IfG.CC - The Potsdam eGovernment Competence Center

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 Estonian business environment, including the freedom to run a global, EU-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 50,000 people from 157 countries around the world. In India, there are over 2,321 e-residents who have created 307 companies. In the last one year alone, over 1062 individuals enrolled for the program in India and created around 205 new Estonian companies.

Among the notable Indian e-Residents are Mr. Mukesh Ambani, Chairman & Managing Director of Reliance Industries and Union Minister of Information Technology – Mr. Ravi Shankar Prasad. Reliance Industries has set-up a research centre for Jio in Estonia. The research centre aims at understanding digital society of Estonia and the benefit it can offer to India and Indians.

But of course, the majority of our e-residents in India are digital entrepreneurs, freelancers and IT specialists. For instance, Mr. Deepak Solanki is developing LiFi technology — an innovative alternative to WiFi — from Delhi through his company, Velmenni, registered in Estonia.

The initial idea behind e-Residency was to “make Estonia great”. As you know, Estonia regained its independence in 1991 from Soviet occupation and we quickly realised that we needed to find something to set ourselves apart from our neighbours. Norway had oil, Finland mobile phones, Sweden design. So, we embarked on massive technological innovation. It was also very convenient for us because we had to build an entire and efficient administration and being digital helped us to mitigate the costs while providing public services, in that case e-services, to our population. The process took time. It took great courage to invest in IT solutions and take the information technology route. Now, we can say we have designed one of the most advanced digital societies in the world, a system offering efficient digital services to our population.

So, when we had to think about ways to “make Estonia great”. It quickly became obvious that this digital society that we have built throughout the years was one of our main assets. We envisioned that more people could benefit for this, even without coming to Estonia or being Estonian. This is how we got this idea of e-Residency, which came from a unique and simple question: “Why should a country only offers its services to its population and not also to other people around the world who could benefit from these e-services?”. It is not a technological innovation, we only offer access to an infrastructure that already exists for Estonians. It is an innovation in the mindset. With e-Residency, we serve people who are neither our citizens nor our residents. But opening our digital borders helps us to generate Estonia’s revenues for the future that will benefit all Estonian citizens, supports Estonian companies in connecting internationally and, by contributing to put the country on the map, it enhances our soft power and national security.

For e-residents, Estonia offers increasingly convenient ways to successfully pursue activities independently of their location. Indeed, digital entrepreneurs selling digital services and offering cross-border IT and consultation services, location-independent entrepreneurs who could work from any location in the world and digital nomads – professionals who live and work in more than one country per year – are the people who benefit the most from e-Residency. E-Residency gives them a way to establish trusted company in Europe and remotely manage it with low overheads.

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 global EU company fully online while being in India and gain access to the European market of 500 million people.

e-Residency enables an individual to become an e-Resident and create an Estonian company. The newly created company is treated at par with any other Estonian company and therefore has access to all the facilities which an Estonian company would have including fund raising.

For example, Deepak Solanki had difficulty raising finance until he re-established his company in the European Union through e-Residency. His company raised funds and is now being run remotely through e-Residency with investors from the UK and Zimbabwe, all of whom are also now e-residents.

Companies established through e-Residency can be run completely online from anywhere in the world. As a matter of fact in Estonia, 99% of all the services are done online.

We have several partnerships with payment institutions such as Holvi, InstaRem or Payoneer in order to widen the choice of financial services available to e-residents. e-Residents can also use one of Estonia’s best success stories – Transferwise Borderless for convenient cross border fund transfer.

I would say it’s the combination of several factors. First of all, the development of our digital administration and society allowed every Estonian to benefit from a hassle-free and non bureaucratic administration, which partially explains that Estonia has now the highest number of startups per capita in Europe. Estonia put the right public policies in place right after regaining its independence, making sure the country would be pro-business and initiative. Our government is always open to test innovation ideas. Estonia was the first country to authorize i-voting, to legalize ride-sharing apps and of course to launch e-Residency.

