The thesis for e-residency is simple; to bring capital and knowledge to the nation and to be a beacon for international business.
In December 2015 I applied for Estonian e-residency on a whim. The small Baltic nation Estonia nestled alongside Russia and Latvia has been the trailblazer for e-government innovation particularly since its independence since the collapse of the Soviet Union.
The Estonians invited Skype and conduct most, if not all government transactions online, including voting. Estonians can even walk to their pharmacy to pick up their chill pills, with no paperwork required.
Why is Estonia doing e-residency?
The Estonian Government has a long history of digital government services following its split from the Soviet Union in 1991. In its Digital Agenda for Estonia 2020, the Government laid out its intentions for e-residency:
“Estonia will start offering its secure and convenient services to the citizens of other countries. Virtual residence or e-Residence will be launched, meaning that Estonia will issue non-residents with electronic identity in the form of digital ID cards. The aspiration for Estonia is to become as re-known [sic] for its e-services as Switzerland is in the field of banking.”
The thesis for e-residency is simple; to bring capital and knowledge to the nation and a beacon for international business.
What it does
I have used my e-Residency card to verify the authenticity of contracts signed digitally via Funderbeam, an Estonian company in the startup scene.
Who are the e-residents?
An information dashboard shows the steady increase in e-residents since the program’s inception. As of January 2017, Finns were the majority applicants approved, followed by Russians, Americans and the Brits, with the Ukrainians rounding out the top five or top 40%. The majority are males 31 - 40 years old.
Reasons for becoming an Estonian e-resident?
I intend to establish an internet retailing business based in the Baltic region. It seems so many other digital entrepreneurs are heeding the call to build businesses in Estonia.
You receive a government-issued, physical identification card. While it does not bear the owner’s picture, the identity of the holder is embedded in the chip.
New email address
Your ID Card is linked to your Estonian email address @eesti.ee.
A community of entrepreneurs
Much benefit is touted among innovation ecosystems, and by being part of an increasingly international e-residency community you can build your own networks. This a unique community of entrepreneurs that other countries aspire to develop similar e-residency or e-citizenship schemes. The location-independent nature of Estonian e-residence scheme is growing; the prospect of Brexit has British business scrambling to maintain the ability to trade in Euros.
You’re joining an esteemed group of high profile politicians and businessmen
Shinzo Abe, Angela Merkel, and apparently even Donald Trump are e-residents. While this is not a reason alone to apply for e-residency, it speaks to Estonia’s confidence in the e-residency project and the political capital gained by promoting the initiative to world leaders and venture capitalists alike. The Estonian brand is leveraged off ideas such as e-residency and Estonia being the home of all things digital.
It’s all about the blockchain
Blockchain, can be thought of as a ‘block’ of transactions that form chronological ‘chain’. The importance of blockchain is such that it eliminates settlement risk in commercial transactions. The blockchain allows verification of a particular series of transactions. It can eliminate settlement risk because, say in commercial transactions, transfer of title is automatically linked with the payment. It means a transaction and settlement occurs simultaneously. A date and time stamp is given for the series of transactions that take place.
The NASDAQ stock exchange hailed a success a trial of blockchain technology to run shareholder e-voting on the Nasdaq Tallinn Stock Exchange. Nasdaq developed voting accounts based on information from Estonia’s e-Residency program. If you weren’t already able to be a shareholder on the Tallinn exchange, you’ll be better placed to access it directly with your e-residency card, after you register on the Estonian Central Register of Securities.
How to apply
Fill in an application form. You will need to fill in your personal details and provide a scanned copy of your government identification (such as your passport). You will also need to explain your reasons for applying for e-residency. When I applied I explained that I would like to tap into e-retailing opportunities in the Baltic region via incorporation in Estonia. I also wanted to invest in Estonian shares and managed funds.
Pay €100 and wait. What concerned me the most when applying was not getting approved. After all, just because you hand over €100 does not guarantee approval! But nearly all the e-residency applications filed to January 2017 were approved as you can see from the information dashboard.
After a few weeks I received a message from the Estonian Embassy in Canberra, Australia, and arranged a date to pick up the ID card and the USB Card Reader. The Embassy in Canberra is the only location in Oceania where you can collect your e-residency card in person. To collect your document you need to bring the passport you applied for e-residency to the appointment and see the Consul in person, as certified fingerprints will be taken.
The e-residency program is touted as the first of its kind, and has other nations like Lithuania also looking to implement a similar scheme. The e-residency scheme is being recognised by entrepreneurs, and digital nomads who now look to the savvy Baltic nation that could.