By Brigitta Davidjants
Tiny Estonia, with a population of 1.5 million, has gained a reputation as an e-country. One of its most notable achievements is e-Residency. What is it, who benefits from it, and how does it relate to Armenia?
In the modern world, the economies of countries compete with different products to attract foreign investment and talent. For Estonia, such a product is an e-Residency created in 2014. This state-issued program allows foreigners to get a digital identity card in Estonia and use Estonian e-services previously exclusive to locals.
E-Residency does not grant actual citizenship or residence in Estonia and does not exempt from visa requirements; it is not linked to physical residence. However, it allows you to do business in Estonia remotely for five years. E-residents can digitally sign documents and use local information systems that recognize the Estonian ID card, freeing them from much of the bureaucracy faced when opening a business from abroad.
“Our digital citizenship is unique worldwide because it is entrepreneur-friendly. Estonia also has an extremely business-friendly culture. It’s cheap and quick to start a business, and as an entrepreneur, your administrative overheads are minimal while your activities are digitized to the maximum,” explains Katrin Vaga, Head of PR at e-Residency.
She adds that elsewhere in Europe, becoming an entrepreneur is rather elitist. In Germany or France, for example, it can take half a year to start a business.
“Even then, you may not be allowed to do it, and opening a business can cost €20,000-30,000. I believe that e-Residency democratizes entrepreneurship and makes it accessible to many people worldwide,” Vaga says.
At the same time, thanks to e-residents, Estonia’s local businesses are growing, and global companies and talents are coming to Estonia. For instance, 30 percent of Estonian startups have been created by or with e-residents, meaning that jobs are being created, and international competitiveness is increasing.
Advantages of e-Residency
E-Residency is well suited to micro-enterprises or startups whose service or product is digital or technology-based, such as software developers, business or IT consultants, but also photographers, translators, marketers, etc.
The advantage of e-Residency for the country itself is transparency. According to Vaga, in the past, people came to Estonia through notarial agreements, which now account for only half of the foreign companies operating in Estonia: “If a person comes to Estonia through a notary, we know nothing about them. But e-Residency gives us an insight into who that person is – we have their biometrics, fingerprints, copy of their passport, and so on. Therefore, it’s much safer for the state.”
One can apply for e-Residency in Estonia online and after receiving a positive answer, one can pick up their e-Residency, kit including a personal ID card and card reader, at any of Estonia’s over 40 consulates abroad or at any Police and Border Guard Board service point in Estonia.
In order to become an Estonian e-resident, a person must demonstrate a justified interest in using Estonian e-services, and the state will conduct a background check. The state can refuse to grant or suspend e-Residency, and such cases have occurred.
Armenia and e-Residency
Today, Estonia’s most significant numbers of e-residents come from Germany and Finland. Armenians are also represented. To date, 127 Armenians have been granted Estonian e-Residency and have established 44 Estonian companies.
One such example is Dexatel, founded in a small garage by Gegham Azatyan and Lilia Yeghiazaryan in 2015. It now has 75 team members and offices in Armenia, Estonia, the UAE, and Serbia. Dexatel provides omnichannel messaging and cloud-based delivery model communications, offering businesses and mobile operators a range of services to improve connectivity.
“From voice communications to messaging services, we enable seamless and efficient interactions for businesses,” explains Azat Eloyan, Chief Marketing Officer at Dexatel.
According to Eloyan, the concept of setting up an e-Residency was born out of evaluating its potential: “E-Residency offers several advantages in simplifying financial processes and creating an optimal business environment. Setting up a company with an e-Residency has allowed Dexatel to benefit from the support of the Estonian government and the well-established start-up ecosystem in the country. This approach increases our credibility and opens doors for international collaboration.”
Interestingly, Armenia also has an indirect link with the creators of the e-Residency program. In fact, the same people created Proud Engineers, a group of experts with diverse skills who help clients with their digital transformation strategy and work with Armenia. According to Andres Kütt, a member of the team working on Armenia, the country has been remarkably successful in adopting innovations from other countries, including Estonia, and improving upon them.
“The pension system is a good example – Armenia took the Estonian solution and fixed major shortcomings we have only recently managed to tackle. Armenia also has the capacity to build things from scratch: the Armenian e-health system is organizationally and technically one of the best I’ve seen anywhere,” says Kütt.
He adds, however, that digitization is a subtle process, and capacities are only a small part of it: “Having worked with Armenia for some years now, I think the biggest challenges Armenia faces lie in the overall public sector reforms and shifting expectations towards what it should look like. To build truly amazing digital services, including e-Residency, a clear separation between organizations making and executing policies, as well as a strong cooperative spirit between various government functions, is necessary. Making such change happen is not an easy task. We can help with the smaller bits of technical and organizational infrastructure and Armenia has made significant progress – e.g., the establishment of the Ministry of Interior – along this route.”
_____
- There are now more than 109,000 e-residents from over 180 countries in Estonia.
- 28,500 e-residents have started a business in Estonia, and they create 20 percent of Estonia’s new companies annually.
- To date, e-Residency has generated more than €200 million for the Estonian treasury. Specifically, for every euro invested in e-Residency, Estonia will receive €7.6 back.
The post Estonian E-Residency Open to Armenians appeared first on CIVILNET.