By: Suman Sharma
Aimed at attracting entrepreneurs, Estonia- the world’s most digitised country, has been running its highly successful e-Residency programme for a decade, with over 119,700 participants from 180 countries from around the world. This initiative is particularly appealing to entrepreneurs who want to leverage Estonia’s digital infrastructure and business-friendly environment while maintaining flexibility in their operations. The maximum e-residents are from Germany, Ukraine and Spain, with India ranking ninth, in establishing businesses online. More than 4000 Indians are registered as entrepreneurs utilizing Estonia’s e-Residency programme, thereby setting up more than 1000 companies mostly dealing with IT (information technology), telecom, e-Commerce, software development, consultancy etc. Reliance Chief Mukesh Ambani’s Jio Reliance too is registered in Estonia under the e-Residency scheme.
Since early 2022, citizens of Russia and Belarus have been unable to register as first-time e-residents due to sanctions related to the war in Ukraine.
How this works
Estonia’s e-Residency program does not grant automatic citizenship. E-Residency is a digital identity provided by the Estonian government that allows non-Estonians to access various online services, such as starting and managing a business in Estonia, opening a bank account, and signing documents digitally. However, e-Residency does not confer any legal residency rights to live in Estonia or the European Union (EU). If interested in citizenship, one needs to go through the appropriate immigration processes, which typically involve residency requirements, language proficiency, and other criteria.
Johanna-Kadri Kuusk from the E-Governance Centre, Tallinn says, “Residency is a useful tool considering business in Estonia-which is the gateway to the EU, but it does not replace the need for a visa or residency permit if one wishes to live in Estonia.”
Estonian Minister of Justice and IT, Liisa Pakosta explains taxation in the E-Residency scheme, which itself does not automatically make one a tax resident of Estonia, however the corporate tax rate is 20 percent on distributed profits. Anyone running a business in Estonia who is not a tax resident, may not be subject to Estonian taxes on worldwide income.
Benefits of the scheme include, access to the EU markets, efficient and transparent business environment, utilisation of various digital services like online banking, payment processing, and accounting and remote management.
The most popular sectors where foreign nationals are signing up for E-Residency are IT, software development, finance, investment, crypto-related businesses, e-commerce, creative industries, consultancy services, online education and training.
Jio Estonia OÜ
Jio Estonia OÜ was incorporated in Estonia in November 2018 by Reliance Industrial Investments and Holdings Limited (RIIHL), a wholly-owned subsidiary of the company, with an aim to focus on software development and provide consultancy services for current and future technology initiatives undertaken by the group and its subsidiaries.
Jio operations in Estonia and other European markets are handled by Taavi Kotka through his Tallinn office. The entire paid-up share capital of Jio Estonia OÜ is held by RIIHL Kotka says, “E-Residency enables faster and hassle-free transactions and also is a useful tool where Indian talent and digitisation combine successfully.”
This overseas initiative has helped Reliance Jio Infocomm (Jio), the group’s telecom arm, establish a presence in European markets. By creating a unit dedicated to advanced technologies, the Ambani-led firm is set to delve into emerging fields such as blockchain.
Kotka adds, “Most Indians are looking for better business-opportunities with Europe. For European companies it is easier to do business with an Estonian company compared to any other international company. We hope the number of Indians registering companies in Estonia would increase.”
About the Author
Suman Sharma is a former instructor from the Indian Military Academy, Dehradun and has been a journalist for almost two decades in various respectable national and international media houses, covering and reporting on security, strategy, military diplomacy and international relations. She has won numerous national and international awards including the Great Women Achievers award.
