Read Estonia’s e-Residency 2.0 white paper in English here.
How do you ‘scale up’ a nation? It’s a challenge that Estonia first embarked on in 2014 by becoming the first country to offer e-Residency.
By that point, Estonia had already evolved into a digital nation where citizens and residents could sign documents and access almost all government services (and a growing number of private services) entirely online using their Estonian digital identities, which were first issued in 2002.
Our digital nation wasn’t perfect. But it was considered normal or normaalne — one of our favourite words as Estonians. We believed that if something could be done online from anywhere in the world then it should be possible to do it online from anywhere in the world. And if that’s normal for us, then why not for anyone else in the world who wanted it too? After all, our digital nation could handle far more ‘users’ than our citizens and residents.
With that logic, the law was amended so that Estonian digital ID cards could be provided to people who are neither citizens nor residents of Estonia — and e-Residency was born.
E-Residency was a new idea, but also a continuation of Estonia’s long tradition of reaching out beyond its borders to make valuable connections around the world. In 1989 for example, Estonians literally reached out beyond their borders — along with Latvians and Lithuanians — to protest Soviet occupation by forming the longest unbroken human chain in world history. To this day, the Estonian Foreign Ministry is actually the only part of our state that has operated continuously for 100 years, even during the dark days of occupation when Estonians didn’t have control of their physical territory.
The reality too is that all countries seek to connect with people beyond their borders, but Estonia is the first to provide an official status for this relationship and recognise that our state serves them too. Digital identities merely enable us to manage that relationship effectively and make it more mutually beneficial.
The e-Residency programme was launched as a startup in ‘beta mode’ with the ambitious goal of adding 10 million e-residents to our digital nation by 2025. As e-residents began joining our digital nation, we were then able to continuously improve our understanding of which services they most wanted to access online from within our digital nation and how those services could then be improved for everyone — including citizens and residents.
Since then, approximately 50,000 people have applied for e-Residency from 165 countries and territories, and the primary reason has been the desire to establish an Estonian company — because an Estonian company is also a trusted EU company that can be run entirely online with minimal cost and hassle.
Things haven’t exactly been smooth for all e-residents who have since signed up though. For a start, the first ever e-Residency card didn’t even work so it had to be given out again. Back then, e-residents also had to visit Estonia four times in order to complete the process of applying for e-Residency, collecting their card, establishing their company and accessing business banking. (It’s since been reduced to 0). Most notably though, access to traditional business bank accounts has tightened considerably across Europe for non-residents and this has posed the most fundamental challenge to ensuring that more people around the world can benefit from e-Residency. And let’s not forget that Estonia had to respond swiftly to a potential security threat that resulted in digital ID card certificates being frozen. The threat was eliminated without any breaches, but not without causing quite a bit of hassle.
Despite this, Estonia’s e-resident population has continued to grow at ever faster rates and they’ve helped us find solutions to these challenges along the way. Most recently, Estonia’s Parliament has amended the Commercial Code so that Estonian limited companies have the freedom to choose their business banking not just from Estonian banks, but from any credit or payment institution in the European Economic Area:
E-residents have so far established approximately 6,000 new companies and, by doing so, they have not just benefited from our digital nation but also made a significant contribution towards its further development. They’ve conducted business with other Estonian companies, invested in Estonia, travelled to Estonia, and some have paid taxes to Estonia. Perhaps most interestingly, they’ve also raised greater awareness of Estonia globally — including our culture and our values.
E-residents are now an important community of Estonia that extends to every corner of the world. This is the new normaalne for how our country functions and other countries are already following in our steps.
And that’s only the start.
This year, the e-Residency programme launched an initiative with Estonian President Kersti Kaljulaid called e-Residency 2.0 to bring together a wide range of stakeholders across Estonia involved in the growth of e-Residency in order to review the progress and prepare for the next stage of development.
This is why e-Residency works — because it is a national initiative in which Estonia’s public and private sector work together to serve e-residents.
Following extensive consultations, we have together produced an e-Residency 2.0 White Paper with the aim of ensuring e-Residency will become even more beneficial for everyone in our digital nation — including our citizens in Estonia and around the world, all residents of Estonia and, of course, the e-residents themselves.
The e-Residency 2.0 White Paper contains 49 recommendations for how the programme can meet that goal and is being unveiled for the first time today by Estonian President Kersti Kaljulaid with the e-Residency programme in Kadriog Art Museum, supported by many of those who were directly involved in creating it, such as Minister for Entrepreneurship and Information Technology Rene Tammist and TransferWise CEO Taavet Hinrikus who is moderating the event. Prime Minister Jüri Ratas has also had a key role in driving this process forward and his Cabinet of Ministers has accepted all 49 recommendations.
The e-Residency programme has already had a proven beneficial effect on a modest scale for citizens, residents and e-residents, as well as Estonia itself. It has paid for itself by bringing more direct income to the Estonian state than has been invested by Estonian taxpayers. It’s helped people around the world access entrepreneurship and conduct business globally in ways that weren’t previously possible for them. In doing so, it has provided more business, jobs and investment for companies in Estonia.
The recommendations for improvement cover technology, business, security and — perhaps most surprisingly — culture. It will help create more mutually beneficial connections between everyone in our digital nation. One of the clearest re-occurring themes throughout this process is that e-Residency should be about much more than business. Many e-residents know little about Estonia when they first hear about e-Residency (and sometimes nothing at all), but have then developed a special connection in which they want to learn more about our culture and values. Some even learn Estonian! This is fortunate because, as Estonians have learnt throughout history, if more people can find our country on a map then we are more likely to remain on that map.
