Indeed, as a Xolo customer, you never need to worry about spreadsheets and charts and algorithms, because all that goes on under the hood through our unique tech stack. You just focus on doing what you do, and raising the right sales invoices when you’re done. You have the headspace to focus on and measure what matters to you, depending on your business goals.
But all of these things involve measurement, whether you’re prioritizing growth or customer acquisition or profit in your business. So, numbers do matter, even when it comes to managing your cashflow, or benchmarking yourself against competitors.
The technology we all take for granted enables you to be data-driven about your business decisions, in ways which required complex calculation in the past. Thanks to the Xolo portal you never need to calculate how much VAT to add to an invoice or what your total expenses are on a trip.You do need to figure out what you’re earning per hour, or how that stacks up in your local currency.
You'll want to track your earnings over time as well, and budget accordingly. And if you provide services to clients, then it’s vital to be able to work out which lines of business are generating profit for you, and which clients are worth every cent despite the hassle overload of working with them (or not — in which case you can happily drop them from your plans!).
Surely that’s enough data for any solopreneur?
It could be. Butt at the same time as being a sole operator, you are also part of a global movement pioneering new ways of doing business in the future of work. And while those numbers might not inform your business planning for the next quarter, they are important and interesting at the macro level, as well as giving you context for the future of work, freelancing, and location-independent operation.
The growth of the e-Residency network might signify future sources of collaboration, funding, or customers for you and your business, as well as being cool to know about anyway. So, we wanted to share some statistics about the network you are part of, to help you appreciate and embrace the bigger picture, as an Estonian e-Resident.
The innovative Estonian e-Residency program was initiated in 2014, and since that time, its growth has increased year-on-year:
This is a classic growth chart that any startup or campaign would be proud of — steadily up and to the right at all times.
You will notice that there is more of a stretched s-curve in the initial period. The scheme established itself in global awareness gradually over the first year or so, then accelerated to meet the needs of a growing number of entrepreneurs as it got into its stride through 2017-2018 (including the needs of your author around that time, incidentally).
Since 2019 it’s been a pretty straight line in the preferred direction, without so much as a blip in the face of huge macroeconomic black swan events like the coronavirus pandemic or war in Europe.
At the time of writing, the total number of Estonian e-residents is 96996, with just over 1000 new applicants being approved each month.
That means the psychologically significant threshold of 100k should be passed some time in the middle of 2023 — so let’s hope the department has something fun planned to celebrate the arrival of e-resident number 100,000!
That will also bring the number of e-residents close to 10% of the total number of Estonian nationally resident people, which is 1.3 m. This means that e-residents are a powerful constituency of the population, and there are even official representation channels for e-residents to make their voice heard at a policy level in Estonia.
When it comes to why all those thousands of non-Estonians have sought access to the digital business infrastructure of this tiny Baltic nation, the main reason that motivates many to do so, is to set up a business.
There are so many advantages to doing this, over a local solution, depending on where you are presently living — whether you need a trading presence in the EU and Eurozone, or contractual protection through limited liability. Even if you simply want to avoid the costs and risks of company formation in the country where you live, but where setting up a business is a far more drawn-out and expensive process.
So far, 23645 Estonian companies have been established by e-residents, reflecting about a quarter of the total number of individual people. In the most recent complete month, 387 new companies were established by e-residents.
Despite the popularity of the Osauhing (OÜ) private limited company-of-one setup, some of this total number of businesses includes partnerships or larger groups of shareholders in a single trading entity. It also includes freelancers taking advantage of streamlined services like Xolo Go, who have not (yet) felt the need to formalize their activities by constituting a business of their own.
Of course, not everybody joins the Estonian e-Residency programme with the intention to immediately form a company, as we shall see below. And as the speed of company formation is so amazingly fast for existing e-residents, some will plan ahead and nail the e-Residency element well before they actually need it — because applying for and acquiring the digital identity kit inevitably takes several weeks, it’s definitely smart to plan in advance.
For anyone who wants to operate a location-independent business, or quickly form a private limited company they can operate from anywhere, the benefits of Estonian e-Residency are obvious and immediate.
And today the infrastructure and marketplace of service providers is so well developed, it’s incredibly straightforward for any entrepreneur to take advantage of the scheme to develop their online business.
However, each applicant still has to provide a ‘motivation statement’ to the Estonian Police and Border Guard as part of their submission, and the e-Residency department suggest you mention anything notable about your past experience and future plans.
Examining your motivations more deeply, perhaps the whole programme aligns with a personal vision you share about business without borders? The very first e-resident was Edward Lucas in 2014, at that time a Senior Editor at the Economist, who was presented with his card by the President of Estonia. Second, and the first to apply via the online procedure, was Hamid Tahsildoost who worked for Skype in the US, who applied for it because, “it’s the type of project that can change the world, and I wanted to be among the first to use it.”
