e-⁠residency applications and company incorporation increased 7% in first half of 2024

Katrin Vaga • Sep 10, 2024 • 3 min read

Over 6,000 new e-⁠residents were welcomed into our community between January and June, with citizens of Spain, Germany and Ukraine leading the way

Managing Director of e-Residency, Liina Vahtras

Between January and June this year, 6,037 foreign nationals were issued an e-resident digital ID and e-residents established 2,450 new Estonian companies.

According to Liina Vahtras, Managing Director of e-Residency, the interest in establishing companies in Estonia remains high though the growth rate is showing signs of slowing. "The number of new e-Residency applications is 7 per cent higher than in the first six months of 2023. Similarly, 7 per cent more companies were created in the first six months of 2024 compared to the same period last year." About these figures, Vahtras noted:

"These results have exceeded our expectations in the face of the economic downturn.”

The approval rate for e-⁠Residency applications was 93 per cent as 6,482 applications were received. The most active participants in the programme were citizens of Spain, Ukraine, and Germany, who submitted 917, 448, and 378 e-⁠Residency applications respectively. The citizens of the same countries also established most of the new e-⁠resident-founded Estonian businesses.

Liina Vahtras said that the primary goal of the programme is to boost the Estonian economy as an innovative business environment for global entrepreneurs, and to provide a positive return on investment for the Estonian economy, educational system, and culture.

The direct economic impact of the e-⁠Residency programme for the state budget amounted to 31 million euros in the first half of 2024. In addition, e-⁠resident entrepreneurs contribute over 11 million euros to Estonia’s economy annually by using local business services.

Taavi Kotka, Chairman of the e-⁠Residency Board and co-founder of the programme, says that no other country has reached Estonia's level in offering digital entrepreneurship services, but the competitive advantage will only remain if e-⁠Residency boldly takes the next technological leap:

"We need to start applying new technological possibilities, such as fingerprint and facial image capture, as well as real-time identification of documents and individuals via mobile app. This would make e-Residency more convenient for the user and more secure, as well as beneficial for Estonia.”

According to Kotka, the goal is to eliminate the need for a physical digital-ID card for e-⁠residents as soon as possible. He says that the pilot projects are expected to reach e-⁠residents within the next couple of years. This echoes the guidance of the e-⁠Residency Board, which includes representatives from government agencies.

In 2023, the direct economic revenue from the e-⁠Residency programme to the state (labour and dividend taxes, as well as state fees) was 67.4 million euros. The total programme-related expenses, including contributions from government partners, amounted to 7 million euros in 2023, making programme’s ROI (Return on Investment) reach nearly 10 for Estonian Government last year.

To date, Estonian e-⁠resident status has been granted to 117,000 people from 185 nationalities, excluding repeat applications and invalidated identity cards. Since March 2022, citizens of Russia and Belarus cannot apply for e-⁠Residency.

E-⁠residents have founded or co-founded more than 31,800 Estonian companies, accounting for approximately one in five new companies each year. Furthermore, 38 percent of Estonian startups are connected to e-⁠residents.

Estonia launched the world’s first e-⁠Residency programme at the end of 2014 with the aim of providing foreign nationals secure access to its public e-services, while also promoting cross-border entrepreneurship and generating additional revenue for the national budget. As such, Estonia is the only country that offers a 100% digital entrepreneurship solution for foreign nationals, providing them with a state-of-the-art toolbox for setting up and running a location-independent international business.

Since the programme's launch, the direct economic impact on the Estonian state has amounted to 244 million euros. In addition, the programme will continue to boost Estonia's international image and spur the growth and investments of Estonian companies that offer services to e-⁠residents and their businesses. An e-⁠resident company is defined as one where the e-⁠resident's role in the company emerged during its establishment or within 90 days of its creation, and the foreign national's e-⁠residency status must have been granted before the company was formed.