Estonia has always had excellent engineers, even during Soviet occupation, and an entrepreneurial mindset. That mindset let many Estonians to create amazing start-ups in the recent years, which inspired others and contributed to make our country one of the best startup hubs. Skype has been founded by Estonians, as well as Transferwise, Playtech and Taxify. We are all very proud of these unicorns. So, cooperation and mix between an innovative government, a digital society, pro-business public policies and a dynamic private sector is the key in my opinion.

By definition, when you launch any initiative and in our case any governmental initiative, you know it might bring both risks and opportunities. When Estonia launched the X-Road and the digital ID card in 2001, or the i-voting system in 2005, the zero risk didn’t exist either, as it never does. Building a digital society involves risks but paper-based administration doesn’t reduce these risks, it’s even the opposite. In the case of e-Residency, we assessed that it didn’t bring any new risk to the country as there was no technological innovation, we only give access to an infrastructure that already exists.

We derive our legitimacy from the fact our programme involves several stakeholders: background checks of e-residents are done by the Police and Border Guard Administration, which has sovereign power of decision, companies are registered under the Company Registration Portal with the same obligations as any other company, including submitting an annual report, the country exchanges tax-related information with more than one hundred jurisdictions in the world on the basis of the relevant OECD convention, which also means such information exchange is also available to those with whom we have no valid tax treaty. The great thing for the growth of our programme is that the fact we take security very seriously has no negative influence on the number of submitted e-Residency applications, it’s even the opposite.

Our digital nation depends on the trust of all its people — citizens, residents and e-residents. You cannot expect trust if the State is not transparent and accountable. If there is no citizen control of the use of personal data, citizens would be legitimately worried about their privacy. In Estonia, to ensure transparency and accountability, citizens are allowed to monitor their own privacy. They can trace anyone who has tried to access their data by logging on to the state portal, eesti.ee. Protecting the integrity of our digital identity is always a top priority. But being pioneers in these fields also means we will sometimes be among the first to encounter new challenges. Ten years ago, Estonia was the first in the world to experience a nationwide cyber-attack, for example, although no data was compromised. The attack served as a wake-up call for how the country’s digital infrastructure could be secured through radical new technology. Of course, no system can be fully secured but we still believe paper-based administrations are less secured than digital ones.

Increased cybercrime and politically motivated attacks on electronic services mean cyber security is more important than ever for both the private and the public sector. Estonia’s preparedness to handle cyber crises has significantly increased over the past decade. The country has created intrusion detection and protection systems, practised cooperation with both public and private institutions, significantly contributed to the awareness of users, and is participating in intensive international cooperation. After its experience with the 2007 cyber attacks, Estonia has implemented blockchain technology to ensure data and systems integrity and combat insider risk, and became one of the most recognized and valued cyber security experts internationally. Since then Estonia became the home of the NATO Cooperative Cyber Defence Centre of Excellence (NATO CCD COE) and European IT agency. CCD COE is organizing the world’s largest and most complex international technical live-fire cyber.

E-Residency mostly benefits to digital entrepreneurs, freelancers and digital nomads, so we focus on these profiles. This is why we see a lot of interest coming from India, of course, but also Ukraine, Turkey and several hubs for digital nomads such as Bali, Chiang Mai, Bangkok, Berlin, Lisbon…

There are some similarities between Estonia and India. Like Estonia, India has always been a very entrepreneurial country. India has the world’s largest freelance workforce with the highest percentage working in software development & technology, while Estonia is a global leader in ICT technologies, especially in e-Government. They operate in IT hubs such as Bangalore and Hyderabad as well from Tier II and Tier III cities. Goa is also increasingly becoming a hub for both Indian and international digital nomads. We look forward to build more connections between them and Estonian companies through e-Residency and bridge them to European market, while providing them with tools that will help their businesses to prosper.

We are looking forward to enrolling digital entrepreneurs and freelancers and they operate in sectors such as software development, technology, web developers, consultancy, for instance.

---

Autor(en)/Author(s): Arnaud Castaignet

Quelle/Source: Technuter, 18.02.2019

Bitte besuchen Sie/Please visit: