Hi everyone, this is Katre from the communications team in the e-Residency program. Thank you so much for your interest! We are proud to launch the first government-backed digital identity in the world. Here in Estonia, we view the e-Residency program as someting of a "governmental startup," and appreciate your thoughts and feedback.
We will soon redirect the HTTP page to HTTPS (thanks for catching that!). For now you can simply visit https://apply.e-estonia.com. We are also working to update the country lists.
After being approved as an e-Resident you are welcome to apply for a bank account and payment providers. As noted on the site, we are working on easier ways to facilitate this.
Benefits for US and global entrepreneurs include access to EU and European markets, and truly hassle-free online company administration. We are working on expanding services for individuals as well, which currently include two-factor authentication, document signing, and encryption.
Thank you again -- we are truly excited to launch this programme in open beta and welcome further questions at e-resident@gov.ee!
I commend you on the approach and this is something I was very much looking forward to. However there are a couple of constraints that will prevent me (and I think other people) to apply:
- need to visit Estonia to open a bank account
- filing taxes with an accounting software in Estonian only
Solve those 2 issues and the only one left is the unavoidable double taxation complexity: you could try adding more information to the site about this subject, for example stating with which countries Estonia has currently established treaties to avoid double taxation.
Calling this e-Residency is a mistake. It's confusing enough that a commenter here was unsure if they were eligible because their country does not allow dual citizenship.
It's a government identity you can apply for and use online that allows you to register companies, among other things- right?
As an electronic resident of Estonia what are you entitled to that you can't do in Singapore, Hong Kong, the UK, etc? The only difference I can see is that in those places you likely need to visit the country to setup the company. Those countries certainly wouldn't call that process airplane-Residency.
Electronic mail is mail that you send electronically. Here, e-Residency is not residency in any definition of the word, even the ephemeral kind. An e-Residency does not afford the bearer any entitlements not offered to a non-bearer, save for not requiring a flight to Estonia.
That said, I appreciate the innovation in an online government ID card for foreigners. The name is a mistake. More accurate would be to call it e-Airplane.
As I haven't read everything about this, I'm willing to admit there's a chance I'm wrong.
Residency in the usual sense isn't the same thing as citizenship -- lots of people are citizens of one country and residents of another.
And while the initial set of benefits don't seem a lot like residency (except insofar as being eligible for a digital ID of this type -- in countries that offer them -- is, itself, typically something that requires citizenship or residency, so in a sense calling the program that provides access to it to non-citizen non-physical-residents "e-residency" may be reasonable on that basis alone), its overtly an initial "beta" set with planned expansion.
I'm aware of the difference between residency and citizenship, that's not the issue. I deny what they are offering is typically something requiring residency. Anecdotally- I don't have residency (or citizenship to be clear) in Singapore but have government ID there I use for their services.
If they plan to expand the program to allow things typically afforded to residents of a country then that would be something. I doubt it however.
They certainly could, but they don't - there is neither Czechoslovakia nor the Czech Republic in the 'country of birth' selector. However, Czechoslovakia is incorrectly present in both 'citizenship' and 'contact information/country' selectors.
What exactly do you mean with "the first government-backed digital identity"? The German Identity card, for example, can be used for online authentication and it can store a digital signature on its chip. [ https://en.wikipedia.org/wiki/German_identity_card#Chip ]
Katre left out a key word: per their About page, it's the first transnational digital identity available to anyone in the world. German ID cards are only for physical residents of Germany.
> German ID cards are only for physical residents of Germany.
No. If you're a German citizen you can get a German ID card, even if you never set foot in Germany. See for instance http://www.brasil.diplo.de/Vertretung/brasilien/pt/Konsulars... (in Portuguese, instructions on how to get a German ID card for Brazilian residents).
The current functionality of this offer is 1) deal with Estonian government (not that useful for most of us) and 2) presenting that the Estonian government has confirmed your real-life identity and provided you with means of forwarding this confirmation (the keys). Functionality 2 is a bit undermined when people don't take the Estonian government seriously. As they might when a rather important form isn't on HTTPS, or when an error message is "Oh snap".
