Estonian e-Residency program – how it works?
Entrepreneurs thinking of setting up or expanding their business on preferential terms should consider the Estonian market. Why? Thanks to the e-Residency program, which has been operating in the country for almost eight years, running a business is extremely easy.
How does the e-Residency program work?
The e-Residency program offered by the Republic of Estonia provides simple and secure access to digital services, enabling so-called ‘hand-offs’ of various types of matters (relevant to entrepreneurs) via the Internet. It is thus a convenient way to do business regardless of the physical location of the company. The e-Residency can be described as a ‘digital ID card’ issued by the Estonian authorities to non-citizens of this Baltic country, giving access to a range of Estonian e-Services.
How does the qualification process for the e-Residency programme work?
The registration procedure takes place almost entirely remotely, and the decision to grant the e-Residency card itself, if the formalities are properly completed, is taken within a month. One of the conditions of eligibility for the program is that the company must be established in the European Union; this means that the program is open to entities that have registered their business in the community. What steps should an entity interested in obtaining an e-Residency take?
- An application should be submitted online via the application site of Estonian Police and Border Guard.
- The next step is to visit one of the Estonian diplomatic missions or the point of the Estonian Police and Border Guard to collect the card confirming the acquisition of e-residency.
After receiving the E-residency card, the entity can perform formal operations, related to the day-to-day management of the company. It is therefore an extremely simplified process compared to other business establishment models.
Incorrect assumptions about the e-Residency program
It is worth remembering that e-Residency and residency are two very different concepts. One refers to where a person is obliged to pay taxes and the other is the name of a government programme and a technological solution. Therefore, before proceeding with the qualification process, it is important to consider that e-Residence:
- is not a citizenship, a tourist visa, nor does it guarantee entities permanent physical residence in Estonia,
- nor does it affect international obligations such as taxation. Entities using the e-Residency programme are obliged to pay taxes in the country where they physically operate,
- Estonia is a country with one of the most trusted business environments in the world, so the e-Residency programme should not be compared to an ‘offshore system’; nor is it designed to exploit so-called ‘loopholes’,
- activities qualified and carried out under the e-Residency programme are not, by definition, a ‘virtual company’.
Summary
Doing business in Estonia – thanks to the e-Residency programme – is much simpler vis-à-vis other countries and fully secure due to the easy and transparent qualification process. Our law firm KWKR Konieczny Wierzbicki and Partners is also a member of this programme, providing legal services in the field of relocation of business activities to Estonia. We encourage you to take advantage of our support.