Trust is a critical factor when choosing a business location, and it's also a core value of e-⁠Residency. Here are four ways Estonia offers a trustworthy base to start and run your business.

In today's interconnected world, freelancers, solopreneurs, startup founders, and tech professionals can leverage the benefits of digital arbitrage when choosing a business location. They have a menu of countries to choose from where to start a company, even if they never intend to take up residence. Such decisions often rely on a digital residency or virtual presence. When choosing a solution, a critical factor is whether it has a trustworthy business environment.

Estonia was the first to offer e-⁠Residency. But this is not the only reason so many global entrepreneurs choose to start a company in this EU-based Baltic state. Thanks to its digital innovation, transparent business environment and secure data handling, trust is a key factor in the decisions of e-⁠resident entrepreneurs who choose Estonia.

Earlier this year, e-⁠Residency introduced its core vision and values to the world. These propositions not only reflect its commitment to e-⁠residents, but also differentiate e-⁠Residency from competitor e-⁠residency programmes or business jurisdictions. This article will take you in-depth into the core value of 'trust', which is:

Since it was launched in 2014, e-⁠Residency has been designed to meet the needs of the world’s entrepreneurs. It’s backed by the Estonian government, using a secure digital ID, like the one all Estonian citizens have to access 99% of their government services online, 24/7. It means you can have complete confidence in doing business, in a country that’s transparent and in the EU.

Of the other values, we covered 'ease' on the blog earlier this year. Stay tuned for 'opportunity' and 'community' soon!

1. Take confidence from operating in an EU-based, transparent business environment

Part of the EU and eurozone

Estonia has been a part of the European Union (EU) since 2004 and the eurozone since 2011. Free trade among members was one of the founding principles of the EU, and it has enabled an inclusive, peaceful and progressive trading environment since its post-war formation. 

By becoming an e-⁠resident, and registering your company in Estonia, you will have an official EU business, no matter where you live. Regardless of your citizenship and residency, your company will have access to the European Economic Area (EEA), the world's largest trading bloc and single market.

Having an EU-based company also gives your company a boost in the eyes of clients and investors in Europe, and will allow you to reach new customers if you don't already have a European client base. Furthermore the euro is the second global reserve currency, and a stable unit of account for international exchange.

E-resident Nevena Sofranic is a perpetual traveller and founder of Recrooit, a referral platform for employers to find and hire qualified candidates. When she found out about e-⁠Residency, she immediately saw that it would be a perfect solution for her business plans:

A transparent, reliable environment to run a business

Some international entrepreneurs seek out tax havens and business registration options specifically to obscure their activities, and distance themselves from scrutiny where they actually live. 

In contrast, those who choose Estonia send a clear signal to future collaborators and clients. Estonia provides a safe and stable business environment, in terms of low corruption, openness, security and justice. This is indicated by its rank of 9th out of 140 jurisdictions in the World Justice Project’s 2022 Rule of Law index.

Estonia's fiscal policies and simple tax system also reflect this trustworthiness. Estonia is not a tax haven; instead the country has one of the highest levels of tax transparency and simplicity in the world. Citizens place high trust in the system driven by their clear understanding of how tax revenues are used. 

The business culture in Estonia is remarkably transparent - with all the registration data about Estonian companies being published in a publicly available dashboard. Transparency International ranked it number 14 out of the 180 countries it evaluated in its 2022 Corruption Perception Index, tied with Canada and Iceland.

2. Get ahead in the world’s most digital country

Digital services, by design

Estonia's reputation as a digital pioneer is well-earned. Estonia is among the top ranked countries in the UN's 2022 E-Government Survey and leads the EU in Digital Public Service delivery.

The compact nation has a long history of digitalisation, resulting in a unique 100% digital infrastructure including state-of-art government services. It was built by contributions from a forward-thinking government, a proactive IT sector, and a tech savvy population.

From the moment their birth is registered online in the e-population database, Estonians live and breathe this digital environment. Estonia has virtually all digital state and private services available remotely, and all of its public services are digital, interconnected, and stackable.  

Whether it's the flexible startup ecosystem or the innovative e-⁠Residency model, Estonia's approach to digitisation has been adopted as a model by governments around the world.

E-⁠resident systems engineer Philippe Rixhon cites Estonia's IT startup ecosystem and digital infrastructure as key factors in his decision to incorporate Valunode here.

The world’s most digital country

Since it was launched in 2014, the e-⁠Residency model has been copied by other countries, including Lithuania, Ukraine, Portugal, Dubai and more. So far, most have not fully rolled out their digital residency programmes and none have reached the same volume of users.

Estonian policy leaders and agencies have advised more than 60 other governments around the world that wish to adopt its innovation model for their own journey towards a supportive digital ecosystem.

