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August 3rd, 2018 at 11:33 am

One of Estonia’s first “e-residents” explains what it means to have digital citizenship

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An online community survey recently asked me where I’m based. Without hesitation, I answered “Estonia.” You might ask: as a US citizen, why in the world did I do that? But as crazy as it may sound, Estonia is the country to which I feel most loyal today. I am one of the country’s first “e-Residents,” and I feel more welcome there than pretty much anywhere else in the world.

Hold on: an e-what?

I’m an Estonian e-Resident. A virtual resident, sort of. Let me explain.

In 2014, Estonia, a country previously known as much for its national singing revolution as anything else, became the first country in the world to launch an e-Residency program. Once admitted, e-Residents can conduct business worldwide as if they were from Estonia, which is a member of the EU. They are given government-issued digital IDs, can open Estonian bank and securities accounts, form and register Estonian companies, and have a front-row seat as nascent concepts of digital and virtual citizenship evolve. There is no requirement to have a physical presence in Estonia.

Like me, e-Residents are often “digital nomads” who work in a variety of locations. They include not only freelancers, independent, and remote workers, but also investors, CEOs, and even prime ministers. Japanese prime minister Shinto Abe was the first; more recently Emmanuel Macron has joined the e-Resident ranks.

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The idea is to make it easier for individuals and organizations to transact across borders, and to help them build and lead business seamlessly, efficiently, and from anywhere in the world. This is part of Estonia’s moonshot goal of creating “a new digital nation for global citizens,” a world in which outdated barriers to entry are eliminated and there are freer flows of talent, ideas, and resources. Estonia proffers technology, transparency, and a trusted operating environment (as well as leading-edge cybersecurity expertise and deep understanding of today’s political realities).

Estonia wants to be a role model and leader for a different way of seeing the world: a world that is more open, meritocratic and reflective of the demands—and opportunities—of the 21st century.

Three years in, what I find most incredible about e-Residency is that it actually works.

Estonia’s quest to become a “digital nation”

To better understand how e-Residency came about, let’s go back almost 30 years, to 1991. Estonia had just won independence from the Soviet Union and was in the early stages of building a market-oriented economy from scratch. At the time, leaders were quick to identify the potential of the internet and open source collaboration tools (interestingly this was less out of principle, and more for the simple reason that they had no money to pay for Microsoft Office). They decided to become the world’s premier “digital nation.” A favorite quote I’ve heard in Estonia: “What do you think of when you hear the word Slovenia? Nothing. Precisely! We don’t want to be Slovenia.”

Fast forward a couple of decades, and this scrappy little country of 1.3 million people is well on its way to achieving this goal. Estonia has quietly pioneered a range of initiatives, from becoming one of the world’s first “paperless governments” to establishing e-Estonia, an overarching digital infrastructure that underpins its entire digital strategy. E-Residency itself is partly the brainchild of Kaspar Korjus, who spearheaded the initial concept while he was at university and is now the program’s managing director (The idea was also envisioned by Ruth Annus of the ministry of the interior prior to Korjus). He had an internship with the government focused on new paths for Estonia to grow its community and economy, where he started exploring the idea that became e-Residency.

E-Residency was appealing to me for several reasons (none of which include dodging the law, taxes, or other civic responsibilities). I have Finnish heritage and for many years was intrigued by Finland’s “smaller neighbor.” And, I’d just joined an Estonian startup as an advisor. Becoming an e-Resident would allow me to receive payment from clients in Euros from any company without worrying about currency fluctuations, and to own shares in the company (previously this would have required various administrative work-arounds).

Applying for e-Residency back then was no easy feat. It could only be done in Estonia, in person, at a police station, and all of the instructions were in Estonian (today, all of this can be done online). I had to write an essay about why I wanted to become an e-Resident, which reminded me of “what I did over summer holiday” school assignments. But applying was also a delightful experience: Upon seeing my last name, the police officer proudly declared that I must not be Finnish. No, she insisted, I must be Estonian. Given how many residents the US is trying to make feel not American, this felt like a rush of fresh, inspired air.

