Estonia allows its businesses to use European bank accounts when registering share capital

The Estonian parliament on 5 December passed an amendment to the country’s Commercial Code to allow businesses registered in Estonia to use bank accounts in any European Economic Area country when registering share capital.

The amendment removes the requirement that limited companies must use an Estonian bank account when registering share capital. From January 2019, they can instead use a “credit or payment institution in the European Economic Area” for this, the Estonian e-residency team said in a blog post.

“This change means that all limited Estonian companies can conduct all their business activity using any business account for their company from across the Europe Economic Area for the first time,” the e-residency team added.

According to Kaspar Korjus, the managing director at e-residency, there is never one banking solution that suits every company or is available to every company, whether it is run by a citizen, a resident or an e-resident.

The change takes effect in January 2019

“That’s why the most important way to improve business banking for Estonian companies is to provide greater freedom of choice. This amendment to the Commercial Code will help more people around the world benefit from e-residency and unlock greater investment into Estonia, while preserving the trusted nature of our business environment,” Korjus said.

The Estonian Commercial Code includes a requirement for limited companies to register a minimum share capital of €2,500, which can be deferred for up to ten years from the company’s founding. During this time, the company can use business banking either inside or outside of Estonia. However, when they are ready to register share capital though, the previous Commercial Code stated that only an Estonian credit institution could be used. This effectively compels Estonian companies to open an Estonian bank account at some point, regardless of whether they want it or ever use it for anything else.

The revised Commercial Code, which takes effect from January 2019, will instead state that share capital must be registered using “a credit or payment institution in the European Economic Area (EEA)”, which includes all EU countries plus Iceland, Liechtenstein and Norway.

This not only expands the countries where the banking providers can be based, but also the types of banking providers offering these business accounts. A “credit institution” is a bank, but a “payment institution” covers many financial technology companies too, the e-residency team explained.

Non-residents benefit the most

“The change to the Commercial Code will benefit all Estonian limited companies that want to take advantage of this greater freedom in business banking, whether they are run by citizens, residents or e-residents. However, non-residents (which includes e-residents) have the most difficulty obtaining an Estonian bank account for a combination of reasons. For a start, Estonian banks still choose to verify their clients in person so a visit to Estonia is required, which can mean quite a large investment of time and money depending on where they are in the world.

“In addition, banks have more complex risk considerations due to the nature of their business models and so, for understandable reasons, are not able to serve the broad spectrum of non-residents whose companies would make a positive contribution to our country.”

“This change will have a significant effect on improving the e-residency programme and helping more people around the world benefit from it, while unlocking foreign investment into Estonia,” the e-residency team added.


The cover image is illustrative.

Microsoft founder Bill Gates becomes an Estonian e-resident

Microsoft founder and former CEO Bill Gates has become an e-resident of Estonia after having received the digital ID-card as an early birthday present from the Estonian prime minister, Jüri Ratas.

Gates, an entrepreneur and a philanthropist, received the e-resident’s ID-card during a meeting in Brussels, Belgium, where he and Ratas discussed how Estonia’s experience as a digital nation can benefit more people and countries in the world.

Almost all e-residents apply online themselves, but Gates is one of the few people to have received e-residency as a gift – along with world leaders such as the German chancellor, Angela Merkel, the Japanese prime minister, Shinzō Abe, and, most recently, Pope Francis.

During their meeting, Gates and Ratas also discussed three African projects of the Bill and Melinda Gates Foundation that concern clinical trials of vaccination, enhancing laboratory services and improving the health-care system.

Estonia opened the e-residency programme for everyone in December 2014. E-residents get a state-issued, secure digital identify that allows digital authentication and the digital signing of documents. There are now almost 38,000 e-residents from 157 countries around the world.

E-residency gives access to Estonia’s digital infrastructure and public e-services so that the approved e-residents can establish and manage an EU company and enjoy the same rights in business as Estonians. It does not provide citizenship, physical residency or tax residency.

Gates, alongside with Paul Allen, launched Microsoft in 1975, to see it become the world’s largest PC software company. He served as the CEO of the company until 2014, after which he and his wife, Melinda, have pursued a number of philanthropic endeavours. As of 6 August 2018, Gates had a net worth of USD95.4 billion, making him the second-richest person in the world, behind Jeff Bezos, the founder and CEO of Amazon.