Our digital identities are tried and tested and so too now is the concept of e-Residency. Now is the time to scale up our ambition and scale up Estonia with it.
But this future is not guaranteed. First we have to create it and continue to offer real value, which in turn provides more prosperity, opportunities and security for everyone in our digital nation. This White Paper is just the first step towards achieving that, but once implemented, e-Residency will no longer be a startup. It will be… normaalne.
Download the e-Residency 2.0 whitepaper
Our planning, like the original document, is in Estonian. However, it has been translated into English for transparency so that both e-residents and others around the world can read it for themselves and provide their own feedback. We also hope it will provide inspiration for how other countries can develop their own e-Residency programmes based on their own unique online offerings to the world.
This White Paper was made possible by many people working together. I would like to thank all of the officials, entrepreneurs, state representatives and volunteers who devoted their time in the summer and autumn of 2018 to attending meetings, conducting interviews, performing analysis and writing.
In particular, I would like to thank Estonian President Kersti Kaljulaid for convening the White Paper roundtable and initiating the discussion.
I also thank the Police and Border Guard Board, the Ministry of the Interior and the ministry’s Centre for Information Technology and Development, the Ministry of Foreign Affairs and Estonian embassies and consulates around the world, the Ministry of Finance, the Ministry of Justice, the State Information Authority, the Tax and Customs Board, the Office of the President, the Government Office, the Ministry of Economic Affairs and Communications, the Estonian Banking Association, the Chamber of Service Economy, Enterprise Estonia, and other parties who have helped get e-Residency off the ground and contributed to the inception of the White Paper.
My gratitude also goes out to the curators whose job it was to frame and guide the content of the chapters: Taavi Kotka (Who Are Estonia’s Future E-residents), Taavet Hinrikus (Enterprise), Kai Härmand, Hannes Vallikivi (Legal Environment), Martin Ruubel (Technology), and Sten-Kristian Saluveer (Culture and Society).
Thank you to everyone who shared their knowledge, opinions and criticism in the course of the interviews: Alo Ivask, Andres Herkel, Andrus Alber, April Rinne, Dmitri Jegorov, Erki Kilu, Hannes Vallikivi, Henry Kattago, Indrek Kasela, Indrek Neivelt, Ivar Veskioja, Jevgeni Ossinovski, Jonatan Vseviov, Kai Härmand, Kaja Kallas, Kersti Eesmaa, Kilvar Kessler, Krista Aas, Kristi Hunt, Kristina Kallas, Lauri Lugna, Lavly Perling, Luukas Ilves, Madis Müller, Madis Reimand, Margus Arm, Marie Rosin, Mariin Ratnik, Märten Ross, Mats Kuuskemaa, Mehis Sihvart, Merle Saar-Johanson, Mihkel Solvak, Piret Ehin, Pirko Konsa, Raigo Haabu, Raivo Küüt, Rene Tammist, Siim Kiisler, Siim Sikkut, Simo Hämäläinen, Taavi Kotka, Toomas Tamsar, Valdur Laid, Viljar Arakas and Viljar Lubi.
I thank everyone who took part in the Ice Cellar roundtable, the risk, crisis communication and business model working groups and the discussions on the chapters: Aivar Paul, Aleksandr Belloussov, Allan Martinson, Allan Selirand, Andi Hektor, Andres Ojamaa, Anita Sokoleva, Ants Ansper, Ardo Hansson, Britta Tarvis, Dan Bogdanov, Egon Rand, Emilie Toomela, Ene Jürjer, Erkki-Ruben Vebber, Eva-Helen Kangro, Helen Tammemäe, Ingmar Väli, Ivar Veskioja, Ivo Lõhmus, Jaak Vilo, Jaan Lõõnik, Jüri Ratas, Jüri Seilenthal, Jüri Vlassov, Kadi Metsandi, Kaia-Liisa Kallas, Kaido Raiend, Kairit Kirsipuu, Kaspar Ojasalu, Katrin Sepp, Katrin Talihärm, Kersti Eesmaa, Kristi Veskus, Leanyka Libeon, Lemmi Oro, Liana Roosmaa, Marek Feldman, Margit Ratnik, Margus Mägi, Mari-Liis Tori, Maris Valdmets, Mariann Kirsipuu, Mark Erlich, Marko Russiver, Marten Kaevats, Martin Reissar, Martti Kalvik, Merje Klopets, Märten Ross, Olja Kivistik, Peep Küngas, Peeter Kuimet, Peeter Luikmel, Ragnar Everest, Reet Prii, Riho Oks, Risto Hansen, Rivo Reitmann, Ruth Annus, Siiri Suutre, Sten Tamkivi, Sven Mikser, Taavi Linnamäe, Tiit Hallas, Tiit Riisalo, Tõnis Elling, Toomas Kuuse, Üllar Jaaksoo, Veiko Hintsov and Viktor Kaljukivi.
And I also acknowledge fellow team members for implementing e-Residency 1.0 and developing the White Paper for e-Residency 2.0: Adam Rang, Aet Veski, Alex Wellman, Alexey Voronkov, Arnaud Castaignet, Astrid Lohk, David Griffith, Heidi Havam, Joel Burke, Julia Barrett, Katre Kasmel, Ott Vatter, Reelika Virunurm, Silver Siniavski, Varun Sharma and Victoria Saue.
Daniel Vaarik and Riina Raudne helped with interviews and making the White Paper come together — thank you!