Brexit is imminent. Companies and people are all wondering what it will all mean. At this point, there are a lot of unanswered questions, but one thing is certain: the Estonian e-residency will grant anyone in United Kingdom the option to do business in the European Union.
The e-residency program has many benefits, but the biggest of all for Brits is the fact that the e-residency program allows your business to maximize the benefits of the European Union Single Market’s harmonized rules.
Among other possibilities, e-residents can:
- Establish an Estonian company online within a day;
- Administer the company from anywhere in the world;
- Conduct e-banking and remote money transfers;
- Have access to international payment service providers;
- Digitally sign and transmit documents and contracts;
- Manage accounting records and declare Estonian taxes online.
Signing up is easy. All you need to do is apply for e-residency online and collect your smart ID-card at the Estonian embassy in London. After that, you need to contact a virtual office service provider to obtain a registered address in Estonia. That done, you have to establish your company online using the company registration portal. Lastly, you need to open an Estonian bank account to access financial services. More info can be found on .
All this combined means that you can manage your business from the United Kingdom, even after it leaving the European Union, as if you were still in a European Union member state. In addition to this, the e-residency program grants you access to unique e-government features that you can hardly find in any other country, like declaring your taxes online with just a few clicks.
The first Estonian e-resident, renowned journalist at The Economist Edward Lucas has said that the Estonian e-residency has never been more useful for Brits worrying about their ability to do business in Europe post-Brexit.
It appears that many Brits are already taking advantage of this unique opportunity. According to Kaspar Korjus, managing partner of the e-residency project, the number of United Kingdom residents applying for the program has increased by a factor of 10. According to Yahoo Finance, in the week after the referendum, there were 70 applications from the United Kingdom. Fintech executives and firms are particularly keen because they want a European Union entity for passports and the euro to avoid currency fluctuations.
Korjus believes that the interest in the e-residency initiative will grow over time, though it is worth noting that there already are nearly 12 000 e-residents, of whom about five percent are from the United Kingdom. You can view detailed statistics on the e-residency initiative here.
Why Estonia over Ireland?
It’s well known that Ireland has long lured international companies to their soil, with promises of low corporate taxes. In addition, companies from the United Kingdom might be tempted to move their businesses there for the simple reason, that the language spoken there is English, too.
However, Korjus points out that the Estonian e-residency program offers many benefits that Ireland cannot match. „Our main advantage is that the entrepreneur can, when using e-residency, live wherever he desires as the administration of the company takes place through digital identity, using the ID-card. Also, Estonia’s tax system is very transparent. Our corporate tax rate is 20 percent and it’s only paid when the profit is distributed, so you don’t have to pay taxes on reinvested profits,” Korjus said to ZDNet.
It’s important to note that the e-residency program is not a way to dodge taxpaying. E-residents and companies are expected to pay tax on earnings in the countries where they are generated, and the Estonian government is committed to sharing all the necessary details with the tax authorities of the countries affected, as reported by Quartz.