E-residents contribute a record 125 million euros to state revenue

TALLINN - The year 2025 was a record-breaking one for the e-Residency program. E-residents established 5,556 companies last year, a 15 percent year-on-year increase. Direct revenue to the state from e-residents and the companies they founded reached nearly 125 million euros, marking a staggering 87 percent annual growth.

In 2025, the total economic impact of the e-Residency program on the state was 124.9 million euros. This amount comprised 54.5 million euros in labor taxes, 66 million euros in other taxes, mainly on dividends, and 4.3 million euros from state fees for e-Residency applications and company registrations. Within their first year of operation, 17 percent of these companies paid nearly 7 million euros in taxes.

According to Minister of Economy and Industry Erkki Keldo, the continued success of e-Residency shows that Estonia has made the right choices in developing its business environment. "Every euro invested in e-Residency brought us back over 12 euros last year - this is a clear signal that investing in digital services works. E-Residency, combined with a business-friendly tax system, provides entrepreneurs with a simple and modern way to do business globally while helping to grow the Estonian economy," Keldo said. "In larger European countries, entrepreneurs are stifled by bureaucracy, which is why they are looking for countries where business can be conducted quickly and cost-effectively. This is the main reason why the number of new e-residents is setting new records," he added.

Estonia gained 13,828 new e-residents last year, a 20 percent increase from the previous year and the best result in the last six years. Most e-Residency applications in 2025 came from Germany, with 1,122 (a 49 percent increase), followed by France (1,016 applications, a 56 percent increase) and Ukraine (921 applications, a five percent increase). Other emerging markets for e-Residency, based on application numbers, include Italy (713 applications, a 33 percent increase), the United Kingdom (526 applications, a 41 percent increase), and Latin America (482 applications, a 35 percent increase). E-residents established 5,556 new Estonian companies, surpassing the 2024 record by 15 percent. The largest number of new companies were founded by e-residents from Ukraine, Spain, Turkey, Germany, and France.

According to Liina Vahtras, Head of the e-Residency program and board member of the Estonian Business and Innovation Agency, the focus of e-Residency is very specific: to bring more companies, economic activity, and tax revenue to Estonia. This is also at the core of the program's updated strategy for 2026-2029. "Today, the biggest obstacle to the development of e-Residency is the slow and cumbersome process associated with the plastic card. The easier and faster a foreigner can establish a company in Estonia, the faster they will start generating revenue here. Our analysis shows that a cardless, fully mobile-based e-Residency would increase company formations by at least 20 percent and bring an additional 3-9 million euros in tax revenue to the state each year," said Vahtras. "The demand for fast and cost-effective entrepreneurship is growing worldwide, and our goal is to make e-Residency as simple as possible, so that in the near future, a smartphone will be all that is needed to start a company," she added.

To achieve a card-free system, Vahtras said two clear steps need to be taken this year and next: "First, a mobile app capable of capturing biometrics needs to be developed, which is already in progress under a procurement contract. Second, a legislative amendment is necessary to allow the issuance of e-Residency to transition to biometric identity verification based on the applicant's travel document - the draft bill is in development."

The e-Residency program was created in late 2014 to offer foreign citizens secure access to Estonia's public e-services. To date, more than 135,000 people from 185 countries have become e-residents. Approximately 50 percent of e-residents are from European Union countries. Currently, there are over 63,000 active e-resident digital ID cards, which are valid for five years. E-residents establish one in every five new Estonian companies each year. Throughout its history, e-residents have created over 39,000 Estonian companies. The cumulative economic impact of e-Residency has been nearly 400 million euros. Additionally, e-resident entrepreneurs spend over 15 million euros in Estonia annually on services from local businesses. The total cost of the e-Residency program across all state institutions in 2025 was 10 million euros. The e-Residency program is managed by the Estonian Business and Innovation Agency.

The program's economic impact is measured using a state-approved model that considers labor taxes and income tax on specific cases (mainly dividends) paid by the Estonian companies of e-residents. An e-resident company is defined as an Estonian company where the e-resident's role was established at the time of founding or within 90 days thereof, and the foreign national's e-Residency status must have been obtained before the company was created.

The e-Residency program's continuation strategy for 2026-2029.