Estonia e-residency: A Complete Guide

Digital nomad working your way around the world? Entrepreneur setting up a business? Freelancer or contractor working in the EU?

Even if you’ve never heard of Estonia before, you’ll want to know more about how to become an Estonian e-Resident. That’s because you can apply online to get your digital ID as an e-Resident, set up an EU based business, and manage your company from anywhere in the world. If that sounds like a dream, read on for all you could ever need to know about Estonian e-Residency.

Applying for e-Residency is pretty cheap and easy - but why would you want to?

While e-Residents hail from all over the world, the most common reason to sign up is to be able to open an EU based business no matter where you happen to be.

This is how it works. When you’re accepted as an Estonian e-Resident you’ll get a digital ID document you can use to prove your identity and sign documents. With this you can establish a company in Estonia entirely online. This brings a number of benefits - your business will be based in the EU giving access to the EU single market, Estonia has a stable and trusted business environment, and your company can operate paperlessly from anywhere.

You can register as an e-Resident without any support from a lawyer or other professional, which makes the process simple and cheap. All you need to pay is a state fee as follows:

100 EUR if you will collect your e-Residency kit in Estonia
120 EUR if you collect your kit at the office of a foreign representative of Estonia

If you then decide to open a business using your new digital ID, there are a few more costs, but they’re pretty low compared to the price of setting up a business in many countries. Fees to consider when starting a business include:

You may need an Estonian contact person and registered address if you’re not in the country - many providers offer this service for 30 EUR - 150 EUR/month, often with extra services like bookkeeping rolled into the fee
State business registration fee is 190 EUR
You’ll want a business bank account - depending on the provider you prefer, this may come with a fee - we’ll look at some smart online account options in a moment

Becoming an Estonian e-Resident is easier than you might expect. Here’s what you need to do:

Gather all the required documents to support your application - more on that in a moment
Submit your application online and pay your state fees
The Estonian authorities will review your application and do background checks to verify - this can take 3 to 8 weeks
If your application is accepted you can collect your e-Residency pack
Submit your fingerprints when you pick up your e-Residency kit and you’re ready to roll

The only documents you need are a copy of your government issued identity document, a digital passport photo, a statement about why you want to become an e-Resident, and your Visa or Mastercard to make payment. Simple.

Depending on your business, your country of origin and your business banking needs, you may find a suitable business bank account in Estonia based on your digital e-Residency. Each provider can put in place their own eligibility restrictions, which means that not all accounts are open to all e-Residents. However, there’s a handy marketplace page on the e-Residency website which gathers many service providers including banks and account providers, and is fully searchable.

If you’re looking for an account from a traditional bank in Estonia, LHV is popular with e-Residents. However, it’s worth noting that American citizens may not be able to open a business account due to FATCA regulations - check with the bank directly to understand how the rules apply to your personal situation.

It’s good to know that the key requirement when opening your business is to have an EU IBAN number. You can get this from a physical bank in Estonia or elsewhere in the EEA, or a fintech company based in Europe - which means you have options even if LHV won’t work for your circumstances. We’ll cover a few fintech options later to give some inspiration.

Use your e-residency to launch your new EU based business in just a few steps:

Choose your business name - you’ll need to follow local rules for this, which include picking a unique and relevant name written with no special characters in it
Check the classification code for your business activities - you’ll need to find the right code to show what your business does, following the Estonian classification of business activities
Get a legal address and Estonian based contact person - connect with providers on the e-residency marketplace
Register your business online and make or defer your monetary share contribution - registering your business can be done entirely online and requires submitting an application, signing, paying your fee and submitting your documents
Complete your registration and get started - the business formation is usually approved within a day or so