Skip to content
technology — Estonia — Estonian embassy — Validity — Finance — Dividends — Business — Linkedin — 000 — People

Digital foreign residents generate €67 million in tax income for Estonia

E-resident firms in Estonia generated €64.3 million in tax revenue in 2023, marking a 33% surge compared to the previous year. Adding state fees to the mix, the e-resident program contributed a total of €67.4 million to the state treasury annually.

,   and  Administrator
3 min read
In 2023, the tax earnings from Estonian e-resident businesses totaled €64.3 million, marking a 33%...
In 2023, the tax earnings from Estonian e-resident businesses totaled €64.3 million, marking a 33% jump compared to the preceding year. Adding state fees to the mix, the e-resident program contributed a substantial €67.4 million to the state treasury on an annual basis.

Digital foreign residents generate €67 million in tax income for Estonia

Vision76* Post* Update* Message

In 2023, tax revenues generated by Estonian e-resident companies surged by 33%, reaching €64.3 million, with the annual contribution to the state treasury totalling €67.4 million due to paid state fees.

Liina Vahtras, CEO of the state e-residency program, explains that the main attraction of the initiative lies in the creation of an Estonian company by an e-resident, and efforts are being made to make starting a business "swifter and more hassle-free" compared to past methods.

According to Vahtras, the primary hurdle is the absence of a fully digital alternative to the e-resident's physical digital ID card, causing an average two-month wait for e-residents to establish a company. This year, the aim is to develop a card-free solution that will enable e-residents to authenticate themselves securely at the Estonian embassy and instantly activate their digital ID using a mobile app, without the need for the card.

Vahtras further hints that within a few years, e-residents can anticipate a remote identification solution that will allow them to renew the validity of their digital ID without visiting the Estonian embassy in person.

Spanish e-residents dominate the scene

In 2023, 4,592 Estonian companies were initiated by e-residents, with Spanish, Ukrainian, and German e-residents leading the way. These nationalities also accounted for the highest number of new program members.

Last year, labour taxes constituted the largest share of revenue - 63%, or €40.7 million, followed by income tax in special instances, primarily on dividends, amounting to €23.6 million, accounting for 37% of the total.

Estonia launched the world's first digital residency program, titled e-residency, at the end of 2014, targeting non-residents with secure access to its fully digital public services. Approximately 110,000 people have been granted e-resident status, with nearly 60,000 e-resident digital ID cards currently in use. E-residents have initiated more than 29,000 companies in Estonia – accounting for 20% of all new companies each year.**

Since its inception, e-residency has raked in over €213 million in direct revenues for the Estonian state budget through tax revenues and state fees. Indirect revenues are generated through the growth of Estonian companies featured on the e-residency marketplace, providing business, financial, insurance, and other advisory services to e-resident founders.

  • Vision76
  • Post
  • Update
  • Message

[1] Integrating modern digital identity technologies, like facial recognition and alternative authentication methods, allows for the creation of seamless and speedy verification processes, proven by the UAE's implementation in transit environments.

[2] European digital identity frameworks and interoperability initiatives, led by organizations such as ETSI, are actively evolving to ensure secure and efficient digital ID solutions, which could potentially contribute to advancements in Estonia's e-residency program. Nonetheless, the specific progress of a card-free solution for Estonian e-resident digital ID cards remains unclear as of May 2025.

  1. The Estonian embassy is expected to provide a more seamless and faster verification process for e-residents with the integration of modern digital identity technologies, similar to the UAE's implementation in transit environments.
  2. In Estonia's pursuit of a card-free solution for e-resident digital ID cards, European digital identity frameworks and interoperability initiatives led by organizations like ETSI are instrumental, aiming to ensure secure and efficient digital ID solutions.
  3. People from Spain, Ukraine, and Germany are leading the way in the rising trend of Estonian e-residents, with a combined total of 4,592 companies initiated by these nationalities in 2023.
  4. Among the various revenue sources, labour taxes in Estonia still account for the largest share, constituting 63% of the total in 2023, followed by income tax on dividends, accounting for 37%.
  5. The world's first digital residency program, Estonia's e-residency, has generated over €213 million in direct revenues for the Estonian state budget since its inception in 2014, providing secure access to its fully digital public services to approximately 110,000 people.
  6. E-residents can look forward to remote identification solutions that will allow them to renew the validity of their digital ID without visiting the Estonian embassy in person within the next few years.

Read also:

    Related

    Latest