In the first half of 2022, Estonia collected €24 million in tax revenue from e-residents, exceeding last year’s record numbers by 85%.
Labour taxes accounted for the vast majority of the tax receipts during this period – 68% or €16.32 million. The remaining 32% was collected on income tax related to dividends, amounting to a total of €7.68 million.
The largest share of tax revenue – €9.4 million – was received from companies operating in the field of information and communication, followed by professional, scientific and technical activities with €4.85 million, and placing third with €3.19 million, administrative and support service activities.
As at the end of June, altogether 3,262 Estonian residents were employed by companies run by e-residents, which is 1,194 more than a year ago. New job openings are primarily created by companies whose operations include office management, coding and consulting sectors.
“This year, we will celebrate eight years since the launch of the e-residency programme. During this time, companies set up by e-residents have become more mature, employing more people, and taking out dividends. For Estonia, their success means increasing tax revenue,” Lauri Haav, the managing director of the programme, said in a statement, adding that this growth is expected to continue as an increasing number of e-residents are finding their way to entrepreneurship.
Interest among residents of Ukraine and Spain remains high
According to Haav, despite growing tax receipts, the impact of the war in Ukraine, and the general economic uncertainty is reflected quite clearly in the dwindling numbers of applications for e-residency, and new companies established by e-residents. During the first six months of 2022, e-resident’s digital ID was issued to 5,408 people, and e-residents established 2,198 new Estonian companies, which is, respectively, 12% and 4% less than in the first half of 2021.
“This decline was expected, especially considering that Estonia has suspended granting e-resident status to Russian and Belarusian citizens,” Haav noted, adding that Ukrainian citizens remain entrepreneurially active, and their share among the local e-resident community continues to grow despite these uncertain times, with 415 Ukrainians granted e-resident status during the past six months.
Spain – one of the programme’s three target countries – has made a big leap forward, rising to the top in the rankings among both new e-residents, and new companies established, an increase of 30% and 25%, respectively, compared with the previous year.
Estonia’s e-residency programme was launched at the end of 2014 with the aim of providing foreign citizens secure access to Estonia’s public e-services. Since the programme was launched, more than 94,000 e-residents have established more than 22,000 new companies in Estonia.
In 2021, the e-residency programme generated €35.2 million of direct economic revenue, whereas the total costs related to the programme amounted to €5.76 million.