In 2023, the concepts of statehood and nationality are evolving. While physical boundaries remain, the rise of digital residencies and citizenships is blurring the lines of traditional nationhood.
Estonia's e-Residency program, a pioneering initiative, already offers entrepreneurs and digital nomads a unique blend of flexibility, connectivity and a business-friendly environment — as every Xolopreneur reading this may already know.
But as with any groundbreaking idea, it’s only a matter of time before others take inspiration. Enter Liberland: a self-proclaimed micronation nestled between Croatia and Serbia, aiming to carve out its own niche in the world of digital residencies and citizenships.
Let's explore exactly how Liberland's ambitious digital residency and citizenship program stacks up against Estonia's established e-Residency.
What and where is Liberland, anyway?
The Free Republic of Liberland is situated in a "no-man’s land" between Croatia and Serbia. It occupies an area of less than three square kilometers, making it roughly four times the size of Monaco and just a tad larger than Vatican City (suddenly Estonia doesn’t seem so small).
The brainchild of Vít Jedlička, a self-described Czech libertarian, Liberland was conceived in 2015 when its flag was planted in what is proposed to be the capital city, Liberpolis. The land claimed was a remnant of an ongoing border dispute between Croatia and Serbia.
Jedlička’s stated vision for Liberland is ambitious: a nation where taxes are voluntary, and the principles of freedom and libertarianism reign supreme. The country's motto, "To live and let live," encapsulates this ethos.
Since its inception Liberland has garnered significant attention, with over 500,000 individuals and investors from around the globe apparently expressing interest in obtaining citizenship. Currently though, its permanent population appears to be zero.
Liberland promises an e-Government where public and private affairs are managed digitally, from property titles to business operations. The fiscal policy is somewhat unusual, with zero obligatory taxes, allowing residents and citizens to make voluntary contributions to the government.
🤔 And rather than a constitution, it has a GitHub repository.
Despite its digital advancements, Liberland is still in a developmental, if not theoretical, phase. While it has ambitious plans, including architectural projects to accommodate its growing population, it currently does not offer tangible travel or living benefits. In fact, even its self-styled creator has had trouble setting foot there at times.
No member of the UN has recognized Liberland diplomatically, though not surprisingly, some fellow micronations have expressed support for the initiative. Maybe, if it’s good enough for the Kingdom of Enclava and the Principality of Sealand, it’s only a matter of time?
Despite all that, Liberland’s vision of a tax-free, blockchain-powered nation has undeniably piqued the interest of many, setting the stage for an intriguing journey in the world of digital nationhood.
Can you become a Liberland e-resident?
On its website, Liberland indicates that it has an e-residency program. This in theory allows individuals to establish businesses remotely, making it a potentially attractive proposition for entrepreneurs in sectors like crypto-exchanges.
To open a company in Liberland (for €100) or to purchase property and other items (such as a houseboat with helipad, or a robot dog) on the Liberland market, one must indeed become a Liberland e-resident first. The cost for this is €150.
The application form covers some areas which will be familiar to Estonian e-residents — questions concerning criminal record, solvency and intent, for example, are not dissimilar. However, as it is quite unclear to whom this data will be submitted nor for what purpose, your correspondent was not inclined to proceed with the full application at this point, never mind to address increasingly weird questions, like “Do you respect the private property of other people? If not, please state your reservations.” and “Have you been a member of any extremist group? If yes, please specify details.”
Leaving aside whether the past tense of the latter suggests current extremist affiliations are perfectly okay, the rest of the form is all about money. Do you want to invest money into Liberland? Will you donate to Liberland? Form or move a business there…?
While I did not proceed with the application, this update page suggests that e-residency is part of the pathway to nationality: It is the first step towards citizenship. Also, it will allow you to remotely incorporate your company in Liberland and to take advantage of our to-be-launched e-services. It also indicates that citizens will gain the right to settle in Liberland when we gain full control of our land.
Wired Magazine in July suggested that more than 6,000 people have now signed up as paying e-residents, and roughly 1,000 have paid $5,000 or made an equivalent contribution to become full citizens.
Where is the Liberland project today?
While the micronation of Liberland’s existence was declared in 2015, it appears that some important shifts have happened more recently.
The Liberland press office has stated that just now in August 2023, an open border crossing from Zmajevac in Croatia has been established, so there is now a way to enter the territory, and Jedlička claims to have built a small house there.
It sounds like the Croatian police, now part of the Schengen zone, are managing the river side of the territory carefully, to prevent illegal entry from non-Schengen Serbia. But Jedlička describes the situation as a “great success,” and told Wired, “we are using this opportunity to prepare for permanent settlement. We have finished our homework. I don’t think there is any way we could fail. The question is only how fast things will grow. I don’t even consider the other option.”
Liberland’s crypto economy
Further developments include the launch of its native crypto token, the Liberland Merit (LLM). This token is built on the Bitcoin Cash network using the Simple Ledger protocol, but as it does not appear to be traded on exchanges, it's very hard to learn anything about its marketcap or valuation.
On the Liberland website the optimistic exchange rate of 1LLM to 1USD is used:
Their “blockchain system” was unveiled this past April, but the token’s block explorer suggests the initial mint (of 100 trillion LLMs) took place in 2019. There now seems to be a separate token, the Liberland Dollar (LLD) intended as the medium of exchange, with the LLM used for governance, (there’s a governance test chain running on Substrate/Polkadot).
There’s a complex staking model which seems to be prototyping total government, even citizenship, on the blockchain — which would be a revolutionary model. The auto-responding email from the Liberland e-residency team declares that the merit token is yet to be launched, but that I will definitely receive some if I proceed to order the e-residence card.
