E-residents of Estonia can Start an EU Company Irrespective of their Position on Globe

Entrepreneurship or stating a business and making it successful is one of the most challenging yet rewarding tasks one can do in life. However, not every country has regulations that can support a budding business. Nonetheless, imagine running a European company online, remotely from your country and joining a global community from the comfort of your place of choice? That is exactly what the e-residency programme of Estonia aims at doing. In an interview with DataQuest, Mr. Arnaud Castaignet, Head of International Public Relations, e-Residency, Republic of Estonia talks about who can apply for e-residency of Estonia, benefits of the programme and some notable companies who are e-residents of Estonia.

Excerpts

1. What is the e-residency programme?

E-Residency is a status provided to people who are neither citizens nor residents of Estonia, but are granted an Estonian digital ID and access to Estonia's e-services. In practical terms, it connects you with Estonia and its trusted and transparent business environment and allows you to create and run a EU-based company online from anywhere in the world. The program was launched in December 2014 by the government of Estonia and it has so far attracted more than 54,000 people from 157 countries around the world.

2. Who can apply for this and what are the benefits?

Anyone from anywhere in the world can apply for e-Residency.

Benefits

They are mostly 4 key benefits from being an e-resident: You can start an EU company, be location-independent, grow business remotely and join a global community.

For e-residents, Estonia offers increasingly convenient ways to successfully pursue activities independently of their location. Indeed, digital entrepreneurs selling digital services and aiming to reach out to European customers, freelancers who operate in sectors such as software development, web development and consultancy and highly-mobile entrepreneurs working while travelling on a very regular basis are the profiles which benefit the most from e-Residency. Being able to run your business fully online is therefore particularly important and e-Residency gives them a way to establish a trusted company in Europe and remotely manage it with low overheads.

Benefits for Indians

India has the world’s largest freelance workforce. Europe is one of the key markets for them owing to its huge demand. By bringing the freelancers under the e-Residency umbrella, we aim to provide them with a platform whereby they can further flourish their businesses.

India is an entrepreneurial country. Companies, especially those in software development & technology can leverage from Estonia since we pioneer in ICT technologies, especially in e-governance. e-Residency can provide Indian entrepreneurs with the opportunity to open and run a company based in the European Union, manage it fully online while being in India and gain access to the European market of 500 million people. All of this is done with no paperwork and within Estonia’s trusted and transparent digital business environment.

3. As per media reports, the Estonian government froze the programme due to a 'security flaw'in 2017. Have the security concerns been addressed?

First of all, this information is inaccurate and we didn’t freeze the e-Residency programme.

In 2017, that potential security vulnerability has not only been a challenge for e-Residency in particular and Estonia in general, as other European governments had also to revoke their ID cards at that moment due to the same problem discovered in the chips made by the same company. The security vulnerability affected millions of clients of global companies that use the same chip, including major hardware manufacturers. Indeed, Estonia’s digital services are in much wider use and backed by the government, which is why the vulnerability affected a greater share of society, including e-residents. We dealt with this situation with full transparency because our digital nation depends on the trust of all its people — citizens, residents and e-residents. Protecting the integrity of our digital identity was the top priority. We were very grateful for the patience of e-residents’ community and some of them have provided us with very positive feedbacks. We have not noticed that the issue with ID card problem has had influence on the number of submitted e-Residency applications.

There were no known incidents of an Estonian digital ID card being misused, but all previous certificates containing the vulnerability were suspended. A new certificates update has been developed based on advanced elliptic-curve cryptography, which is more secure and faster than the SSL certificates previously used. All e-residents could update their digital ID card certificates from the Estonian ID card utility software on their computer.

Estonia is proud to be a digital leader and help spread the benefits of our digital nation to as many people around the world as possible through e-Residency. That also means we will sometimes be the first to encounter new challenges and must take responsibility for the solution. We will always do so with full transparency.

Lessons are always learnt after such events. In 2007, our country was the first in the world to experience a nationwide cyber attack, although no data was compromised. As a result, the attack also served as a wake-up call for how the country’s digital infrastructure could be further secured through radical new technology.

Similarly, the vulnerability and the update of the ID card certificates has forced the government and private companies – who provide around 5,000 e-services – to think about new and even more sophisticated security arrangements for their services, find even more convenient alternatives, and implement updates at a fast pace.

4. Some of the notable organisations and individuals who are onboard the e-residency programme

Organisations

Indian examples:

Deepak Solanki is developing LiFi technology — an innovative alternative to WiFi — from Delhi through his company, Velmenni, registered in Estonia. Nishant Gupta is another interesting e-resident from Bangalore. Together with his partner, they have created Renaura, a research and formulation company in the beauty, personal care and wellness domains, which develops and manufactures specialty products that solve targeted problems primarily for the salon professional market under the brand iluvia Professional. They became e-residents in order to target European markets.

Global examples:

Esen Bulut is a Turkish citizen and runs her company, Rimuut, from Istanbul. This company is very successful among freelancers communities as it provides them with invoicing and payment solutions to make freelance work more practical, convenient and secure. Several companies such as Change.org, D & R Store and GarantiPartners already trust Rimuut and independent professionals using these solutions.

Kirill Soloviev is a Russian e-resident living in Moscow. He has established his company called Nimi which helps startups around the world choose better names for their companies, products and services.

Ksenia Ashrafullina runs her Estonian company, Invisible City, while living in Portugal. it is an app to help people find more culture around them offline by supporting emerging performing artists who need to book venues and build their audiences.

Konstantin Klyagin is an e-resident from Ukraine, who registered his company Redwerk in Estonia. It is an offshore custom software development company, they even developed a software for the European Parliament.

A company founded by a Finnish e-resident, Miki Kuusi, employs now 700 delivery drivers in Estonia: Food delivery app Wolt, which has its Baltic HQ in Tallinn.

5. What are the qualifications and procedural requirements to enroll for this programme?

Anyone from anywhere in the world can apply. You need to visit our website e-resident.gov.ee and fill the application form. You will need a copy of your government-issued ID, a passport-style digital photo, a motivation statement and you should pay the State fee (100€). Estonian Police & Border Guard Board conducts background check and will notify you by email when process is complete. If granted e-Residency, you will be invited to collect e-Residency kit at the nearest Estonian embassy.