September 28, 2016
Ever visited Estonia? No? You’re not alone. The Eastern European country isn’t exactly a tourist hotspot and it’s only in recent years that its companies have begun to actively seek overseas specialists. However, Estonia is now offering the chance for foreigners to become an ‘e-resident’ for just €100.
Before you start packing your bags for your bargain holiday to Estonia you may want to remember that being an e-resident doesn’t actually provide you with the same rights as citizens. In fact, you won’t even need to step foot in the country to secure residency. The initiative aims to give foreigners the chance to base their businesses and finances in the Baltic state in order to tackle problems related to an ageing population and high emigration rates.
Estonia has a population of only 1.3m people and just 650,000 of those are of working age, a figure expected to decrease further over the coming years due to the aforementioned challenges. And, lets be honest, Estonia may have some difficulties luring permanent residents as, in the words of Taavi Kotka, Estonia’s Chief Information Officer and lead on the project, “Attracting immigrants is just not an option for us. People would rather choose Sweden or Norway. Physically, we’re not able to improve our population. So why not do it online?”
The government believes that these e-residents can contribute to the country’s economy in some of the same ways that actual citizens do, that is by using Estonian banks and establishing Estonian based businesses. This can also contribute to its other target of establishing the country as a digital pioneer.
Kotka has set a target of 10m registrations and while the current figure of 12,000 may seem modest, he would prefer to judge success on the number of businesses that have signed up. “We have added 1,000 businesses to the 60,000 that were already here, a 2% increase, which for us is important,” he added.
That’s not to say anyone can sign up. The process involves filling in a short form, scanning your passport and photo and adding a few additional lines on why you’d like to become an e-resident, but there are limitations on individuals and businesses with a track record of financial discrepancies. As Kaspar Korjus, managing director of the e-residency programme has said, “If you have been involved in ‘dirty business’ or money laundering you are likely to be rejected.”
As mentioned, being an e-resident isn’t the same as being a regular citizen and you won’t get the same rights. However, if you are considering making the move to one of Eastern Europe’s overlooked gems, or are considering registering a business here through the programme, then ensure you remain on the right side of the law at all times and that your tax status is compliant with domestic legislation. If you’re unsure about your taxes or right to work in Estonia or any other country then get in touch.
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