Starting and operating your business in Estonia as an e-Resident
Estonia is well known as the world leader in digital governance. In addition to that, Estonia was also the first in the world to introduce and implement the concept of e-Residency, and so far the only country in the world who has actually made it possible to use effectively in day-to-day business.
But still, what is e-Residency all about and what is the actual efficiency about it?
For a start, an e-Resident is a foreigner, to whom, as a benefit, Estonia has created a digital identity and issued a digital identity card – an e-Resident digi-ID, on the basis of the identification credentials of their own country of citizenship.
E-Resident’s digital identityis key to all the Estonian e-services that require authentication. Holders of e-Resident’s card can sign documents digitally and log into every portal and access every information system that accepts Estonian ID-card.
The above-mentioned means that e-Residents can run and operate their business in Estonia over the Internet and actively participate in managing it while living abroad. Thanks to e-Residency, also entrepreneurs from outside the European Union will have a chance today to run and operate their business in Estonia and organise management within the European Union. For example, entrepreneurs who are e-Residents can make transactions via online banking, electronically submit income tax returns, as well as digitally sign documents and contracts.
e-Residents can run and operate their business in Estonia over the Internet and actively participate in managing it while living abroad.
For instance, e-Residency would allow an Australian entrepreneur or American entrepreneur to establish an Estonian company that he runs from Australia or from US to serve clients based in England. He’d also be able to use his digital signature to sign contracts with customers throughout the European Union. All of it would be done online, remotely, and completely hassle-free.
By treating a lot of different contracts in our work, we have noticed how important is the fact that board members have an ID card. Of course, contracts can also be signed on paper, but practice shows that once preliminary work has been done and negotiations have been held, clients will assume that the agreement will be signed as soon as possible. Having e-Residency and an ID card, the parties can sign all the needed documents immediately via internet from anywhere in the world (though often digital signings are still done at meetings with all parties present). Digital documents are also easier to manage, and the signing process itself is quick and easy, no matter the length of the contract.
Over the last few years, the lawyers at Law Office Turnstone have gained much experience by helping entrepreneurs from outside and inside the European Unionestablish a company in Estonia. Depending on the company’s area of activity and size, a varying number of additional steps must be taken. The company will of course need a bank account to operate effectively. In case the shares are to be registered at a securities depository, also the shareholders will need a local bank account, and a securities account. Recently, getting a bank account opened has unfortunately been a major hurdle for companies from outside the EU, no doubt due to recent money laundering scandals (e.g. with Danske Bank).
Law Office Turnstone team would be gladly your partner and contact point in European Union who will help you in establishing a company and making good use of all the advantages of running your business as an e-Resident of Estonia.
Some interesting facts about e-Residents in Estonia:
- On December 1, 2014, Estonian President Toomas Hendrik Ilves handed the very first Estonian e-Resident digital identity to British journalist and estophile Edward Lucas;
- During the Estonian visit on September 25, 2018, Pope Franciscus became the first Head of State to be an Estonian e-Resident.
Law Office Turnstone