Estonia’s nation e-Residency program has reported a 2020 revenue of EUR 19.7 million, the highest in its six-year existence, with profits also topping previous records.
e-Residency CEO Lauri Haav said: “We welcome the government’s unwavering faith in the program, and I am confident that every euro invested in the program will bring manifold returns, which go way beyond the number indicating the rate of return, especially considering indirect revenue such as the cash flow from e-Residents going into local business services,” adding that the program boosted Estonia’s prestige in the international arena.
IT and foreign trade minister Andres Sutt (Reform) said: “The e-residency program is a long-range business venture, which has yielded a significant return on investment over the years.”
“Every euro that has been channeled into the program by national authorities has yielded manifold returns. The government continues to maintain strong confidence in this program, as evidenced by in the national budget strategy for the period 2022-2025,” Sutt went on.
Lauri Haav added that since the program cost EUR 4.85 million through 2020, the revenue level represented over four times the return on investment.
Haav said that a 20% return-on-investment in one year was good going for an average venture capital fund.
“Our goals are ambitious, aiming to robustly increase the number of Estonian e-residents and the resulting economic impact on the national budget,” Haav added.
Andres Sutt, a government minister, seemed to be reading from the same page as Haav, noting that the e-Residency program attracted entrepreneurs worldwide, thanks to a transparent business environment, which he said operated with minimal bureaucracy.
Digitally signing documents and logging into e-service portals are some of the features e-Residency confers, though at the same time becoming an e-Resident does not equate to citizenship of Estonia, nor physical residency or tax residency, neither does the e-Resident card issued constitute a travel document.
e-Residents to date have established over 17,000 companies in Estonia, while the over 400 new companies added to the business register in March was also a record figure.
Private limited liability companies registered in Estonia by e-Residents constitute 20% of the total.
Companies set up by individuals all over the world registered as e-Residents paid in close to EUR 17.5 million to Estonian state coffers in 2020.
Andres Sutt said that the program was here to stay, while improving the security features was priority going forward.
The program announced earlier this year that stricter background checks were to be sought from e-Residency applicants in future, than had been the case up to now, not least because the success of the program had attracted those who would use it for nefarious purposes.
Business brought in by e-Residency has so far contributed EUR 63 million in the six-and-a-half years of its existence.
Lauri Haav said that those firms, which had been founded by e-Residents, had on the whole demonstrated growth, and in most cases were expanding into international markets.
Brazil, Singapore, South Africa and Thailand are the latest additions to the list of countries where new e-Residents can pick up digital starter kits, while the arrival of the coronavirus pandemic has served to accelerate the trend for a growing number of e-Residents, Haav said.
Launched in December 2014 with the intention of providing foreign nationals with safe access to e-services offered within the Estonian e-governance ecosystem, over 81,000 e-Residents have signed up to the program so far.
The scheme was championed by the Estonian president at the time, Toomas Hendrik Ilves. Edward Lucas, former senior editor at weekly The Economist, was in fact the very first e-Resident, while notable people reported to have been attracted to the scheme include British motoring journalist Jeremy Clarkson.
The program has also been copied by Lithuania, which launched its own e-Residency program at the beginning of this year. (ERR/Business World Magazine)