e-Residency for Startups & Entrepreneurs: Am I to be an Estonian from Now on?

January 6, 2019

If you are reading this blog, I can easly assume that you are already experienced in startup scene, one way or another. The most basic explanation of a startup is usually "solution to a problem". We say that "being a startup is not about your revenue or size of your company". There are countless examples to bigger startups like Uber, Slack, Airbnb. In a way, we can call Estonia "a startup" with their e-Residency initiative.

In 2014, Estonia started accepting e-residency chance for startups all around the world. E-residents gained the chance to work within European Union by establishing a digital company in Estonia, without having a physical office or an individual in Estonia. If you apply and get accepted for the program, you receive a physical Estonian government-issued digital ID and start your program from anywhere in the world. But one important note: you DO NOT become an Estonian (therefore EU) citizen with e-residency, you only get the right to start a company.

Even if Estonia has less than 2 million population, they are using digital IDs since 2000.

e-Residency Opportunities

E-residency gives great new opportunities, as you now have a company within EU borders. You can gain access to the banking system or international payment service provider, sign your documents safely and digitally, have easy access to EU market, work within EU laws. Last but not least, you will have an EU company which removes some trust issues (especially when compared to developing countries).

To apply for e-Residency in Estonia, you just need your local government-issued ID, passport, photo, credit card and a letter of motivation for your application. Then you need to pay 100€ and wait for 6 to 8 weeks for background check. After that, you will be notified via e-mail. If you get accepted as an e-resident, you can get your ID from the nearest Estonian consulate.

Your digital ID is the way you can get into anything related to Estonia: from starting your company to paying your taxes later on. You can plug your Estonian ID cards directly into a computer through an e-reader that connects to the USB port. The ID card holder then simply enters their unique pin codes to either authenticate their identity or digitally sign. Even if Estonia has less than 2 million population, they are using digital IDs since 2000.


I started my company. What now?

Even if you don't need a physical office, you still need an adress within Estonia to start your company. And as most of the things in your way can be handled digitally in Estonia, that problem is easy to solve, too. There are services like LeapIn, which provides services you need for your digital company in Estonia. Starting at 60€ monthly, you can get a bank account in Estonia, accounting, taxing and compliance help.

After you handle all the "digital paperwork" for you company, you can start doing business asap. E-residents pay 20% income tax. You can also do this digitally with your ID.

For now, Estonia is the only country in the world that accepts e-residents, so there is no alternative unfortunately.

More Info about e-Residency in Estonia

Further reading: e-Residency whitepaper

Further reading: Why e-Residency is popular with Turkish entrepreneurs


Credit: Burak Büyükdemir @ Startup Istanbul 2018


Hackquarters Team
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