ID card

One week ago, I applied to for e-residency of Estonia, in the wake of the UK’s decision to leave the European Union. Even if you feel positive or optimistic, you’d have to agree that UK businesses are heading into a prolonged period of uncertainty. Depending on the way you run your business, e-residency may be an option worth exploring.

E-residency ID cardEstonia launched its e-residency programme in 2014. It may help you to retain some of the important benefits we may lose when the UK finally exits the EU. You may want to register now; equally, it may be sensible to wait. We’ve already registered, just in case.

Before You Apply for E-Residency

If you’re unsure about the impact of a political decision on your business, ask your accountant for their advice. Ours was quick to point out that we are in a state of uncertainty, so we cannot plan for anything while we don’t have the facts.

I would caution against registering as an e-citizen of Estonia if:

  • You don’t have the cash for the application.
  • You’re not reliant on strong connections to the EU to do business.
  • You want to ensure your residency in the EU (this programme doesn’t offer that).

But even if we just take e-residency as an experiment in virtual business, it is definitely interesting.

What is Estonian E-Residency?

Estonia’s e-residency scheme is designed to increase the number of businesses operating out of the country. The e-residency card gives you the right to set up a business in Estonia, which is important for UK residents for two reasons.

  1. You can have a virtual business address in Estonia, which then opens up the possibility of signing up for services with EU providers under EU law. This could be a benefit if you want to store data in the cloud, for example, since we don’t yet know whether existing EU information security or data protection law will apply to the UK. (Yes, this could be a horrendous mess for companies operating in the cloud.) It could also let you lock in EU discounts when we exit.
  2. You could potentially open a euro bank account. The pound has recovered against the euro since its initial crash, but we’re in the early stages of a very long withdrawal process. If you work for clients that pay you in euros, having a bank account may not be a bad idea. (You will need to go to Estonia to open the account, but you can manage it online.)

Estonia’s e-residency programme does not give you citizenship in Estonia, and it does not give you the right to travel in the Schengen area. If you’re concerned about citizenship, it might be better to look into your options for obtaining a passport within an EU country first.

Applying for E-Residency

The application process is all done online, and there’s just one form to fill in. You will need a photo of yourself that complies with the requirements, so it’s best to get that ready before you start. Additionally, you’ll need a photo of your UK passport.

When the form’s done, you pay a registration fee of €101.99.

The application process takes anything from two to eight weeks; mine was accepted within a month.

You’ll pick up your Estonian card from one of the designated pick-up points, which are Estonian embassies or similar. There’s only one pick-up location in the UK — the embassy in Knightsbridge — so factor in the cost of getting there. You don’t need to attend an interview, but you will have to give your fingerprints before your card is handed over. If you don’t attend within 6 months, your card will be returned to Estonia.

Naturally, there is a chance your application will be declined. In that event, we’d have to assume that you won’t get a refund.

Other Reasons to Apply for E-Residency

Estonia is very keen to project itself as a forward-thinking, digitally engaged country, and e-residency is one way that it’s promoting a digitally transformed approach to business and life. Estonians enjoy access to voting, healthcare records, law, policing and education through one portal. This, to me, seems like an initiative modern digitally-minded people should support.

E-residency will give you a means to sign contracts legally in Estonia, which could be handy for freelancers employed by EU clients. You get your own digital encryption key that can be used for e-signing online.

Here’s an important downside. The system does not change your tax residency. You need professional advice to avoid being taxed twice. In any case, any change to your business circumstances or structure should be run by an accountant, before you go ahead.

Summary

The fallout from Brexit has been alarming for us as a micro-business, soon to be ripped out of our core market. We are certainly not the only people who are worried, as the massive viral response to my Brexit blog has proven.

Estonian e-residency is not going to fix anything for you immediately. We don’t know if it’s necessary or not, because we don’t know what we’re losing or gaining yet. But people who do business with the EU may want to look into it as an option, just in case.

Update, 29 April 2017: We’ve now started the process of setting up a business in Estonia using my e-residency card. For more information, see our press release here.

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Claire Broadley

Technical writer, blogger, and editor at Red Robot Media
Claire Broadley is CEO at Red Robot Media and Lead Editor at Digital.com. She is a professional tech blogger writing for a range of publications on online privacy, consumer technology, and small business services.
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