July 1, 2019
Estonia expanding e-residency scheme
The small European nation of Estonia is looking to expand its global influence through an “e-residency” program, allowing anyone worldwide to apply to become an e-resident of the country and set up a company there.
This would mean that people outside the EU could set up an Estonian company over the internet and gain easy access to the European market. E-residents of the Baltic country have access to all the digital government services of a state that prides itself on being a pioneer of e-government.
E-residency must be applied online. Confirmed applicants will then need to pick up an e-residency card at an embassy or pick-up location which currently is in Beijing or Singapore. But, according to Arnaud Castaignet, the head of international public relations of Estonia’s e-residency program, the country is planning to open an e-residency center in Bangkok soon.
“We are targeting Thailand because it is a major tourism destination and Bangkok is a rising startup hub with amazing co-working spaces,” Mr Castaignet said. “Also Thailand, especially Chiang Mai, is the capital for digital nomads, a group that would greatly benefit from our program.”
The scheme is popular in countries like Ukraine, Russia, and Turkey — places that are adjacent to the EU but not members of the common market.
Mr. Castaignet wants to promote the program in Asia, especially with digital countries looking to find a way to open up operations in Europe. He said many companies maintain registration in their home country and use the Estonian e-registry system to open operations in Europe.
“Many emerging countries lack access to financial services and access to venture capital,” Mr. Castaignet said. “By registering a company in Estonia, startups can gain access to EU funds and accelerator programs.”
Registering as e-resident costs €100 (3,492 baht), while registering a company in Estonia costs €190. So far, 58,000 people from 160 countries have registered as Estonian e-residents, registering 7,000 firms. Registration requires a background check, mainly to ensure the applicant is not involved in funding terror or other serious crimes.
Estonia taxes dividends on registered companies but does not tax any profits invested back into the company. In 2018, Estonia made €10 million from the scheme. This year it expects €15 million.
“The program is not really about earning money for Estonia, but about expanding our soft power, especially in the digital world,” Mr. Castaignet said. “We are only a country of 1.4 million people, and this is a way to make an impact far above our size.”