Your personal motivation statement might be as lofty and aspirational, or much more practical and mundane… But we will never know, that is between you and the Estonian Police and Border Guard, and we have no statistical analysis on that to share with you!
Some things are much easier to quantify though:
You’ll be in good company when you do acquire your e-citizenship, among nearly 100,000 fellow e-residents.
But who are they anyway?
E-residents in Estonia come from all over the world! But some come much further than others:
This aggregated snapshot interestingly shows that the highest number of e-residents are from Russia. However, citizens of Russia and Belarus have been unable to register as first-time Estonian e-residents since sanctions related to the war in Ukraine early in 2022 — and at the time of this data capture, Ukraine is one e-resident behind!
So with e-Residency fees presently fully reimbursed for Ukraine citizens, it’s safe to say that we anticipate Ukrainian nationals forming the largest single cohort of e-residents for the year ahead. Слава Україні! 🇺🇦
(Xolo and others in the e-Residency Marketplace also offer related startup packages to smooth the way and support new Ukrainian e-resident enterprises, so they can maintain location-independent continuity or get going fast with their new ventures.)
Ukrainian e-residents are already out in front when it comes to company formation, incidentally — followed in order by Germany, Russia, Spain, Turkey, France, Italy, and the UK.
Looking at the rest of the table for the top 15 countries of origin, you can see that while large nations like China, India and the US are well represented, a great many e-Estonians are, in fact, their fellow Europeans!
This is interesting, because while an EU business presence is clearly an attractive factor for many people, all EU business frameworks are not created equally. The cost and complications of freelancing, never mind setting up a business, in Germany, Spain or Italy, can take many aspiring entrepreneurs by surprise.
Until we have a convergent regulatory framework, this will continue to be the case.
But, Estonian e-Residency can provide a solution for these internationally-minded Europeans, just as easily as those from further afield. This includes a number of British entrepreneurs, who may have had their EU citizenship summarily stripped away, but still want to do business with the rest of the world, and deal with Eurozone clients in their native currency.
With Spain and Ukraine currently leading the way for applications in the previous quarter, the European focus will continue to thrive in a worldwide growth pattern.
But at the other end of the table above, there are lonely single e-residents who are presently the sole representative of the program in their own countries, which include Bhutan, Cape Verde, Eswatini, Lichtenstein and Sierra Leone. Let’s hope these pioneers are joined by some local compatriots in 2023!
179 different nations are represented in all, proving that Estonian e-Residency truly is a global movement.
Estonia’s commercial code is broad and inclusive and there are very few kinds of company you cannot set up and run as an e-resident.
Some kinds of business may require specialist licensing: for example, if you want to operate in the cryptocurrency or gambling industries — but with over 120 service providers currently registered on the e-Residency marketplace, you can probably find the right expert help to support you in creating whatever your business vision can conjure up.
Because of the digital nature of Estonian business administration, combined with the diverse geography of the e-residents themselves, one thing will not surprise you: there’s a big digital bias. Out of the 23k+ e-resident businesses, more than 6,000 of those are in the computer programming, consultancy, and related activities category.
This is closely followed by the category of head offices and management consultancy, which clearly covers a wide range of different types of business. Sectors like publishing and information services are also strongly represented, along with financial services and advertising activities.
What all of these sectors have in common is that they are easily managed on a fully online basis, which is clearly a great fit for Estonia’s business framework.
It gives the operators the option of being completely location-independent, even living in a digital nomad style with no permanent place of abode. Their business has a permanent address and structure, and they can live or travel anywhere. Estonian e-Residency is the perfect way to enable this kind of globally mobile lifestyle.
But this is not the only kind of business you can set up in Estonia with e-Residency, and retail and wholesale traders are also significantly represented.
In fact, the beauty of e-Residency’s structure is that you could be an entrepreneur living in Country A, selling goods manufactured in Country B, delivered directly to countries C, D, E and F… while none of those countries need to include Estonia, and you operate the entire thing online!
There are also plenty of other kinds of businesses that Estonian e-residents have created, from the well-known and defined to the deeply niche and pioneering, such as (with business count in brackets):
Not all of these would be suitable to operate through the Xolo Leap service, but as the e-Residency service marketplace continues to diversify and differentiate, there will be someone out there to help you figure it out, and find a way to realize your business vision in Estonia.
And whatever you do professionally, the number one thing you need to know is that you will be in good company when you do so!
So come and add to these statistics! Right now, you can take advantage of 3 months free Xolo Leap campaign to kick-start your business in Estonia!
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.
and get the latest updates and expert
business tips straight to your inbox.