Here’s how Estonians are working together to help more people benefit from e-Residency

Estonia’s government and private sector are teaming up to improve access to banking & provide more opportunities to connect and grow companies.

An e-resident posted in the Estonian e-residents Facebook group last week to explain that he had just landed in Estonia and was having a good experience so far.

Philip Haggar runs a digital broadcasting company in the UK called Jukwa, but most of his clients are based across Europe so he established an EU company remotely as an e-resident to continue operating inside the Single Market after Brexit. The previous week, the e-Residency programme supported an event in London alongside the President of Estonia and the Ministry of Culture to welcome more broadcasters like Philip to Estonia.

After opening his business bank account, Philip and his colleagues are now ready to start operating within the EU through their Estonian company.

A few hours later, Philip posted again to explain that he had just bumped into Estonian Prime Minister Jüri Ratas who gave him a very warm welcome. ‘I guess that doesn’t happen that often’, he added.

It’s true that most e-residents aren’t personally welcomed by the Prime Minister, but the rest of his experience will be familiar to thousands of other e-residents who have successfully set up EU companies with EU banking through the programme.

If that wasn’t coincidence enough though, Estonian Prime Minister Jüri Ratas was actually on his way to a meeting for an update on issues affecting e-residents and how the programme can be improved to ensure our digital nation can welcome even more people like Philip. It was attended by the Ministry of Economic Affairs and Communications, the Financial Supervision Authority, the Central Bank of Estonia, and other representatives of the public sector — including myself from the e-Residency programme. These organisations have all been working hard to solve issues affecting e-residents in partnership with the private sector. The Prime Minister has a strong interest in ensuring more people around the world benefit from e-Residency, while Minister of Entrepreneurship and Information Technology Urve Palo has been vital to ensuring that happens.

We told Philip that we would give him an update on how the meeting went so we thought this would be a good opportunity to update everyone else in our digital nation too about how the government and private sector here are focused on improving e-Residency.

Banking

The biggest issue on the agenda was access to banking.

Banks across Europe are currently under pressure to reduce their risks, which should never be higher than their capability to assess and manage those risks. One way they are doing that is by carefully controlling the proportion of their accounts that are offered to non-residents by assessing factors such as their company’s ‘connection to Estonia’.

Unfortunately, this can also deny legitimate entrepreneurs the opportunity to start their companies and start developing their connection to Estonia. While Philip’s experience was smooth, others have not been able to open an Estonian business bank account and some have even had their accounts closed at certain banks.

This is not just an issue affecting e-residents, but investment in Estonia more widely.

The e-Residency programme’s recommended advice is to work with an established business services provider, as Philip did, which works closely with the banks. They can help ensure a company meets the criteria for opening and maintaining an Estonian bank account, but also inform you if it’s not possible before you book any travel to Estonia.

The Ministry of Economic Affairs and Communications is working with the Estonian Banking Association to understand the long term solutions that can lower the risks for banks when they open accounts for non-residents and ensure that more entrepreneurs can access Estonian banking services for legitimate business globally.

The Prime Minister agrees that non-residents of Estonia need access to business banking for their Estonian companies in order to increase investment in Estonia and enable the e-Residency programme to benefit even more people around the world.

The Estonian banking sector is one part of the solution, however.

An increasing number of entrepreneurs among all our populations — citizens, residents, and e-residents — are now using IBAN accounts and other banking services from fintech firms. These companies are being used in addition to a ‘traditional’ bank account, as a temporary measure until it’s worth travelling to Estonia to open a ‘traditional’ bank account, or sometimes instead of one entirely. Holvi is the first fintech company to specialise in business banking for e-residents, but more are planning to do so and this will provide more choice and lower prices for their banking services.

Meeting with Estonian Prime Minister Jüri Ratas last week.

As a result, we are all keen to understand the opportunities provided by enabling greater use of fintech accounts within Estonia’s business environment.

We know there are some issues, for example, on the ease of using fintech accounts to register share capital contributions so there is a solution being explored to ensure it works smoothly first time for everyone.

Edited June 2018: Since this article was first published, draft legislation has been proposed that will enable the use of accounts from fintech companies and from across the EEA.

As more fintech companies offer banking services, finding solutions like these to normalise the use of these accounts within our business environment would put Estonia in an even stronger position to welcome location-independent entrepreneurs without raising any additional risks for the Estonian banking sector.

Community

The most significant update on how the e-Residency programme is developing concerns how Estonia is supporting the growth of its e-resident community around the world.

E-Residency was initially launched with a focus entirely on providing access to e-services, but it’s become increasingly apparent that access to the whole e-community is also a strong motivator for becoming an e-resident.

The Estonian government now believes that e-residents should not just be able to start and run a company through the programme, but also grow that company by having more opportunities to connect with other e-residents and promote their companies.

This is why we are developing a new community platform, which will launch in beta mode this summer. Our long term plan is to ensure it also gives e-residents more opportunities to connect with companies physically based in Estonia too, which will mutually benefit both communities.

While working to reduce the hassle of running a company, we recognise that that the hardest part can actually just be finding those first customers and then finding the talent to help you scale up once there is enough work coming in. Entrepreneurs already depend on a variety of networks — online and offline — to find the work, talent and advice that they need. We now want e-Residency to be the best network for location-independent entrepreneurs too so there will be valuable business tools and features within the new platform, such as the ability to post and apply for work opportunities.

At the same time that this platform is being developed, we’ve been considering how a ‘community estcoin’ token could be used within that new community platform.

There were three variants of ‘estcoin’ originally proposed by the e-Residency programme, but the idea behind the community estcoin is that it could be used to facilitate and reward e-residents for activities that benefit others and ultimately help grow the community, such as providing work to other e-residents.

The Estonian government is open to ideas like this if they can improve the lives of e-residents, but it is still just an idea being examined right now. If this idea was chosen for implementation then these estcoins would have a utility only within our new community platform and would definitely not be a national cryptocurrency. The euro will always be our currency.

Although the community estcoin is only being examined, the new community platform is being built right now and we’re excited to see how e-residents, like Philip and many others, can get the most value from it.


As for Philip, he’s already planning another visit to Estonia. He’s been sending photos back to his family so now they all want to come back with him and enjoy a holiday in the Estonian wilderness. Even from there, Philip will still be able to run his company and access his banking entirely online.

Although we hope he‘ll take time to enjoy Estonia’s natural environment instead.

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