Estonia

Access to single market

One of the greatest benefits of Estonia being a member of the European Union is access to the single market. As it contains over 500 million consumers, access to it offers invaluable opportunities for trade and investments. This lets companies benefit from economies of scale and also allows small- and medium-sized businesses to successfully enter the markets of the Member States. Other valuable features of the single market are the high quality infrastructure and an educated workforce. The free movement rules also mean that employers can easily recruit from a very large pool of workers.

A significant advantage of the single market for all businesses is the creation of a level playing field – the same standards and legislation apply to everyone. The single market rules replace the often complex different sets of national legislation with a single framework, which significantly reduces the bureaucratic hurdles and costs companies would face otherwise. The unification and harmonisation of laws also means that companies can establish themselves in other Member States under the same conditions or operate cross-border from their home base.

Customs duties and tariffs

As the EU is also a customs union, one of the most important benefits of the single market is that there are no customs duties or tariffs at EU internal borders and there is a common policy towards third countries. This reduces both costs and time spent on dealing with bureaucracy for businesses wishing to operate in the EU. One of the two principal treaties of the EU, the Treaty on the Functioning of the European Union states that once a good is imported into the EU from a third country and the appropriate customs duties have been paid, it is in free circulation on the internal market and no more duties may be imposed. The principle of mutual recognition means that a product sold legally in one EU Member State should also be allowed on other markets. In addition, internal taxation also has to be neutral to domestic and imported products.

VAT in EU

VAT applies to almost all products and services bought and sold for use or consumption in the European Community, therefore goods sold for export or services sold to customers abroad are normally not subject to VAT. Internally the EU has set certain required levels for minimum regular and reduced rates, however Member States still have the right to apply their own rates accordingly.

How e-Residency benefits entrepreneurs

Estonia is the first country in the world to offer entrepreneurs e-Residency. Becoming an e-resident provides you with a physical smart card (digital-ID), which allows you to use Estonian public and private services online. It also provides you with the ability to use digital signatures to digitally sign documents and e-mails and provides a secure method for encrypting files using the smart card, similar to the way that Estonians currently use the Estonian ID card. Public services include the use of the commercial register for creating and administering Estonian companies online. You can apply to e-Residency at e-resident.gov.ee.

To hear more about the latest statistics listen to the live broadcast recorded on the e-Residency 2nd anniversary celebration in Tallinn.

Why is Estonian e-Residency good for an entrepreneur?

  • Establish Estonian companies online in a day via Company Registration Portal
  • Administer the company online from anywhere in the world
  • Open a bank account, e-banking (sole discretion of the banks)
  • View your tax accounts and submit online tax returns via the e-Tax Board
  • Access all your Estonian bank accounts with a single smart card
  • Use the digital signature on any official document in Estonia
  • Use the smart card to encrypt emails and files for free
  • Use Estonian public services via the state portal eesti.ee

What are the benefits for developers?

  • Consistently maintained digital ID infrastructure
  • Public APIs for secure authentication and digital signing
  • Government verified users
  • Complying with KYC requirements
  • Access to global markets, avoid country specific solutions
  • Co-branding with the e-Residency program
  • Access to e-Residency community

When are you not eligible for Estonian e-Residency?

  • You do not have a valid document from your country of citizenship
  • You do not pass the security check carried out by the Police, Security Services and the Tax and Customs Board
  • You do not have a connection with Estonia or a justified interest to use Estonian e-services

e-Estonia

e-Estonia is a success story that grew out of a partnership between a forward-thinking government, a pro-active ICT sector and a switched-on, tech-savvy population.

Interesting facts about Estonia:

  • Wireless networks cover the entire country. You can enjoy wifi in public transport or when camping in the forest.
  • 3G and 4G networks are available anywhere across the country. Tallinn will be one of the first cities in the world to get mobile 5G network in 2018.
  • Estonia is the first in the 2015 International Tax Competitiveness Index, thanks to 0% income tax that applies on all reinvested profits.
  • The electronic ID-system covers over 94% of population, making it unique in the world.
  • Estonia has set a world record for the fastest establishment of a new company – just 18 minutes!
  • Widely used online solutions such as Skype, Transferwise and ZeroTurnaround were born in Estonia.

Why is Estonia called e-Estonia?

According to Wikipedia, e-Estonia refers to a movement by the government of Estonia to facilitate citizen interactions with the state through the use of electronic solutions. E-services created under this initiative include i-Voting, e-Tax Board, e-Business, e-Banking, e-Ticket, e-School, University via internet, the e-Governance Academy, as well as the release of several mobile applications.

Estonia has been well known for being in the forefront when it comes to Internet- and technology-related advances and using them effectively for the benefit of both individuals and businesses. A great change came about with the introduction of the X-Road system, which supports all available e-services. E-services are available both in the public and private sector. Opening and operating a business and most of the daily activities related to it have been made quick and easy by the creation of online services such as the e-Tax Board/e-Customs for the Estonian Tax and Customs and the e-Commercial Register.

Both business and private banking can be done online and those who hold an Estonian ID card are even able to sign contracts with the online authentication system. Individuals can use e-services for a variety of functions including e-health services and voting at Parliamentary elections; entrepreneurs have an array of services ranging from licensing and registration to culture and leisure projects available to them online.

In addition, Estonia boasts being listed as seventh in the world in cyber security, which further ensures that the e-solutions offered in Estonia are efficient and safe.