Have you ever heard the word e-residency? But have no clue on what it means, the benefits it offers or perhaps the countries that offer it?
E-residency is a program launched in December 2014 by Estonia, a country in northern Europe with a population of 1.325million people shown from 2019 statistics.
Estonia is very passionate about digital trends. It comes as no surprise that they are the first country to launch an e-residency program.
E-residency is a digital identification card issued to non-Estonian citizen that qualifies them to make business transactions and other Estonian services.
To be an e-resident, you need to pay a little amount of money to process your documents. As an e-resident, you have access to digitally run businesses, settle taxation and access bank transactions.
There are a lot of critics who are not very comfortable with the concept of e-residency. They complain about the high risk associated with this process. The risk of fraud and other security-related issues tops the list; however, the benefits e-residency offers are also great.
E- residency is a great help to digital nomads; digital nomads are people that earn a living working remotely. They make use of innovative digital technologies to carry out their daily tasks and earn a living.
Benefits of e-residency
E-residency made huge monetary contributions with an estimated value of over €17 million to the revenue of Estonia through business transactions and other tax-related fees.
There are many benefits associated with e-residency, we will discuss a few major benefits of e-residency.
1.Start a company
Many people dream of starting their companies but they can’t because of certain factors including; high business tax rates and other costs a new business requires.
As an e-resident, you have the freedom to digitally start your company. All you need to do is, register your company online, then join the community of digital entrepreneurs.
2.Manage and grow your business remotely
Starting or registering a business online seems easy and achievable.
However, as an e-resident, you can grow and build your business virtually.
You can advertise your products, recruit your staff, sell your product or services, receive payments, and also pay your staff digitally.
The internet is global, this means that your business services are accessible to billions of people globally.
3.Belong to a digital community
The feeling of acceptance that comes with working together with people that understands you is priceless. Most people will be scared of handling their entire business online, I totally understand their point of view.
The risk of online theft and other banking issues is extremely high as the entire business transaction is carried out online.
However, as an e-resident, you can join a digital community, people that were once beginners but have advanced to an experienced level. You can also interact with them and learn from their mistakes.
Furthermore, you learn about newer digital technologies and innovations that can improve your working experience.
The internet is dynamic; newer information, upgrades, and improvements will be constantly introduced through your digital community.
4.Sign documents digitally
As a business owner, you will need to seal several business deals and transactions.
How do you legally seal your business transactions? You need an online signature that will enable you to sign documents online without your physical presence.
As an e-resident, a digital smart card is given to you, this card is useful for signing and verifying documents online.
How amazing is this, you don’t need to be scared of signature forgery or run around offices trying to get the authorized signature. You can handle very important business transactions from the comfort of your home.
5.Engage in digital banking
It is a known fact that the world is more digital than analog, however, there are certain times that analog methods are still used, especially in the banking sector.
The e-residency program is completely digital, all processes are handled online except the delivery of essential residency documents such as the smart card. As an e-resident, you have the permission to apply for a bank account in order to handle your business transactions smoothly.
From your present residential country, you can engage in e-banking services in a secure digital environment. You also have access to several international payment modalities like Braintree.
How to apply for e-residency in Estonia
1. You will need to scan and submit certain essential documents such as;
• Identification card
• Passport
• Motivating statement (the reason you want to be an e-resident)
• Master or Visa card to pay the state a fee of €120.
2. Visit the e-residency website and head to the application page, enter your personal details as required then scan and upload your documents.
3. Pay the residency fee, then select your preferred location to collect your residency kit (which contains a card reader and your digital identification card).
4. After submission, you will receive a confirmation email, pay close attention to your emails during the whole process.
5. Once your application is accepted, extra documents will be required.
6. If your application is approved and successful you will be informed by email.
7. You will be asked to pick up your residency kit from your chosen location.
8. The kit must be picked personally as they will need to collect your fingerprints.
Major beneficiaries of e- residency
The major beneficiaries of e- residency programs are;
• Digital nomads
• Entrepreneurs
• Freelancers
• Professional consultants in different fields
Benefits of opening a company in Estonia
• The amount of capital is low and it also requires little maintenance.
• In Estonia, businesses trade in euros. This is done to reduce fluctuations in currency.
• The process of taxation is very transparent, also if you reinvest your business profits you will not pay tax for it.
Countries that offer e-residency
1.Estonia: Estonia is the first country to launch the e-residency program. Most countries are copying their leads and venturing into this revenue-building opportunity. They have over 80,000 residents and more than 16,000 companies founded by these residents.
2.Lithuania: Lithuania launched their e-residency in 2021, January to be precise. It has similar features with Estonia including tax payments, access to banks, and the permission to start up a company.
3.Ukraine: Ukraine joined the e-residency movement in July 2021 with a high expectation of attracting diverse freelancers. The major features include; digital remote banking, professional assistance, and a flat tax rate.
Other countries expected to join the e-residency program includes; Georgia, Portugal, Singapore, Dubai, Brazil, Thailand, Japan, and South Africa.
Conclusion
Please note that e-residency is not a visa, it does not offer you automatic citizenship and it is not a means to stop paying taxes.
Despite the drawbacks associated with being an e- resident, I think the benefit of owning your company and belonging to a global digital community is worth a little bit of risk.
If you consider e-residency, ensure that you share your experience with us. We would love to know more about the benefits and drawbacks/risks of e-residency.
What are your thoughts about e-residency? Do you think it is something you might like to try out?