A few weeks after applying, I received an email informing me that my e-Residency had been approved. Yes! I finagled my way back to Tallinn a couple months later and returned to the same police station to pick it up (from the same officer, who beamed as big as I did). My e-Residency “welcome package” included a digital ID card, card reader plug-in, and several documents with a battery of passwords and instructions. There was a password for signing documents digitally, another password for identification, backup passwords and all the rest. Although it was among the most sophisticated offerings I’d ever seen, I was kindly informed that “this [technology] is quite old for Estonia, but we’ve been told it’s pretty new for the rest of the world.” I’ll say.

Life as a digital resident

At a basic level, e-Residency makes working overall simpler and, ideally, more streamlined. This plays out in many ways, depending on the type of worker or organization. For example, many bona fide small- and mid-sized companies in other regions simply could not get access to European markets. The costs of entry and other requirements made it prohibitively cumbersome. E-Residency gives them a new avenue to do this; they still have to prove their merits, but the playing field is more level. (No surprise that Estonia has continued to rise on the World Bank’s “ease of doing business” index, currently ranked 12th overall and first for tax competitiveness.)

For independent entrepreneurs, especially those working in different countries, Estonia makes the entire process of establishing and maintaining a small business easier, faster and more affordable. In my case, I’m able to transact, bank, and sign documents easily. I still maintain my US presence—because a non-trivial amount of my portfolio is in the US, and I maintain a range of local commitments and community—but many of my fellow e-Residents have shifted their entire enterprise to Estonia.

Moreover, I have fallen in love with Estonia and would like to spend more time there. Tallinn is a sort of 21st century Renaissance city: minutes from the fairytale castles and cobblestones in the Old Town is the bustling neighborhood of Kalamaja, full of Soviet-era industrial buildings now being renovated into lofts and co-working spaces. (Speaking of property, e-Residents cannot purchase real estate unless they have proof of sufficient income from Estonian sources. Foreign income is of no help.) The youthful, entrepreneurial vibe is infectious. It’s as though the entire country sees itself as a prototype and is united in building a better national UX (user experience).

It’s far from perfect: multiple times I had to disable firewalls to get digital services to work, and the e-Residency team discovered a potential bug in late 2017 which led them to deactivate all ID cards until they could be updated through the internet. These experiences left me feeling vulnerable, though far less than the Equifax breach, and the Estonian government was extremely fast and thorough in their follow-up.

But for me, the experience of being an e-Resident has been useful beyond measure: it has enabled me to re-think not only how I work, but also the many ways in which the world of work itself is changing and emerging opportunities for the future.

A model for a more open world

So far, there is no real e-Resident “community” outside of Tallinn (though there’s a new app for this), nor has it made a dent in systemic issues like inequality and equity. Partly this is due to the fact that e-Residency is still young, the team is small, and they have a list a mile long of suggested improvements and stretch goals. Nonetheless, I am convinced that Estonia is on the right track in opening itself up to new forms of “membership” that are both domestic and global. They see where the world is heading and, rather than close themselves off, see greater connection as the key to prosperity — for themselves as well as anyone else who shares this view.

The e-Estonia team hosts hundreds of foreign governments and private-sector associations annually, which has already led to new collaborations, such as the world’s first digital embassy in Luxembourg (basically, e-Estonia’s data is backed up on a server there) as well as unexpected wrinkles from Brexit, when there was a marked uptick in UK startups re-incorporating in Estonia. There is also a new “digital nomad visa” in the works which would position on Estonia at the forefront of (primarily tech) worker mobility. Moving forward I expect they will focus relatively more on cultivating enterprise (versus individual) e-Residents, but nonetheless they will be well-placed to harness the shifts that the future of work portends.

My e-Residency is not a passport. It’s more than a tourist visa, and far less than citizenship. It offers new windows of opportunity and a refreshing mindset. As some countries, most notably the US, seek to close their borders, Estonia seeks to build bridges. The world needs more bridges—among people, places, and the future.

Via Quartz 

 

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