After many years spent working as a graphic designer in Istanbul, Dante Işıl Özkan started getting bored: “I felt like I was losing my creativity because I was caged. As a designer, I wanted to totally revolutionize the user-experience world.” In 2015, Dante finally had enough and decided to jump straight into cold water with nothing but an idea for a better UX-consulting process. She gathered a few friends together to help her build this dream, and that’s how Oktopeople was born.
Success was not immediate, but after her services increased an e-commerce site’s revenues by 221%, the young Turkish woman was assured of her potential. “The only problem for her was that she found it difficult to find U.S. and Europe based clients.” And then she found e-Residency.
A Seductive Digital Infrastructure
Launched in 2014 in Estonia, e-Residency gives non-residents the chance to become e-residents, meaning that they could receive a digital identity card, have an address, open a bank account, set up a company, and have access to the European market all the while enjoying the quality of digital services that Estonia offers since its bureaucratic processes went paperless back in 2001.
That same year, Estonia developed their X-Road IT system, which allowed its citizens to pay taxes, vote, and correspond with schools by online means. Kaspar Korjus (e-Residency’s manager) explains that since 2012 the country uses a blockchain in health, judicial, legal, and commercial sectors.
“Blockchain is a type of database that is spread out on many sites, countries, or even institutions” and whose entries “are configured in ‘blocks’ and chained up using digital cryptographic signatures, hence the name blockchain. A blockchain is essentially an incorruptible block of data, and this data can be saved from almost anywhere.”
Chainblock allow Estonians to better control their data: “Take the health sector for example. Not many in the world can tell you where their medical files are and who consulted them. Estonians, however, can use their digital I.D. to connect to their own files and see which medical professional also connected to their file and when.”
The digital Estonian infrastructure allows anyone to set up a company there in a day, to then be able to run it online, to have access to bank services and payment cards, to use international payment service providers, to declare taxes, and sign documents. That is what seduced Dante Işıl Özkan.
Kaspar Korjus shakes French President Emmanuel Macron’s hand during the Tallinn Digital Summit in Septembre 2017.
For a Stronger Estonia
“The first thing that caught my attention was ‘work from anywhere,’ it’s a location-independent business, and applying for e-Residency was quite easy.”, Dante testifies on the site for e-Residency, which has a growing census of 45,000 e-residents from across 160 countries.
Kaspar Korjus assures us that, “The e-Residency programme is inclusive. Everyone in the world can become an e-resident of Estonia. Our programme is also rewarding. We believe that everyone must be given the same access to the necessary tools for becoming a prosperous entrepreneur and achieve their full potential.”
We believe in the principle of equal opportunity. Those that have the same level of talent, ability, and the same willingness to use their gifts must be given the same chance of success, no matter where they come from or their social status. Our message to entrepreneurs is simple: “focus on your ideas, your company, your product; we are keeping the door open for you.”
That said, the e-Residency programme is not a charity organisation. The programme director tells us that “It helps us make our country stronger and better. Because we firmly believe that our inclusiveness and openness will help us build a better future for all Estonians. This vision is shared with how states will evolve.”
“Nowadays, a freer contract is needed between citizens and states, which involves a new social contract with the freedom for change, if that is the wish of the citizen. Because, having a rigid state system that takes care of people from the cradle to the grave is obsolete in an age where the workforce keeps increasing.”
The e-Residency programme allows Estonia, a small Baltic country of 1.3 million people stuck between the imposing Russia and rich Finland, to carry their message. “It is a way of gaining international renown” underlines Arnaud Castaignet, who is responsible for e-Residency’s international relations and is the programme’s only French member.
It is a truly efficient way of doing it, because as of now, Estonia is the only public partner of e-Trade for all, a United Nations Conference on Trade and Development initiative that aims to “ improve the ability of developing countries and countries with economies in transition to use and benefit from e-commerce.” since 2016.
The majority of developing countries remain behind in e-commerce.
Estonia, tax haven or not?
The e-Residence programme benefits Estonian digital companies such as Lean In, among others. That particular startup specialises in accounting and administration for remotely-based companies and is now the third Estonian startup in economic growth, and “it is entirely dependent on e-residents” according to Arnaud Castaignet.
Since its creation in 2014, and according to the Estonian government, the e-Residency programme has made 14,5 million euros. In 2025 this number would go up to 1 billion euros if the projected e-Resident numbers of 150,000 are correct. Furthermore, the external relations manager tells us that, “there is barely any need for investment, because the digital infrastructure is already all set up.”
The result of this is that the e-Residency programme always receives “political, government, and parliamentary delegations” that would like to follow suit and create a similar programme in their own country. “Lithuania is working on it, and Azerbaijan has announced the launch of a similar programme that uses mobile identity.”
“But beware”, warns Arnaud Castaignet, “that if any state can develop their own e-Residency programme, you can be sure it will be based on the Estonian model. Because this type of programme is above all dependent on the degree of digital development of each company, as well as, the importance that company places on private life protection.”
This type of programme is also dependent on the tax system of the country in which it is being developed. Because of this, Estonia has already been accused of because a tax haven. The external relations manager retaliates that “in fact, the companies established in Estonia thanks to e-Residency create value somewhere else and pay taxes there too.” The proof of this is that out of the 14,5 million euros that the programme brought to Estonia, only 1 million accounts for taxes.
It is true that the Estonian taxation system facilitates the creation of companies because the 1 million euro of taxes is only for company shares and not profit distribution. But unlike Luxembourg or Panama, Estonia does not practise bank secrecy. Furthermore, the e-Residency programme does not offer tax residence nor does it offer the right to live in the country.
To validate the e-resident status, security measures mean that applicants must visit Estonia or an Estonian Embassy to pick up their resident card after Estonian administration verifies their identity and criminal record, all of which takes between two and four weeks.