I dont get it, does this mean there is 0% corporation tax in Estonia? What are the taxes on wages then as in if your estonian company pays you? What other taxes should one be aware? what is the VAT rate
so many questions but their answer is "talk to a professional" which means visiting Estonia, answering some of these questions up front would make things clearer and make it easier to decide whether to apply for one
BTW has anyone here done it? a blog post on experiences pros and cons would be great...
There is a dividend tax, making this business environment expecially lucrative if your plan is to reinvest profits.
VAT is 20%
Income tax for physical person is 20% and the company has to pay on top of it roughly 33% of social taxes. There's a plan in place to reduce social tax by 1%
Other than being able to establish a company in Estonia there doesn't seem to be anything compelling about this. Those tax rates - 20% VAT and 33% social taxes - are not friendly. You have to rely on a third party for a mailing address just to open the company. And if you want to try to open a bank account you have to visit.
> Those tax rates - 20% VAT and 33% social taxes - are not friendly.
If selling in Europe (common tax area), VAT is mandatory at the point of sale. If the seller is outside Europe (common tax area) and purchaser in Europe (common tax area), the receiver of goods or services is liable to need to pay the tax, and buyers don't like tax/price surprises at point of import or use.
As for social taxes... if there are no Estonia resident employees this doesn't seem an issue.
For bank account - this seems like a headache - for banks as much as anyone, as they have to provide anti-money lending screening, which means 'know your customer' which means a physical visit from the customer. I'm sure Estonia has branches of HSBC, Citi, or other international networks, and they're working on, for example, allowing you to walk into a HSBC/Citi/etc located near where you are, and do the KYC from there. For me, this is the deal-breaker. If opening a bank account can happen without need to visit Estonia, then I'd try this, otherwise, without being able to receive or make payment, it is a nice idea but not in my use-case.
I think the small benefit here is that they let you do everything online. And they take that serious. In any other EU country there will probably be something you'll have to do in person.
So this also means you can live the nomad life. Although I guess this isn't their (only) target audience.
Doing business is a separate (though connected) subject. The e-residency is broader than business alone.
For business you'll need an accountant to do tax-related work. You'll probably be able to find one which you can communicate with online, so your nomad lifestyle is still safe.
It gets a lot more attractive (at least compared to other EU countries) if they would take the next step and simplify tax work so you don't need to spend sums like €2000-€3000 on an accountant every year.
I would expect that VAT is only relevant for products sold to Estonian residents and income/social tax only relevant if you employ residents of Estonia.
Income tax is typically based on residency, I believe the US is the only developed country in the world that taxes non-residents on income.
As I understood it, as of 2015 EU digital goods VAT must be paid based on the VAT in the customers country, regardless of whether the sellers business is located inside or outside the EU.
If so, what's the downside of having your business based in Estonia vs the US with respect to VAT?
If you and your small business are based in the US then you could ignore the VAT nonsense when selling to the customers from the EU [1]. It's not in the interest of the IRS to make you pay taxes in Europe.
"Key drivers for Estonia’s high rank are its relatively low corporate tax rate at 21 percent with no double taxation of dividend income, a nearly flat 21 percent income tax rate, a property tax that only taxes the value of land and not the value of building and structures, and a territorial tax system that exempts 100 percent of foreign profits."
I guess related to all tax/business questions "talk to a professional" means "talk to an accountant". An Estonian accountant sounds like a good choice.
As in most (all?) EU countries, all tax/business related work passes through an accountant. Am I right to believe this is different in the US? At least for one-man/small businesses?
Not sure what you mean by "passes through an accountant." In the US, a small business is typically not required to hire an accountant but it's probably a good idea--especially once you have employees and are dealing with payroll taxes, etc. Personally I've always used one even for personal taxes.
Hi everyone, this is Katre from the communications team in the e-Residency program. Thank you very much for letting us know about the HTTP and form submission errors -- we were able to resolve the issue 6-8 hours after receiving your feedback. We are still working on the country lists, and hope to have an update shortly.
