e-⁠residency is part of a long tradition of making friends for estonia globally

Ott Vatter • Mar 14, 2019 • 7 min read

I’ve today been appointed Managing Director to continue the development of the e-⁠Residency programme.

Estonia launched the world’s first e-⁠Residency programme as a ‘government startup’ four years ago with the ambitious goal of building a community of 10 million e-⁠residents by 2025.

Back then, I wasn’t sure if it was really possible to grow a country like a startup, but I was fascinated by the potential of this idea to benefit both Estonia and the world. Kaspar Korjus, the programme’s first Managing Director, asked me to help get the programme started so I eagerly joined — although just on a temporary basis.

Never would I have imagined that four years later I would still be here but I’ve loved watching our community grow. E-⁠residents are both benefiting from our country and contributing to our country in more ways than we could have predicted at the start.

It’s been a fascinating journey and today I’m very pleased to share the news that my ‘temporary’ work for the programme is being extended even longer. I’ve been appointed the new Managing Director of e-⁠Residency to lead the programme through its next stage of development known as e-⁠Residency 2.0.

Estonia’s tradition of friendship

In truth, Estonia has always been making friends beyond its borders. The foundations for our Foreign Ministry were established prior to the establishment of our Republic and it is the only part of our state that has functioned continuously since then. Even when Estonia was under occupation, Estonian diplomats abroad remained in their posts and continued to make friends for Estonia globally.

Estonia has a come a long way since then — with more than a little help from our friends — and I’d encourage e-residents to read the most recent Independence Day speech from President Kersti Kaljulaid to better understand Estonia’s perspective on its past, present and future.

Here at the e-⁠Residency programme, we are proud to continuously work with partners across the public and private sector to improve our offering to e-⁠residents because it is part of this long Estonian tradition of building international friendships. Estonia is no longer a friend in need, but we’ll continue to be a friend indeed. The difference now is that Estonia officially recognises its relationship with citizens of other countries living beyond our borders and we have the technology to provide more value to everyone as a result of those connections.

Measuring the success of e-⁠Residency

Before getting back to work, I quickly want to highlight how we’re focused on delivering that.

We’ve learnt a lot during the past four years from people across our digital nation — citizens, residents, and e-⁠residents — about how we can help them benefit even more from e-⁠Residency.

We’d still love to have 10 million e-⁠residents by 2025, but we’ve also realised that quantity of e-⁠residents is not as important as we once thought. Our priority is instead ensuring that e-⁠residents make as much use of the programme as possible so we can build a vibrant and very active community, which benefits both them and Estonians even more.

At present, the biggest benefit for e-⁠residents is their ability to establish and manage a paperless EU company, which they can then use to conduct business globally — often with much greater ease than their alternative options, such as registering a company in their home country.

So here at the e-⁠Residency programme, we begun last year measuring the success of e-⁠Residency based on how many new companies were being established by e-⁠residents. We set ourselves the target to double this number in one year with an extra 2,500 new companies. As it happens, this figure was reached by September and the total number of new companies by the end of the year was an additional 3,195.

Once again this year, we aim to increase the number of new companies established by e-⁠residents. However, we also think even this measurement isn’t enough.

We can see that some e-⁠residents are incredibly successful growing their companies, some need more support to reach their full potential, and some will inevitably change their plans and stop trading. So we want to measure quality of new companies, as well as quantity, so we can focus even better on supporting the community and involving more Estonians in that growth.

There are now more than 6,000 new companies established by e-⁠residents and, as they grow, they make a significant impact to the Estonian economy.

These companies contribute more to Estonia just in direct taxation than the cost of delivering the e-⁠Residency programme. However, by far the largest contribution to Estonia comes from these companies when they conduct business with other Estonian companies. Almost all of them invest in business services from Estonia and many of them seek out other ways in which Estonians can help grow their companies globally. There’s no obligation for them to do this (beyond a requirement to appoint a local contact person for the purposes of accountability) and there never will be, but e-⁠residents recognise the value of establishing deeper connections in Estonia and we are happy to help them do so.

So we will also continuously speak with all the people of Estonia about how e-Residency can benefit them and how they can get involved. We even roles available (for Estonian speakers) at the e-Residency programme listed here and more coming in future.

If we measure this economic impact to Estonia then we are also indirectly measuring how successfully e-⁠residents are growing their companies. It’s not a direct correlation, of course, because some e-⁠residents will succeed without too much Estonian support — and that is fine too — but it is a very good indicator. If an e-⁠resident’s company is not growing then there would be very little for us to measure in terms of economic impact. It’s quite tricky measuring the full economic impact, but that shouldn’t dissuade us from focusing on what is best for both e-⁠residents and Estonians.

So our goal for this year is to continue measuring the number of new companies started by e-⁠residents, but also combine that with a measurement of how these companies grow and contribute economically to Estonia. We’re aiming to help e-⁠residents establish 3250 new companies this year — so a slight increase on last year — but more importantly we are also aiming for a 50% growth in the economic contributions of all e-⁠resident companies.

The Estonian people are the shareholders of the e-⁠Residency programme so it’s right that we measure their investment against their returns. But this also means that the e-⁠Residency programme only succeeds when e-⁠residents build successful companies. We are not looking over the shoulder of each new e-⁠resident to see who will be the next person to sign up and get us closer towards that 10 million goal. Instead, we are more interested in standing alongside our existing e-⁠residents to help them reach their full potential. That’s better for e-⁠residents and better for Estonians.

In addition, we also have 49 recommendations for implementing e-Residency 2.0 from the white paper published at the end of last year. You can read more about that here. These recommendations have been carefully thought through in consultation with a wide range of stakeholders in order to ensure both e-⁠residents and Estonians can benefit more from the growth of the community. So these recommendations are both additional goals that we aim to reach over a longer time period, but they are also the way in which we intend to deliver our main goals.

Image result for e-residency 2.0 — The e-Residency 2.0 initiative was led by Estonian President Kersti Kaljulaid and involved stakeholders across the public and private sector.

E-⁠Residency is no longer just a government programme. It’s a status that is part of the new normal for how our state functions and engages citizens of other countries living beyond our borders. And it’s a community where people support each other and want to give more back to Estonia.

As President Kersti Kaljulaid explained in her Independence Day speech, Estonians have continuously been making friends beyond their borders throughout history as this has always been an essential part of the process for building a successful country. We now have so much to offer, including the fact that Estonian companies are today seen as credible around the world. That’s precisely because the story of Estonia has been so incredible.

So thank you to all our e-⁠residents who have contributed to our country so far. You are now part of the story of Estonia too and we hope you’ll continue to write that story with us.