Carmen Raal, digital transformation adviser to the Estonian Government, says: “We’re not a tax haven, but something we can say quite proudly is that we are an administrative haven.”
Ms Särav agrees that while the tax regime is undoubtedly attractive, the main pull for businesses is in fact convenience.
The e-residency program trumpeted at London Tech Week is a prime example. It allows founders to easily take advantage of the country’s low-tax regime and gain access to the EU’s single market.
For Estonia, the program represents efforts to attract the next generation of tech unicorns, while officials also hope some applicants will choose to become full residents, helping to tackle the country’s aging population.
With more than 100,000 people enrolled, if all the founders who had taken advantage of the scheme were actually based in Estonia they would together form Estonia’s second-largest city.
Digital capabilities have allowed the country to cut red tape more broadly. From next year, Estonia will allow citizens to get married and divorced online, taking the proportion of government services available online to 100pc.
More than 99pc of financial transactions in Estonia are completed digitally, while citizens have been issued electronic ID cards since 2002.
Estonia’s digital efficiency dates back to its independence in 1991 following the collapse of the Soviet Union, when enterprising leaders decided to put the internet at the heart of the newfound democracy.
Kristjan Vilosius, founder and chief executive of software firm Katana, says: “With only limited bureaucracy and no legacy system in place, it was possible to set up a platform for growth that was flexible, digital and allowed businesses to boom.”
It was also born out of necessity. The country has a population of just 1.3m, compared to 6m in similarly-sized Denmark. This makes public services more expensive per person, fueling the need for efficiency.
Kristjan Korjus, co-founder of tech firm Pactum, says: “Being a tiny country has made our tax system very transparent and simple – we simply don’t have enough people to make it complicated.”
He adds: “Having no natural resources and being tech-savvy, it was a natural choice to move towards technology.”
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