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Podcast 🎧 & blog: Impact, evolution, and growth in 10 years of Estonia’s e-Residency

27.11.2024 | ega

Estonia’s e-Residency programme turns ten years old, and we join in the celebrations with a deep dive into what’s been, so far, a very exciting path. As one of the international golden children of Estonia’s digital and global economic policy, the e-Residency programme has changed, evolved, and grown. In the digital space, ten years are no short time. 

From government start-up, to world-known solution for digital entrepreneurs and location-independent workers. To explore the programme’s journey, we sat down with Katrin Vaga, Head of Global Communication for e-Residency. Speaking milestones, tangible benefits of the initiative, and navigating as much global trends and cultural shifts. 

 

A government start-up kicks off, then becomes much more 

It wasn’t a silent launch, back then. Estonia started the e-Residency program in 2014, and many people around the world were listening. The programme offers non-residents a digital identity that allows them to start and manage a company remotely within the European Union, using Estonia’s advanced digital infrastructure. “The e-Residency programme started with a lot of curiosity. In the beginning, many early adopters weren’t even necessarily entrepreneurs,” Vaga reflects. “They were journalists, thought leaders, or individuals who were curious about the future of digital governance and wanted to be part of something new.” 

Initially, there was uncertainty about the programme’s long-term potential and how it would impact Estonia. However, over time, e-Residency has effectively grown into one of Estonia’s points of strength in ease of doing business globally. Since then, the customer journey for e-residents has been significantly streamlined, allowing them since 2016-17 to collect their digital ID at Estonian embassies worldwide. 

The programme has also hit several significant milestones. Today, Estonia has issued around 120,000 e-Residencies to individuals from 180 different countries, and over 30,000 companies have been created by e-residents. “Let me add to this, that 20% of all new companies registered in Estonia annually are created by e-residents,” Vaga highlights. There has to be more than ‘some good’, in doing business virtually from Estonia. 

 

Measuring the benefits on Estonia’s economy 

In fact, one of the most compelling aspects of e-Residency is its measurable impact on Estonia’s economy. The programme has generated substantial economic value for the country as well, both directly and indirectly. Vaga explains, “When we calculate the direct economic impact of the e-Residency programme, we take a conservative approach. We only consider companies that were founded by e-residents within 90 days of obtaining their residency.” 

By focusing on this narrow group, the e-Residency team can provide a more accurate representation of the programme’s direct economic contributions. The economic return on investment is estimated to be 10 times greater than the government’s financial input into the programme, with a portion of this return coming from taxes and state fees generated by e-resident companies. For example, it costs €265 to register a limited company in Estonia, and this fee contributes approximately 5% of the direct economic benefits. 

Beyond financial metrics, e-Residency has had a significant impact on Estonia’s global reputation as a hub for digital innovation. Katrin Vaga refers to the “soft power” aspect of the programme: “The value of the program in terms of Estonia’s global visibility is immense. We’ve calculated that we had over €380 million in earned media value, just from international outlets talking about our programme. This has helped reinforce Estonia’s position as a leader in digital governance.” 

Almost unsurprisingly, the e-Residency program has also contributed greatly to Estonia’s thriving startup ecosystem. Vaga mentioned that 38% of Estonian startup founders or co-founders have ties to the e-Residency programme, showing that e-residents are not only building businesses but also bringing valuable expertise and networks into the country. 

 

e-Residency is there to meet changes in global workforce 

With the rise of digital nomadism and the growing trend of remote work, trends in global workforce have changed dramatically over the past decade. But e-Residency has adapted to meet the needs of this shifting landscape – or, perhaps, it was already there to host and embrace these changes.  

“When the programme first started, digital nomadism was just becoming a trend. Today, we see e-Residency being used extensively by remote entrepreneurs, freelancers, and small businesses that want to operate in the EU without the physical need to be in Estonia,” Vaga explains. 

The programme has also seen a surge in interest from regions impacted by geopolitical shifts. Following the Brexit referendum, many UK-based entrepreneurs turned to Estonia’s e-Residency programme to maintain access to the EU market. Similarly, the COVID-19 pandemic accelerated the trend of remote work, with more individuals and businesses looking for solutions that allow them to operate flexibly across borders. 

 

Lessons learned, and a confident look ahead 

But scaling didn’t come without challenges. Ensuring the programme remains secure while continuing to expand globally is a top priority for the team. “Security has always been one of the biggest concerns, especially when you’re offering a digital identity to people outside your borders,” Katrin said. The team has implemented stringent security measures to protect the integrity of the programme and its users. 

Another key challenge has been explaining the concept of digital identity to regions where this is still a relatively new idea. “One of the things we’ve learned is how different countries understand digital. In Estonia, digital means making life easier, removing bureaucracy, and adding value. But in some countries, digital is still seen as something to be feared, especially when it comes to government data,” Katrin observes. 

The programme looks now toward its next decade, and the team is focused on continuing to innovate and expand its reach. “The future is bright for e-Residency. We are continuing to grow, adapt, and attract talent from all over the world. Estonia will always be a leader in digital innovation, and e-Residency is one of the key drivers of that,” she proudly says.  “We’re looking into emerging industries like AI and defence tech, which have great potential for our e-residents. We want to be at the forefront of technological change, and e-Residency gives us the platform to do that.” 

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