The lady mentioned in My 3+1 helper in the next period post also has a husband. That day, when I was finding the next steps for self-improvement, he also gave me a thought worth considering. This was the Estonian e-Residency.
I became a Hungarian Digital Citizen in December, it’s time to expand my palette. I feel like preparing for a new life is all about saving, just think of the many bank accounts I already have.
One of my tasks today was to look into exactly how to become a citizen of another country. But before that, I thought it would be worth clarifying exactly what the benefits are.
What is the benefit of Estonian digital citizenship?
Estonian digital citizenship is particularly popular with digital nomads for the following reasons:
1. Ease of starting a business
- E-residency (digital citizenship) allows you to quickly and easily start a business online, even when you are not in the country.
- The Estonian business environment is favorable, transparent and built on modern technological solutions.
- Taxation is transparent and favorable, especially for reinvested profits (undistributed profits are tax-free).
2. 100% digital administration
- With Estonian digital citizenship, all company administration processes (e.g. taxation, invoicing, administration) can be completed completely online, which is ideal for digital nomads who are constantly on the go.
- You do not need to be physically present in Estonia either for starting a company or for day-to-day administration.
3. International business opportunities
- An Estonian business operates fully legally in the European Union, giving you access to the EU single market.
This can be attractive to digital nomads with a global customer base.
4. Account management and banking
- With e-residency, you can open a business bank account digitally or use Estonian fintech services (e.g. Wise, Revolut) that facilitate international transactions.
5. Tax benefits
- The Estonian tax system is simple: profits are only taxed when you take them out of the company. This is favorable for those who would like to reinvest their earnings.
6. Access to modern digital infrastructure
- Estonia is one of the most advanced digital countries: fast internet, e-signature, e-government services that make life and business convenient and efficient.
7. Support for a flexible lifestyle
- For digital nomads, it is important to be independent of a specific location. Estonian digital citizenship gives you the opportunity to run your business from anywhere, where there is internet.
8. Join a global community
- E-residency is also an international community: digital nomads, freelancers and entrepreneurs from all over the world have already joined.
- The Estonian e-residency program has been used by over 100,000 people since its launch in 2014, so you can be part of a solid and supportive community.
9. Low entry threshold
- Applying for the e-residency program is simple and relatively inexpensive, and you can receive the card by post once your application has been reviewed.
10. Innovative country image
- Estonia is at the forefront of digital development, and the program is backed by a stable, technologically advanced and progressive government, which inspires confidence among digital nomads and entrepreneurs.
Quite a few advantages have been formulated. The Estonian model was launched in 2014, which means it has a ten-year advantage over the Hungarian system. DÁP is still in its very early stages, and many new features are promised for 2025. For example, selfie identification, QR code login and electronic signature at market service providers, vehicle sales. The last would be interesting to me too, if they didn’t promise it for the last quarter of 2025, because then I wouldn’t have to start selling my car at the beginning of March.
When I read these advantages, I was still committed to the fact that I needed this membership.
Then I started looking for an image for this post and stumbled upon this page:
The Ultimate Guide to Estonian E-residency, Banking, and Taxes – Nomad Gate
The Ultimate Guide to Estonian E-residency, Banking, and Taxes – Nomad Gate
Nomad Gate is my travel guide to living a nomadic lifestyle – at least that’s what the site claims. I kind of agreed with that right away, because the site offers the following: Life hacks, finances, guides and community for digital nomads, perpetual travelers, remote workers and location-independents. (I should note that I immediately joined the membership.)
The link above gives a very thorough English summary of how the registration process works, how to open an Estonian bank account, how to open a business and last but not least, why an intermediary company is needed to keep things running smoothly.
I will only highlight two important points from it.
But first of all, there are a lot of misconceptions surrounding the e-residency. Let’s just get a few of the glaringly obvious ones out of the way right now.
What the Estonian e-residency is not:
- IT IS NOT an actual residency. It does not give you any rights to stay in Estonia, the EU or the Schengen zone whatsoever. Nor any other social rights in Estonia or anywhere else.
- IT IS NOT a way to avoid paying tax in your actual country of residence.
- IT IS NOT a citizenship, and you will never receive any consular support from the Estonian government for holding an e-residency.
- IT IS NOT a travel document. It is not a picture ID. It can not be used as a form for identification in the “real world.”
Reasons to bank in Estonia
Here are just a few reasons for why you might want to bank in Estonia:
- You live there or spend a significant amount of time there
- You have friends, family, or customers there
- You want a euro account or a multi-currency account (which many Estonian banks offer)
- You want to diversify your assets as part of an internationalization strategy
- You want access to modern banking that you can manage from anywhere
- You want to place (some of) your assets in a country where the government isn’t consistently running huge budget deficits
- You want to do your banking in English, Estonian or Russian
- You want to incorporate a business in Estonia, for example to access the EU market
- You have an e-residency card and want to use it for something.
Brokerage company
The procedure requires some preparation, work and, last but not least, the registration fee, which was increased from EUR 50 to EUR 150 at the beginning of the year. Then comes the question of whether an Estonian address will be required to open an Estonian business, the accounting of the Estonian business must be done, so an intermediary will be required.
It is obviously worth doing the registration process with them, so the fee can be up to EUR 350 in an instant. The intermediary recommended by Nomad Gate performs all these activities for EUR 59 per month.
At this point, I had to think about whether there was a real reason to get involved in this!
The summary also addressed tax issues with great care. And here, not for the first time, the question arose in my mind whether it was possible to embark on a trip around the world as a Hungarian citizen, with a Hungarian sole proprietorship, but without a reliable accounting team behind me that could provide adequate support for foreign issues.
Conclusion
So today – for now – I gave up my Estonian digital citizenship, but I called an old friend about future collaboration.