Overall then there is a lack of consistency about the tokenomics underpinning Liberland’s governance and economic plans, or maybe there is simply no-one updating their communications consistently.
But who are the citizens and token holders, and what does it mean to hold digital equity in an emergent micronation that, until recently, no-one could even visit?
Are e-residents actually citizens or residents of Liberland?
Since the August border crossing announcement, a new page has appeared on the Liberland website about fast track citizenship — bearing the title ‘Let’s settle Liberland’
Visitors and potential settlers are invited to visit Liberland in person, via the Croatian border point, on submission of a €5 fee and a survey form. Attendees are advised to wear sturdy shoes and outdoor gear for their visit, because the crossing is open to foot or bike traffic only, and ‘infrastructure is rudimentary’.
According to the website, citizens with at least 5000 merits are welcome to claim their land, where 10 merits = 1 square meter, on a first-come first-served basis — at their official valuation indicated above, this makes it about three times more expensive than arable land in the rest of Croatia.
You also need to stay in Liberland to legitimize the claim, register it on their blockchain, and commence construction within one year. You can also outsource these requirements, if perhaps you don’t possess adequate footwear. And you can in turn be hired as a settler to carry out these tasks on behalf of a token holder, thus gaining citizenship yourself despite not holding tokens.
Liberland’s future as a physical and digital nation
Given these recent shifts, it’s possible that this overview will require updating sooner rather than later, and by their nature, small nations are always more agile and fast moving than some of their more traditional and cumbersome counterparts. Estonia has certainly proved that!
But however strong your pioneering mentality and libertarian mindset, should you stake the future of your business on Liberland’s success?
Liberland's ambitious vision of a digital nation, while intriguing, is not without its challenges and potential pitfalls. We’ll go into some of the primary concerns and risks associated with Liberland's digital residency and citizenship program:
Infrastructure Development
While Liberland has grand plans for architectural projects and infrastructure development, the actual realization of these projects remains uncertain. The ability to accommodate a growing population and provide essential services is crucial for its long-term viability.
Geopolitical Concerns
Located between Croatia and Serbia, Liberland is in a geopolitically sensitive area. The potential for neighboring countries to restrict access or even lay claim to the territory poses a significant risk to its sovereignty and the safety of its residents.
Economic Stability
With a fiscal policy centered around voluntary taxes and a heavy emphasis on digital currencies, there must be concerns about the economic stability and sustainability of Liberland. A robust and diversified economy is essential for any nation's long-term success.
Legal and Regulatory Concerns
As a new entity, Liberland will need to establish a comprehensive legal and regulatory framework. The clarity and enforcement of laws, especially concerning business operations, property rights, and civil liberties, will be crucial for attracting residents and investors. The enforcement of blockchain-based smart contracts in the complexity of the physical world will make for some interesting precedents.
Lack of International Recognition
One of the most significant challenges Liberland faces is gaining international recognition as a sovereign state. Without this recognition, the effectiveness and legitimacy of its passports, e-residencies, and other official documents come into question.
Long-Term Viability
While the initial interest in Liberland is high, with over 500,000 applications for citizenship, the long-term viability of the nation will depend on its ability to deliver on its promises, provide value to its residents, and adapt to changing global dynamics.
So while Liberland presents a novel and exciting vision of a digital nation, potential residents and investors should approach with caution, weighing the potential benefits against the inherent risks and challenges.
Is Liberland a serious competitor to Estonia’s e-Residency program?
If you find yourself drawn to the libertarian vision of Liberland’s proposed utopia, then perhaps you will want to stake some tokens, go and break ground on the shores of the Danube, or register for their e-residency card. The monetary investment is not massive, and maybe you will be creating your future citadel, or at least you can say you were part of a fascinating experiment in the evolution of new global statehood models.
Meanwhile, Estonia's e-Residency program stands as a proven beacon of innovation and practicality in the realm of digital nationhood. Liberland's vision is undoubtedly intriguing, but Estonia's e-residency offers tangible benefits and a proven track record to back them up.
Estonia's program is superior for entrepreneurs and businesses for many reasons, including:
- Established Reputation — fully operational since 2014 and with global recognition.
- Robust Digital Infrastructure —offering businesses a seamless online experience, which is reliable, secure and user-friendly.
- Clear Legal Framework — a transparent and well-defined legal environment for businesses, in which entrepreneurs can operate with confidence.
- Access to the EU Market — the world’s largest single trading block (because these things matter, when the state entity is not among the world’s largest.
- Global Banking and Financial Services — making it easier for businesses to operate internationally.
- Support and Resources — from dedicated service providers to informative webinars and workshops, the Estonian e-Residency support ecosystem (of which Xolo is a founding member) ensures that businesses have the tools and knowledge they need to succeed.
For borderless business, the choice is obvious.
While Liberland's digital residency and citizenship program offers a vision of the future, Estonia's e-Residency program is the present reality, providing businesses with a stable, reliable and growth-oriented environment.
Why wait for the uncertain future of a budding nation with no citizens, buildings, economy or government, when you can leverage the proven benefits of Estonia's e-Residency today?
If you're an entrepreneur or business owner looking to tap into the European market and enjoy a seamless digital business environment, Estonia is the place to be. Don't gamble on the unknown. Choose Estonia, choose Xolo, and build your business on solid, internationally-recognised territory.
About Maya
Maya Middlemiss is a freelance journalist and author, excited about the future of work, business, money, and technology. She operates her e-resident business through Xolo Leap, so that she can work frictionlessly with brands and publications all over the world, and she is the host of the Future is Freelance podcast. Exploring the social impact of technology on our changing world, and bringing those stories to life in an accessible and inclusive way, is her passion — because all of this is far too exciting to leave it to the geeks. Maya is a 'digital slowmad', originally from London, presently living with her family in Eastern Spain.