Cover: Bill Gates’s e-residency card (images courtesy of the Estonian government office).

Estonia’s e-residency 2.0: Making it beneficial for everyone

Estonia’s e-residency programme is going through a period of change as Estonians from across the public and private sector work together to develop an initiative called e-residency 2.0.

This article is commercial content.

Estonian president Kersti Kaljulaid recently said that a small country like Estonia has only one natural resource and it is located between our ears; the only question is, how wisely will the country and its people use it?

In the past 20 years, Estonia has introduced several digital solutions – they have made life easier for the population and saved time and money, too. But challenge number two for the country is – how to export its digital solutions abroad and make Estonia and its people wealthier in the process. Or, in other words, how to make money from the natural resource between our ears.

Creating wealth

The Estonian e-residency programme is one of the digital solutions that was born thanks to this natural resource and the ideas of several Estonians and their foreign acquaintances. In 2014, Estonia became the first country to offer e-residency by enabling anyone to apply for an Estonian government-backed digital ID card, which provides access to our e-services. Since then, 45,000 people from 150 countries have become e-residents.

The e-residents have already created 4,500 new companies in Estonia and, according to an economic impact analysis by Deloitte conducted in 2017, have contributed €14.4 million to the Estonian state and economy so far. This comes from e-residents paying direct taxation in Estonia, conducting business with other Estonian companies, investing in Estonia or simply travelling here for a mixture of business and pleasure.

The e-residency programme has attracted a lot of attention around the world, including the global media outlets. E-residency has also become one of the most frequently googled Estonian brands. Hence, it has been a form of free advertisement for Estonia, and therefore it is indirectly benefitting its residents.

How everyone can benefit

However, the perspective of Estonians across the country and the wider involvement of e-residents in Estonian society has so far been rarely explored. For this reason, the programme is going through a period of change as Estonians from across the public and private sector work together to develop an initiative called e-residency 2.0.

The goal of e-residency 2.0 is to build on what has already been developed for e-residents and decide the future direction of the programme so that both Estonians and e-residents can be given even more opportunities to benefit. Since the summer of 2018, the e-residency team has conducted detailed interviews in Estonia with a vast range of Estonians about the programme’s impact and future possibilities.

Estonians who work directly with e-residents – such as entrepreneurs and accountants who provide services – already see the economic value of the e-residency programme. The question now is how more people across Estonia – from Valga to Võru and from Saaremaa to Sillamäe – can see the benefits.

More direct connections with e-residents

The other question is about how e-residents fit into the broader community of Estonia, as well as how the supervision of e-residents, the management of their risks and the application process itself can be enhanced. E-residency 2.0 has set a goal to explore what should be the rules for how e-residents engage with Estonia.

According to the interviews conducted by the e-residency team, Estonians would like to see more direct connections with e-residents that are mutually beneficial. To meet this expectation, the e-residency programme is developing a new community platform that will help e-residents and Estonians by providing them with more tools to grow their companies and more opportunities to network with each other.

Many Estonians also believe that e-residents should have more opportunities beyond business to be culturally part of Estonia – another long-term challenge for e-residency 2.0

This autumn, the e-residency team is meeting many more people in Estonia – including several public meetings, the first of which is taking place in Tartu, at the SPARK Hub on 12 October at 17:00-18:30. These meetings will give people the opportunity to provide their feedback before the e-residency team is ready to finalise its ambitious 2.0 programme by the end of the year.


Cover: E-residency kit.

Pope Francis becomes an Estonian e-resident

Pope Francis, the leader of the Catholic Church and the sovereign of the Vatican city state, became an e-resident of Estonia during his visit to the country.

Francis was presented with his own digital ID card by the Estonian president, Kersti Kaljulaid, during pope’s visit to Tallinn on 25 September.

Pope Francis is not the first high-profile world leader to become an e-resident. Previously, the Japanese prime minister, Shinzō Abe, and the German chancellor, Angela Merkel, have been given the Estonian e-residency.