Estonia is not resting on its digital laurels. The country is now rolling out a proactive digital service model. In the future, the needs of citizens and e-⁠residents will be preempted by automated service alerts and AI virtual assistants.

3. e-⁠Residency is based on a secure digital identity

Your unique and secure digital identity

E-⁠Residency is built around a secure digital ID that offers the same unrestricted access to all Estonian state and private digital services as Estonian citizens enjoy. 

With their digital IDs, e-⁠residents can encrypt sensitive information or private documents and send them digitally to protect their integrity and confidentiality.

The only difference between an Estonian citizen’s and e-⁠resident’s digital ID is that the latter is not a travel document and cannot be used for applying for visa, residency or citizenship nor for i-voting in Estonia.

The application process for e-⁠Residency involves personal vetting by the Estonian Police and Border Guard, who scrutinise each applicant for financial regularity and criminal activity, before they are allowed to become an e-⁠resident and form a business in Estonia. Plus, the process of actually picking up the digital identity card requires face-to-face authentication and biometrics, making it unique and personal.

This means that when you do business with fellow e-⁠residents, you can have the trust and confidence that every one of those 100,000+ individuals has passed a rigorous round of due diligence even before you do your own.

E-resident and e-Residency Envoy Martin Nørgaard Gregersen from sign.online is a seasoned entrepreneur and accustomed to collaborating globally. 

For Martin, ensuring new business partners are Estonian e-⁠residents not only facilitates the signing and contracting his latest business is built around, he explained,

Your digital signature is more secure and efficient than a written signature

Estonia’s digital infrastructure supports Qualified Electronic Signatures, the highest ‘trust level’ of digital signature according to European laws. Estonian digital signature is essentially incomparable with using other platforms (such as Adobe or DocuSign) as it is light-years ahead in terms of security and efficiency. 

It’s the reason Estonia continued essential business as usual during the pandemic lockdowns as well - digital signatures are simply more efficient than written squiggles on pieces of dead tree, in 2023.

It is based on Keyless Signature infrastructure (KSI) developed over 20 years ago. This means that the system has been rigorously tested over decades and proven to be extremely secure. This blockchain-based infrastructure in combination with an innovative legal framework has ensured unparalleled data integrity for every citizen and e-⁠resident.

South Korean e-⁠resident Gi H. Nam, founder of Sportties OÜ notes some benefits of being able to use digital signatures:

Indeed, a high security e-⁠resident digital ID supports time-stamped Qualified Electronic Signatures. You can sign legal contracts and confirm transactions with the same legal standing as handwritten signatures. You can run your businesses in the safest way possible, speed up administrative processes, and save time and paperwork.

4. Safe and secure storage of your data

Have confidence in world-class security infrastructure

Estonia's commitment to data security is world-class. Estonia’s e-government infrastructure is built upon decentralised databases, which communicate across the X Road. This is an open-source software and ecosystem solution that provides secure exchange between individuals, private sector and public sector entities interacting with it.

This system is powerful and interoperable, ensuring high data integrity and business continuity even in the event of a cyberattack. It has been designed specifically to integrate the vast datasets and searches that are required for effective digital governance, which is why more than 20 countries around the world are implementing this Estonian-grown solution. 

Estonia itself is at the cutting edge of cybersecurity, with NATO’s own cyber-defence capability being headquartered in Tallinn. Thriving for years in the shadows of powerful neighbours and learning from every cyberattack and penetration attempt, Estonia has also developed world-leading digital resilience and continuity, through a unique ‘data embassy’ project in which the entire country is effectively backed-up offline.

Own and control access to your personal data

Under Estonian law, each individual owns their own personal data. E-⁠residents and citizens alike have complete control over their data and its usage, with a record of every access and transaction.

Whenever someone accesses your data, it is always with your permission and leaves a time stamp that is trackable. In fact, all inquiries and transactions in Estonian public and private online systems are time stamped and stored via blockchain technology. The country has been using these technologies for over a decade to protect its citizens’ data from tampering and misuse.

Each individual only has to share a piece of information with the government database once, after which it is accessible (to the holder of the relevant verified credentials) as needed.

Along with your e-⁠resident digital ID you get a personal identification number and the possibility to access all the personal data and government communications via Estonia’s state portal.  While key information about your business is public, your personal data always remains yours, secure, and private.

Final thoughts

As you plan for the future of your business, consider the benefits of basing your operations in Estonia: a country committed to making business smooth, secure, and trustworthy.

Estonia's strong alignment with the EU, its transparent business environment, advanced digital landscape, and emphasis on secure data handling make it the ideal base for your business to form, grow, and engage with the world.