Please stay tuned for news on .ee domain registration! :)
Thank you again! We appreciate your interest in the world's first transnational government-backed digital identity, and hope to continue this level of quick feedback and support. Please keep sending us bug fixes and feature suggestions!
"To this point, foreigners have found it complicated to participate in managing Estonian companies. The e-resident’s digital ID provides the needed flexibility"
Hey everyone, I am an Estonian entrepreneur residing in Silicon Valley and can set an Estonian company up for you. As a U.S. resident you are subject to controlled foreign corporation taxation if US residents own over 50 pct of Estonian corporation, but there are ways around it. If you are a minority owner you need to understand how the boards work with the b-card system (digital board of directors). Reading congressional testimony on how apple avoids taxes describes a system of avoiding CFC. Estonian eresidency is a cost effective way to implement it. I am at keith@siilats.com
> As a U.S. resident you are subject to controlled foreign corporation taxation if US residents own over 50 pct of Estonian corporation, but there are ways around it.
I have no idea what "ways around it" you might be referring to - but generally, unless it is an IRS accepted structure, even if it is compliant with the letter of the law, you can expect tens of thousands of dollars in costs of proving that compliance if you are audited.
I recommend everyone who considers this option to get a really good international tax professional on board. Those are hard to find, and very expensive - but totally worth every penny.
Have submitted my application - I'm not planning on starting any businesses right now, though it's a possibility in the future. More interested in how the Estonian government is actually experimenting with technology in a way that other countries are yet to try - am hoping for more services to become available eventually.
(To be fair, they also do internet voting, which I'm not a huge fan of...)
The full name of the country is "United Kingdom of Great Britain and Northern Ireland" - calling it "Great Britain" is just wrong (it excludes Northern Ireland and all other smaller islands). You would also hope an official website can get it correct.
Although entire languages get it wrong - in German the UK is translated as "Großbritannien". Edit: they do have translation for UK ("Vereinigtes Königreich") but I've never heard it said/written yet... I think I'll start using it.
A worse version is when "England" is used to refer to the UK. It's very common, maybe less so in official contexts.
There's a massive difference between the two. The Welsh, Scottish and Northern Irish (plus islanders and whatnot) tend to get pretty peeved when you refer to them as English.
I accept that people outside the UK might not care, but I don't think that's necessarily the case. There's also a significant difference between making the mistake in casual conversation and on a formal document.
There's not a massive difference. These are people who speak (for the most part) the same language, have (for the most part) the same religion (Christianity), live a few miles from each others, listen to the same music, watch the same tv shows and read similar books at home and school. Sorry, but for outsiders, you are the same people and for the most part, they'd be right to think so. People are not that different, especially people who have so much in common as the inhabitants of the UK, get over yourself, you're not that special.
I'm sure you don't know and care that southern Peruvians from Arequipa like to be called Arequipaños and wouldn't like being mistaken with Northern Peruvian from the Jungle etc. Thing is they're the same to any outsider.
Calling all Americans Yankees is exactly like calling all Britons English. It's not a slur unless used as one (Yankees are, roughly, people from New England/northeast U.S.) but many people will take offense when incorrectly labelled so - even if "no one cares". You could imagine a Breton's reaction to being called a Parisian to be roughly similar. Or a self-professed Catalonian being described as Castilian. Or an American asking about best place to get currywurst or bangers and mash in Paris, I mean all these places are pretty similar anyway, y'all listen to Eurovision, sorry if that offends you...
It's not offensive. Of course it's not. It's just blatantly incorrect. Your taking a group of 4 countries + some islands and referring to them by one of the 4 countries names. It'll confuse people. They now have to think: when he says 'England' does he actually mean England - which would be the obvious meaning - or is he one of those people that has no understanding of geography and is actually referring to a group of several countries? If you refuse to use the correct terminology, even when you are very obviously wrong, you're just confusing people unnecessarily.
This distinction has traditionally never been very important in Germany, so people didn't habitually make the distinction.
That's exactly the point: you have no idea about usage and connotations in German, but still consider yourself an expert who should have the power to prescribe a foreign language.
As an aside: we're also lumping together (dancing) balls and (foot)balls. And lots of other things.
