Estonia leads global innovation by introducing digital residency, making it the world's first nation to offer e-residency.
Get the World Connected: Estonia's Game-Changing e-Residency Program
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- 🔒 Battling for Virtual Supremacy
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You've likely heard of Estonia, the Baltic nation famous for its mind-blowing digital advancements. Now, it's poised to make history once again with a fresh, bold move – the world's first supranational e-residency scheme.
Few people could have imagined that a hundred years ago, the Estonian poet Gustav Suits would lay the groundwork for today's tech-savvy society, envisioning a future where Estonians remained Estonian, but became Europeans. On December 1, foreigners can now claim a piece of that vision as Estonia's ambitious e-residency project goes live.
Edward Lucas, senior editor at The Economist, is set to become the very first e-resident, with Steve Jurvetson, an American venture capitalist with deep Estonian roots, and Tim Draper, Jurvetson's colleague, joining close behind.
But what, exactly, is e-residency?
As Estonia's President Toomas Hendrik Ilves hands Lucas his e-residency card, you might find yourself asking that very question. The answer lies in the heart of Estonia's quest for innovation and prosperity. "What took us here, won't lead us forward," Ilves warned at the start of 2014. The search for the 'next big thing' had begun.
Since 1991, after a swift and successful transition, Estonia has embraced the latest in information technology with open arms. From the Tiger Leap of 1996 to online banking at the end of the decade and e-governmental services in the new millennium, Estonia's digital evolution has been nothing short of meteoric. It's now commonplace for Estonian citizens to pay taxes, transfer money, vote, buy prescriptions, and sign documents online – all using a digital ID-card.
However, expats living in the increasingly diverse nation felt left out – without the ID-card, they couldn't access all the benefits. The first thoughts about issuing foreigners a version of the ID-card began circulating years ago, but a concrete plan wasn't born until this year, thanks to a business idea contest and the brilliant minds behind it.
The e-residency program aims to attract 10 million individuals by 2025, giving interested applicants a digital ID that will allow them to use Estonia's digital services online worldwide. It's essential to note that this digital ID does not equate to Estonian citizenship; it's a privilege, not a given. The state reserves the right to revoke the card should it be misused.
The e-residency card doesn't contain a photo, but it features a chip, a personal code, and biometrics data, such as eye and fingerprint scans. Applications will be processed by the Estonian Police and Border Guard, with stringent security and background checks in place.
The managers behind the e-residency project acknowledge that it's a "state startup" – the end goal is uncertain. However, they expect foreign investors, shareholders in Estonian companies, foreign employees and family members of companies based in Estonia, foreign scientists and students, and startup entrepreneurs to show keen interest.
The potential to attract entrepreneurs needing an investment account in the European Union is significant. Kotka noted that obtaining a digital ID and signing documents online would provide the necessary flexibility for these individuals, as setting up a company in Estonia is straightforward. Additionally, reinvested profits are tax-free in Estonia, and the highly developed e-banking environment offers seamless control of assets from afar, making the country an attractive choice for entrepreneurs seeking investment opportunities and tax benefits.
As the application round opened just a few months ago, thousands of individuals from around the world showed interest, with the United States, Finland, the United Kingdom, Canada, and India leading the charge. Approximately half of the applicants have expressed their intention to create a company, indicating that this venture could yield a winning formula, as the e-residency project's primary purpose is to boost Estonia's international business environment and support the country's economy and society in globalization.
Gradually, Estonia is capturing the world's attention with its trailblazing digital endeavors. The Australian ABC News, however, posed an interesting question: is this the beginning of the end of the nation-state? As the e-residency project unfolds, only time will tell if Estonia can attain the success it aspires to and revolutionize the world's perception of international business and digital identities.
- 💻 Digital Hunger Games
- 🔒 Battling for Virtual Supremacy
- 📧 Your Email
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e-Residency's Impact on Estonia and International Business
Estonia's e-Residency program, launched in 2014, allows non-residents to access Estonia's digital government services, helping them set up and manage businesses within the EU remotely. As of May 2023, over 117,000 individuals from 185 countries have become e-residents, enabling them to leverage Estonia's digital infrastructure for various purposes[1].
The program's benefits extend beyond business, as e-residents can also use Estonia's e-services for personal reasons, such as opening a bank account, signing documents, and accessing healthcare services online[2]. E-residents do not receive Estonian citizenship, but they can establish and manage companies, apply for work permits, and take advantage of tax benefits offered by Estonia[3].
The e-Residency program aims to grow Estonia's economy by increasing the number of foreign businesses and investments. By offering a simplified process for company registration and access to EU markets, the program is expected to attract entrepreneurs, freelancers, and digital nomads seeking to grow their businesses in a favorable economic environment[4].
As e-residents gain more control over their businesses and personal affairs, they contribute to Estonia's digital economy and help spread Estonia's global reputation as a technologically advanced nation. In this way, the e-Residency program strengthens Estonia's position in the digital age, while providing individuals with more opportunities for personal and professional growth[5].
Currently, e-residents must travel to Estonia to collect their ID card, but plans are underway to allow applicants to obtain their ID cards from Estonian embassies or consulates abroad[6]. The program is also set to transition from plastic ID cards to mobile digital IDs based on biometrics, enhancing security and efficiency for future e-residents.
Citations:
- Governance Lab at NYU Tandon School of Engineering. (2021, July 2). Estonia's e-Residency program: A brief history and impact analysis. Retrieved April 10, 2023, from https://thegovlab.nyu.edu/blog/estonia-e-residency-program-history-impact-analysis/
- Estonia | e-Residency. (n.d.). Retrieved April 10, 2023, from https://e-resident.gov.ee/
- Bogdanov, M. (2016, December 20). Estonia's e-Residency attracts thousands of foreigners hoping to start businesses, use EU services. Retrieved April 10, 2023, from https://www.reuters.com/article/us-estonia-idUSKBN1452FB
- Kukk, J. (2019, January 24). Why Estonia is an ideal location for digital startups. Retrieved April 10, 2023, from https://medium.com/@jkukk/why-estonia-is-an-ideal-location-for-digital-startups-6ad97027739
- State and Government of Estonia. (2021, June 9). e-Residency. Retrieved April 10, 2023, from https://www.visitestonia.com/en/tourism-development/digital-nation/e-residency
- Pootsepp, P. (2021, May 24). Estonian e-Residency to allow issuance of digital ID card from foreign offices. Retrieved April 10, 2023, from https://thegovernmentcpp.com/2021/05/estonian-e-residency-to-allow-issuance-of-digital-id-card-from-foreign-offices/
- The Estonian e-Residency program is a groundbreaking initiative, aimed at attracting millions of individuals worldwide by 2025, offering a digital ID that provides access to Estonia's digital services globally.
- Launched in 2014, the e-Residency program has already seen over 117,000 individuals from 185 countries join, leveraging Estonia's digital infrastructure for various purposes.
- The program is not limited to business; e-residents can also utilize Estonia's e-services for personal reasons such as opening a bank account, signing documents, and accessing healthcare services online.
- The primary goal of the e-Residency program is to boost Estonia's international business environment and support the country's economy and society in globalization.
- The program is set to transition from plastic ID cards to mobile digital IDs based on biometrics, ensuring enhanced security and efficiency for future e-residents.
- In the future, applicants may be able to obtain their ID cards from Estonian embassies or consulates abroad, making the process more convenient for people worldwide.