Estonia opened the e-residency programme for everyone in December 2014. E-residents get a state-issued, secure digital identify that allows digital authentication and the digital signing of documents. There are now almost 38,000 e-residents from 157 countries around the world.

E-residency gives access to Estonia’s digital infrastructure and public e-services so that the approved e-residents can establish and manage an EU company and enjoy the same rights in business as Estonians. It does not provide citizenship, physical residency or tax residency.

Pope Francis is the second pope to ever visit Estonia, the first being John Paul II, who visited Estonia in 1993. The Vatican recognised the Republic of Estonia in 1921 and it never recognised the Soviet occupation of the country.


Cover: Pope Francis presented with his own digital e-residency ID card by Estonian president, Kersti Kaljulaid, in Tallinn (photo by Mattias Tammet/Office of the President). Read also: Ten facts about pope Francis who is visiting Estonia.

A company founded by Finnish e-resident employs hundreds of food couriers in Estonia

The food delivery app, Wolt, has grown fast since the Finnish e-resident, Miki Kuusi, set up its Baltic HQ in Tallinn – becoming the largest e-resident-founded company in Estonia.

Two years ago, Kuusi, a co-founder behind a number of Finnish startups and initiatives – including the largest annual tech and startup conference in the region, Slush – established a new Estonian company, Wolt, without leaving his desk in Helsinki, Finland’s capital. Using his Estonian-issued digital ID card – a standard for the country’s e-residents – it didn’t take long to set up a new company.

Founded in Helsinki in 2014, Wolt is an online food ordering and delivery service that takes orders via a mobile app. Kuusi came up with the idea while visiting Silicon Valley and taking an Uber for the first time. He wondered why his food couldn’t be delivered in the same way, so he returned to Finland and founded the company with five friends who shared his vision. It has since expanded to over 20 cities and delivers food from over 1,400 restaurants.


As an early adopter of new ideas, Kuusi was already an e-resident by the time Wolt’s office was established in Estonia. To move fast, another Finn, Henna Mäkinen, became an e-resident to manage the Estonian company after it was founded – even before they had a physical office.

They have since grown to a team of ten and their Tallinn office operates as the Baltic headquarters, managing more than 1,600 couriers who serve 250,000 customers across Estonia, Latvia and Lithuania. The Baltic team is now also overseeing food deliveries in Tartu, Riga, Vilnius, Kaunas and Klaipeda. And as it stands, Wolt has broken the e-residency record for most employees in Estonia by paying the social taxes for more than 700 local couriers using their platform.

“E-residency and e-services make our lives so much easier,” Liis Ristal, Wolt’s Baltic general manager, said. “It means we can all have digital signatures that are respected by both government and our partners so all our administration and communication for the Estonian company is online. In contrast, other countries, in which we’ve registered the company, sometimes require us to show up in person or comply with more complicated rules.”

According to Ristal, Wolt’s drivers range from 16-year-olds saving up for a new iPhone to grandmothers who take breaks from knitting to earn extra income.

What is e-residency?

Estonia opened the e-residency programme for everyone in December 2014. E-residents get a state-issued, secure digital identify that allows digital authentication and the digital signing of documents.

E-residency gives access to Estonia’s digital infrastructure and public e-services so that the approved e-residents can establish and manage an EU company and enjoy the same rights in business as Estonians. It does not provide citizenship, physical residency or tax residency.

So far, over 5,000 new Estonian companies have been established by e-residents around the world – ranging from small freelance businesses to startup teams.


Cover: A Wolt courier in Tallinn, Estonia (images courtesy of Wolt).

London’s Victoria and Albert Museum puts the Estonian e-residency card on display

The Victoria and Albert Museum, one of the leading art and design museums in the world, has put the Estonian e-residency card on display in its latest exhibition.

“The Future Starts Here” is a new exhibition at the museum in London that challenges visitors to consider how cutting-edge technology will shape our everyday lives. It is open until  4 November 2018.

The exhibition is home to more than 100 objects that are shaping the future – from smart appliances to satellites and drones, including projects from Facebook, Apple and Google. Many of them have never been seen by the public before.

