How location independent freelancers and entrepreneurs can benefit from Estonian e-Residency

Written by Xolo
on August 29, 2017

If you’re an active member of any digital nomad community on Facebook, you’ve probably heard someone asking or talking about Estonian e-Residency. But what actually is e-Residency and how can location independent freelancers and entrepreneurs benefit from it?

First let’s take a step back and explain how Estonia emerged from the post-Soviet world into a Nordic powerhouse with one of the world’s most advanced digital infrastructures. This “rags to riches” story began through necessity — with a small population (only 1.3. Million people) Estonia could not financially afford to have a large government bureaucracy servicing its citizens.

Yet society still needs to function to the same level, or even better than traditional societal structures. For Estonia, investing into a digital infrastructure made financial sense in order to avoid costs and to streamline processes. Now, Estonians can digitally sign documents, open up bank accounts without ever going to the bank office, or vote online at general elections. These are but a few cool things Estonians can do online. Soon the business world caught on — in Estonia you can incorporate a company in 18 minutes or do your personal tax returns in 3 minutes. Everything is paperless and accessible online from any location in the world. (Well, if you have internet!)

As digital services are accessible to Estonians anywhere in the world, the next logical step was to make them accessible to other citizens, anywhere in the world. Thus, the concept of e-Residency was born — a digital identity that provides non-residents access to the digital services provided by the Estonian government.

What it’s not for

First of all, I’d like to clear up some common misconceptions:

  • Estonian e-Residency card is not a physical ID card, and it can’t be used as a travel document.
  • Importantly, e-Residency will not grant you citizenship, tax residency, residence permit of rights, or entry into Estonia or the rest of the European Union

So why apply for it?

It takes 18 minutes to register a business in Estonia. Photo credits: Rasmus Jurkatam for

As a travelling professional or entrepreneur who has customers located all over the world — you are a part of a new growing breed — location independent people. You have no strong business connections to only one physical location and you may often live in 3–4 different countries throughout the year. Does that sound like you?

Where should you incorporate your business? For digital nomads with big existing big businesses, Estonia might not be the primary solution. You may obtain for example, deals in Hong Kong or Ireland. Your maintenance costs would be considerably higher than running your business in Estonia but you’d pay less taxes and the larger the company, the more sense this would make. However, for example, a freelancer earning up to €6000 a month, it would make sound business sense to incorporate his/her business in Estonia.

So how have travelling freelancers and entrepreneurs benefited from Estonian e-Residency? The only significant use of Estonian e-Residency is being able to create and manage an Estonian incorporated business. This may sound a bit blunt at first — after all why should anyone in their right mind incorporate his/her business in this small Nordic country? Here are some of the reasons we’ve gathered from our customers:

  1. You can administer your Estonian company from anywhere in the world. Furthermore, you can start and manage your company without ever setting foot in Estonia. (LeapIN, for example has customers from over 90 countries)
  2. Estonia is a known for it’s lack of bureaucratic BS, allowing you to maximise time spent working ON growing your business and less time administering your business. Say goodbye to boring bureaucracy.
  3. A base inside the European Union. Meaning that you reap the benefits of the Common Market (talking to you here Brits) and your company will have an European VAT number (if your business requires one). And access a number of payment gateways that may not be available in your home country.
  4. Simple tax system — Estonian tax system has been voted as the most competitive tax system in the OECD. (mostly known for it’s 0% tax on money reinvested within the company)

Sounds interesting?

So freelancers, entrepreneurs and small business owners who want to make their business easy to manage, location independent and obtain a foothold inside the EU should consider Estonia as the harbour for their business.

Want to know more and have additional questions? Check out the e-Estonia website for e-Residency or LeapIN’s FAQ for further information regarding company creation. LeapIN is committed to becoming the go-to platform for people interested in starting and running a location independent company. LeapIN not only helps you set up a business and a bank account, but also manages and administers your day-to-day accounting, legal and financial matters. Join us so you can spend more time working ON your business and spend less time on the day-to-day administrative hassles.