This is the first Germany has been brought up in the conversation. At no point was I discussing use in languages other than English and at no point did I argue that. It seems you argument has fallen apart and you have resorted to changing it.
The political country I have citizenship in has a name, it's written on my passport - it is not "England".
Maybe you can see the problem if I explain it in this way: you can become British (meaning "UK-ish"), but you cannot become English.
Not only is it technically wrong, but it also contributes to perpetuating the dominance of England over the other parts of the UK.
I try to clear midconceptions/misunderstands of other countries when I know better, I would invite you to do the same now you know more :)
Hopefully I can soothe some your resentment of my accusation too - I have been learning about Germany and the forms it existed in before the unification of the states in 1871 - the culture goes back a lot further than this, I am currently learning German and planning an extended tour by bicycle (when I have learnt enough) so I can get more deeply into this topic.
Because for Swiss people like you, Welsh people like us don't like doing business with Bavarians who call us English. Maybe if you weren't Austrian, you'd understand.
Your examples are completely wrong. The Netherlands is sometimes mistakenly refered to as Holland because this for a time this was the accepted way of referring to the country and its people. It has never been the accepted way to refer to Scottish as English or Welsh as English or Northern Irish as English.
The American comparison would be more suitable if you referred to the whole of the USA as Washington DC.
Interestingly, it used to be pretty common in the US to refer to the Netherlands as Holland--maybe even the norm. Anecdotally, this usage seems far less common today. I have to confess that I didn't know until I looked it up just now that Holland was a region within the Netherlands.
In English--I have no opinion about other languages--it would certainly seem odd to refer to the entire of the UK as "England." For example, you'll get looked at funny if you say you're going to Edinburgh in England next week.
[Edit: My recollection is that it also used to be more common to refer to the "U.K." as Great Britain.]
Because Holland is a region within The Netherlands. Northern Ireland, Scotland, England and Wales are completely separate countries. Holland is not. NI/S/W are not part of England.
Calling it a kingdom is also wrong. It has only a queen, not a king. But really, I'd be surprised if any typical person outside of UK knew the difference. I'm a British citizen (of the 1st kind) but had no idea till now that Northern Ireland is not part of Britain! Let's all just call it England because that's so common already.
You can be a citizen (or national) of the United Kindom (of GB and NI) but not simply of Great Britain though.
It also makes it a pain to find, I spent a good amount of time looking through different entries (UK, United Kingdom, British, England, Great Britain etc.).
Being eresident means you get a smart card that generates a private key on the chip and public key is stored in a public ldap server. There is also a cross platform actively used client "digidoc" that makes it easy to send encrypted and signed docs between residents.
e-Residency does not confer citizenship, tax residency, residence
or right of entry to Estonia or to the European Union.
The e-Resident smart ID card is not a physical identification
or a travel document, and does not display a photo.
Serious question, if you were to never disclose your dual nationality, would the Indian government ever find out? Any idea how the government stores the data, and if it's cross-linked with any other services?
They probably wouldn't from what I've seen. But it can be a hassle sometimes if they're particularly hellbent on finding out — Case in point, Sonia Gandhi had to pass on being Prime Minister because she held dual citizenship (to put that in context, she is or was at the time one of the most popular politicians)
If there was ever a time to slip through the cracks, it would be right now. From my pretty limited experience, the data held by the Indian government is in a transition to digital form, but isn't standardized yet.
There's an incredible opportunity for Indian nationals (and former nationals) to take advantage of the transition period.
We will soon redirect the HTTP page to HTTPS (thanks for catching that!). For now you can simply visit https://apply.e-estonia.com. We are also working to update the country lists.
After being approved as an e-Resident you are welcome to apply for a bank account and payment providers. As noted on the site, we are working on easier ways to facilitate this.
Benefits for US and global entrepreneurs include access to EU and European markets, and truly hassle-free online company administration. We are working on expanding services for individuals as well, which currently include two-factor authentication, document signing, and encryption.
Thank you again -- we are truly excited to launch this programme in open beta and welcome further questions at e-resident@gov.ee!