The e-residency card was donated by Martin John Callanan, a British artist who specialises in the research of an individual’s place within systems.

Alternative ideas for improving public services

The card is within a section that challenges visitors to consider if democracy still works before being shown projects with new strategies for collective decision-making and alternative ideas for improving public services. The card is in the same display case as a Brexit ballot paper, which was chosen due to the influence of technology on the referendum, the Estonian e-residency team said in a statement.

There are currently 1,901 e-residents from the UK.

Estonia opened the e-residency programme for everyone in December 2014. E-residents get a state-issued, secure digital identify that allows digital authentication and the digital signing of documents.

E-residency gives access to Estonia’s digital infrastructure and public e-services so that the approved e-residents can establish and manage an EU company and enjoy the same rights in business as Estonians. It does not provide citizenship, physical residency or tax residency.


Cover: An Estonian e-residency card (images courtesy of the e-residency programme).

Estonia opens an e-residency centre in Seoul

Estonia has opened an e-residency collection centre in Seoul, South Korea, that will help Korean entrepreneurs more easily enter the EU market without leaving the country.

The centre was opened by the Estonian president, Kersti Kaljulaid, who’s visiting the country. As part of her visit, the two countries also agreed on new trade and technology links.

If the e-residency centre project is successful, the project can be expanded to more locations around the world where there’s a demand for e-residency, but difficulty reaching an existing pick-up location.

Kaljulaid also agreed on a memorandum of understanding to promote inter-regional cooperation in technology and business between the Estonia and Gyeonggi Province, which is home to Pangyo Techno Valley.

Enhancing cooperation

The agreement includes co-operation to connect entrepreneurs, develop blockchain technology and provide opportunities for IT personnel from Gyeonggi to work in Estonia.

Kaljulaid also met with her South Korean counterpart, Moon Jae-in, and the two presidents agreed to enhance bilateral cooperation between Estonia and South Korea in various areas, including cyber defence and fostering startup businesses.

Entrepreneurs in Gyeonggi will now be encouraged to enter the European market through e-residency, while Estonian and e-resident entrepreneurs will be encouraged to enter the Asian market with the help of Gyeonggi. In addition, the private sector in Estonia and Gyeonggi will be encouraged to conduct exchanges.

Estonia opened the e-residency programme for everyone in December 2014. E-residents get a state-issued, secure digital identify that allows digital authentication and the digital signing of documents.

E-residency gives access to Estonia’s digital infrastructure and public e-services so that the approved e-residents can establish and manage an EU company and enjoy the same rights in business as Estonians. It does not provide citizenship, physical residency or tax residency.


Cover: President Kaljulaid’s delegation visiting South Korea (images courtesy of e-residency team).

Three ways how estcoin could benefit Estonians and its e-residents

What would happen if Estonia decided to launch its own crypto tokens through an initial coin offering (or an ICO)?

The Estonian e-residency programme began a discussion over the summer in 2017 for an idea that we nicknamed “estcoin”. Since then, the subject has generated an enormous amount of attention, including both supportive feedback and criticism, in every part of the world.

We raised the idea because e-residency is considered to be a government startup – so we are continuously improving it based on the feedback of e-residents and always look to the private sector for best practises that we should be using.

ICOs are a new phenomenon that are transforming the growth of startups. Instead of giving up shares, many startups are now raising finance by issuing their own blockchain-based crypto tokens to investors around the world.

Raising finance is only half the story of ICOs, though. People who invest in crypto tokens issued by a startup are then strongly incentivised to support the development of that startup in other ways too – and they tend to form an online community.

Estcoins to support the development of digital nation

From Estonia’s perspective, estcoins were proposed as a way to raise money and support for the development of our digital nation from more people around the world. We would also want to structure the tokens so that they help build our e-resident community and incentivise our own key objective, which is to increase the number of companies started in Estonia through e-residency.

This activity already has a major positive impact on Estonia as e-residents bring a significant amount of business to the Estonian economy. An independent report released in December by Deloitte revealed that e-residents had already brought €14.4 million back to Estonia in the first three years and this is predicted to rise to €1.8 billion by 2025, which is a return of €100 for every €1 invested in the programme. We will only achieve this though if we continue to provide real value to our e-residents around the world.

