Through the same platform, non-Estonians can also apply for e-Residency. This grants holders the right to start a business in ‘electronic Estonia’ and secure an internationally recognised online ID that enables individuals to transact, sign agreements virtually and other services needed to start and run a business
“As a nation, we aspire to be like an app,” explains Mats Kuuskemaa, Head of Business Strategy, e-Residency. “For about 50 years, we had a lot of unwanted bureaucracy from the Soviet Union that we didn't sign up for.
“We had a different kind of break with the Soviet Union, compared to a lot of countries, because almost everyone was sacked in Estonia when the whole civil service was let go.”
In the 1990s, Estonia’s plans for building its government from scratch took inspiration from Silicon Valley rather than Whitehall or Washington.
“We tried to get things done very fast,” admits Kuuskemaa. “We let the whole communist system and its heavy industry go. We wanted to create the right environment for investment and a strong legal system. And it worked.”
During Kuuskemaa’s school years (1995 to 2007), Estonia’s economy grew at a tick a little below 8% a year. It was during this time that a deal to fix the creaking Soviet phone line to Finland was mooted, which then prompted a more profound change in infrastructure. Why lay a new cable when there was an opportunity for Estonia’s infrastructure to leapfrog more developed nations?
“The government was really eager to try out new ideas, and everything flowing out of Silicon Valley. So in 2000, we introduced a national ID card. This was very similar to the e-Residency card we have now with a smart chip, which they started to add services to.”
First, it was a population registry and then it was medical records; today, 350 interconnected databases are linked to the chip. The key early principle was to get the cards into people’s hands and to add services over time.
If this sounds a little 1984, Estonians certainly didn’t feel that way.
“We didn't really know what was going to come out of it. We thought that maybe the card was going to be used for safe digital identification; we didn’t know it would become so popular for business. What we learned by opening it up to everyone through the e-Residency scheme is that people apply for it to start and run a company online. We thought there would be other, possibly easier, ways of launching a startup, especially among European entrepreneurs, but to our surprise, even among Europeans, it's been very popular.”