-
independent entrepreneurs. They can access the E.U. market, connect with like-
minded entrepreneurs and use e-services unavailable to companies registered
locally, such as payment providers.

The success of the e-Residency program rests on its being a national initiative, in
which state organizations work closely together to serve e-residents and ensure
their compliance with the rules. The private sector, both inside and outside
Estonia, adds more value by offering products and services to the growing e-
resident market.

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 I“ think being an e-Residency
company made us more trustworthy
internationally.”
— Dante Isil Ozkan, founder of OktoPeople

RECENTLY, there’s been a sharp increase in applications

from Asia, particularly India, Japan, South Korea and Turkey. 48,000
One such entrepreneur is Dante Isil Ozkan, founder of e-Residency
OktoPeople, a user-experience design agency based in applications
Istanbul with an international branch in Tallinn. “The first
thing that caught my attention was ‘work from anywhere,’’’ More than 48,000 people
from 157 countries have
says the 35-year-old, who became an e-resident in 2017.
applied for e-Residency so
“It’s a location-free business.” As a result, she is now far.

interacting with like-minded entrepreneurs from Estonia,

Japan, the U.S. and Turkey, and exchanging ideas regarding
future technologies such as AI, blockchain and SAAS
business models with a bigger focus on e-commerce. “When I think of a new idea,
different perspectives help me think globally,” Isil Ozkan adds.
Convenience and not being tied to a location are benefits that encouraged the
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 Convenience and not being tied to a location are benefits that encouraged the
Ukrainian Andrii Omelianenko to apply. The CEO of Corporate News Agency —
an online database that allows users to quickly review, appraise and assess the
risks of any company registered in Ukraine — wanted to expand his business to
the E.U. after finding initial success in Ukraine. “I was one of the first Ukrainians
who applied for an e-Residency card in Ukraine,” he says. “My expenses were
reduced significantly, and I don’t need to fly to Tallinn every time I need to make
changes in the register or sign contracts.”

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 K
aspar Korjus, managing director of e-Residency, agrees:
“E-Residency was launched to provide access to our e-
services, but it also provides access to a community of
empowered global entrepreneurs across 157 countries.” To
him, it’s all about inclusivity: “More people globally are gaining
access to the internet, but opportunities online are still not equal, because there
is still enormous variation in the costs and hassle of being an entrepreneur
depending on where you live or if you even want to live in one place. e-Residency
is helping solve that by empowering more location-independent entrepreneurs.”

Deepak Solanki, founder of Velmenni, a tech start-up in New Delhi that offers
wireless data transmission using light, or Li-Fi, as opposed to Wi-Fi, says: “I’m
running an E.U. company from India using my e-Residency card. It’s very
convenient and simple. It’s just a smart ID that you can plug into your laptop.”

Our
“ message to entrepreneurs is: focus on
your business, your product, your passion —
not on paperwork and bureaucracy”

— Kaspar Korjus, Managing Director of e-Residency

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 E-Residency and Estonia:
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 The Bigger Picture

W
ith the number of e-residents
increasing at an ever-faster rate,
the initiative is turning into an
efficient soft-power tool that raises
the country’s profile and
15
Years of using
attractiveness globally. “Most e-residents didn’t know much digital IDs
about Estonia before discovering the program,” says Korjus.
“But when they start using our digital services, they become E-Residency is a new
concept, but Estonia’s
part of the community of Estonia and more likely to
digital ID system has been
conduct business with Estonians and learn more about who used by Estonians since
2002.
we are.”

Moreover, the program generates revenue and attracts

investment. According to a recent report published by Deloitte, in the first three
years of operation, the e-Residency program contributed €14.4 million to the
Estonian economy; it is expected to add an additional €1.8 billion by 2025.

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 “E-RESIDENCY HELPS MORE find us on a map and ultimately makes our
PEOPLE country bigger,” says Korjus. “By making
more connections around the world, we are building a better and more secure
future for the Estonian people, too. Like any start-up, though, Estonia will only
benefit from this continued growth if we continue to offer real value and good
service to people around the world.” In a world where some countries are
increasingly turning inward or isolating themselves to protect national interests,
Estonia’s unique program offers new benefits to all and brings people of different
backgrounds together. “The world is changing at a rapid pace,” says President
Kaljulaid. “But Estonia will always remain committed to the freedom, openness
and democracy that has underpinned our rapid development as a digital nation.
We invite more people around the world to join us online.”

Illustrations by Michele Marconi

Estonia Welcomes
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 Estonia Welcomes
Entrepreneurs

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