We now want to go even further and not just launch our own ICO, but also make e-residency the best option globally for companies to launch their own trusted ICOs.

After the estcoin proposal was published, I organised a kick-off meeting inside the Estonian parliament involving representatives from across Estonia’s public and private sector, as well as key crypto entrepreneurs and “hackers” from around the world. It was attended by members of the e-residency programme team, our advisory committee, Estonia’s ministry of finance, Estonian parliamentarians, the Bank of Estonia, companies conducting ICOs and law firms advising them.

Together, we began the enormous task of understanding how Estonia could better embrace blockchain and the use of crypto tokens in a way that supports legitimate entrepreneurs and helps grow our digital nation, while protecting our public interest and minimising risks to our state and business environment.

We sought to learn from the best practises developed in other countries, but also explore how Estonia’s unique advantages can take us further. Since then, we have continued to work closely together and are constantly exploring solutions and exchanging ideas.

Boom or bust?

As the ICO phenomenon continues to grow, there will be particular nations that become “havens” for companies launching them. The reality is that a large proportion of ICOs simply won’t have the standards we desire.

In addition, the value of crypto tokens in general are extremely volatile right now, so the rapid gains we are currently witnessing by Bitcoin and others could easily be followed by rapid devaluations soon. Many analysts have pointed out similarities between the booming crypto market today and the booming dotcom market of the 90s, which eventually did burst. However, the fundamental technology behind it — the internet in that case — did go on to change the world and open vast new possibilities so the same thing could happen to crypto, even if it’s also a bubble about to burst.

What people are looking for, in any eventuality, is real value through greater trust. Trust is also the most important value behind e-residency though because we are offering a secure government-backed digital identity that provides access to our open and transparent business environment. That’s why we will focus on attracting trusted ICOs.

So how can we better support trusted ICOs through e-residency?

The first thing we can do is relatively straightforward: we can provide clearer guidance on how to legally and responsibly launch an ICO within our regulatory environment.

Many e-residents already use the programme for investment purposes, but our longer-term objective is to create an economy of scale for both investors and entrepreneurs to use our platform together.

We now have the opportunity to cut out the middlemen of central stock registries with a combination of blockchain, crypto tokens and secure digital identities. This would provide truly decentralised and trusted peer-to-peer securities trading globally through e-residency.

How will estcoin work?

As part of these discussions across the public and private sector, we have also examined how Estonia’s own crypto token could function, considering the feedback that we have received globally.

We have identified not one, but three variants of estcoin that would benefit both our digital nation and those who use them.

1. The community estcoin

Community estcoins would be a mechanism to accelerate the growth of our digital nation by increasing the value of joining our e-resident community and rewarding those who help us build it.

There are currently an enormous number of e-residents who already volunteer their help to grow our digital nation in different ways, such as by producing content about their experiences or encouraging others to sign up, but it’s been a challenge to understand how we can reward them as well as provide support.

In addition, one of the most valuable activities that e-residents do to grow the value of the programme is to conduct business with each other, as well as Estonians. This means that e-residency is not just access to valuable services, but also access to an increasingly valuable community of like-minded people who can help you grow your company too.

Fortunately, we are already developing a community platform, so we want to ensure then that estcoins could have a real utility value within that platform and that they could be automatically issued in exchange for activities that support the community.

For example, e-residents should be able to earn estcoins if they drive web traffic to e-residency, successfully sign up a new e-resident, post a tender within our community that provides work to another e-resident or Estonian company, or spend time providing useful advice to other e-residents.

Estcoins will enable that platform to grow faster through a network effect, but it’s possible that any funds raised could also be allocated to further develop this platform, as well as provide investment into companies that operate within Estonia’s business environment.

2. The identity estcoin

At the heart of Estonia’s digital nation — and our e-residency programme — is a secure, government-issued digital identity. What would happen if we also starting using blockchain technology to tokenise identities?

In this model, estcoins would be the blockchain-based tokens used for activities within our digital society, such as digitally signing documents, logging into services or enforcing smart contracts.

Here’s where these estcoins differ sharply from the previous model. Identity estcoins cannot be exchanged or sold because they are part of your identity.

Identity estcoins would eliminate some of the technology that is currently required to operate our digital nation and that would also eliminate much of the costs and hassle that this technology brings.

3. The euro estcoin

We’ve discussed models for estcoin that either increase or decrease in value, but what if we introduced estcoins and simply pegged their value to the euro? That’s how euro estcoins would work.

We would never provide an alternative currency to the euro, but it’s possible that we could combine some of the decentralised advantages of crypto with the stability and trust of fiat currency and then limit its use within the e-resident community.

Banks would be required to move money in and out of euro estcoins, but transactions could then take place independently of them through the blockchain. This means that community-based value exchanges could take place globally for free. All that is required is a digital wallet and the commitment of government to buy back every euro estcoin for one euro.

Our e-residents are world citizens and the ability to conduct business globally with greater ease is one of the main drivers behind the growth of the programme. Euro estcoins within the e-resident community could facilitate this exchange of value globally, while encouraging more business among e-residents and Estonians.


The opinions in this article are those of the author. This is a condensed version of Kaspar Korjus’ article, which was originally published on the e-residency blog. Cover image by Peter Kentie.

Estonian e-residency now includes payment processing for new companies

The Estonian e-residency now includes a solution that helps new businesses, created via the e-residency programme, also accept payments.

The new service is called “Passport” and it was launched on 14 August by the international payments company, Paymentwall, in collaboration with the e-residency programme.

The e-residency programme said in a statement that the purpose of the new service is to help entrepreneurs from around the world to digitally establish and manage an EU company, empowered with global payment solutions. The programme itself already enables entrepreneurs from around the world to open and run a global EU company fully online.

“Now with Passport, the process of setting up an EU company and connecting the payment processing solutions becomes even easier,” Oleg Gutsol, the head of global growth at e-residency, said. “Passport is especially useful for entrepreneurs in countries like Ukraine, Turkey, India and others, where we already see strong growth, primarily because the global payment solutions are not as readily available.”

Passport is meant to create a global network of companies to help founders find a working space, get localisation services, access business banking, register a company in Estonia, and start accepting payments – all in one platform.

Paymentwall is a global payments platform that allows five billion people to make payments using not only credit cards but also 150 local payment options all over the world.


Cover: An Estonian e-residency card.

Estonia’s e-residency enables setting up remote companies and their banking

Estonia’s e-residency programme has finally started to allow companies and their bank accounts to be established entirely online from anywhere in the world.

After two and half years in the making, Estonia’s e-residency programme announced on 25 May that the new services, for which many e-residents have patiently waited for already some time, are finally about to be introduced.

Launched in 2014, the e-residency programme enables anyone to apply to become a digital resident of Estonia, and then register a European Union company. The programme announced in November last year that the companies established by the e-residents can be managed online, including its bank account – thus eliminating the need for e-residents to travel to Estonia in order to access business banking. Although the legal hurdles were removed when the new legislation permitted remote banking, in practice it didn’t become reality, due to lacklustre domestic support by Estonia-based banks.

To solve this issue, the e-residency programme has now partnered with a Finnish fintech company, Holvi, that provides digital money management tools that are connected to its business current (checking) account. By partnering with the e-residency programme, Holvi will be able to serve more location-independent entrepreneurs around the world.

The partnership means a complete EU company combined with a fully digital EU IBAN business account can be established anywhere with an internet connection for the first time through e-residency.

Coinciding with the launch of a new website

The e-residency programme director, Kaspar Korjus, said in a blog post that this could help unlock global growth by democratising access to entrepreneurship.

“This partnership with Holvi will further lower the barriers to entrepreneurship and help expand e-residency to many more people around the world who have been unable until now to establish a trusted company with the tools needed to conduct business globally,” Korjus said.

In preparation for the expansion of the programme, e-residency has also launched a new website to encourage more people to join the digital nation.

Estonia opened the e-residency programme up for everyone in December 2014. E-residents get a state-issued, secure digital identify that allows digital authentication and the digital signing of documents.


Images courtesy of Estonia’s e-residency programme.

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