On Tuesday, June 23, British citizens voted to leave the EU, on the basis of 51.9 percent of the referendum vote. Markets panicked and the pound tumbled.
With many Britons applying for Irish passports to hang on to their EU citizenship, the e-residency team in Estonia responded quickly. It created and started promoting the webpage howtostayin.eu, where it had gathered together all the information about Estonian e-residency.
According to e-residency project head Kaspar Korjus, the webpage was visited by over 8,000 people in the first few days alone. In the first week of July the project received 51 applications from the UK. That one week accounted for about a quarter of all the applications from Britons this year.
"After the Brexit referendum, we certainly have seen a rise in interest from the UK. The applicants have pointed out mainly the softer reasons for it, such as uncertainty regarding the future, the decrease of credibility in the eyes of investors, customers' concerns regarding payments and services," Korjus says.
"According to the statistics, most British companies wanted to stay in the EU, and we're happy to provide support to entrepreneurs in these complicated times."
According to Korjus, the main motivations for applicants are business continuity, and peace of mind deriving from the knowledge that, whatever happens, all EU activities can be continued without moving to another country. Entrepreneurs have also mentioned that the risks with the pound's fluctuations can be lessened by operating in euros.
"Furthermore, there are some entrepreneurs who want to keep the opportunity to 'passport' new fintech services through Estonia to Europe, meaning that when they have the license for the service in one member state, they don't have to apply for it in other member states," Korjus says.
The concept of Estonian e-residency emerged two years ago as a transnational digital identity, available to anyone in the world interested in administering a location-independent business online.
Applicants for e-residency are fingerprinted and background-checked by the Estonian state. Once approved, the new e-resident is issued an electronic ID card which, in combination with a four-digit pin, can be used for secure digital identification.
E-resident entrepreneurs and freelancers can open and run location-independent businesses online, apply for a bank account and conduct e-banking, get access to international payment service providers, declare taxes, sign all relevant documents and contracts remotely with the same legal status as handwritten ones, and gain easier access to EU markets.
At the same time e-residency does not confer citizenship, tax residency, residence or right of entry to Estonia or to the EU.
In the beginning of August, Estonian e-residency had altogether 12,480 applicants, with 568, or a little less than five percent from the UK.
Korjus believes that the interest will grow in time, especially when the Brexit processes approach their final stages.
"It all depends on what specific decisions and agreements are made as to the results of the referendum. Today there are still a lot of loose ends. We believe that e-residency will become the main tool for the British to continue their businesses in the EU. It's wise for an international company to keep at least one body in the EU, and Estonian e-residency is the cheapest and most convenient way to do it," he says.
Other countries could potentially gain significantly from Brexit. For example, Ireland, which has already lured many international companies into establishing their European headquarters through lower corporate taxes, will be the only English-speaking member state in the EU after the UK.
However, Korjus believes that Estonia provides many advantages to entrepreneurs and companies that Ireland doesn't.
"Our main advantage is that the entrepreneur can live wherever he wants to when using e-residency as the administration of the company takes place through digital identity, using the ID-card," he says.
"Also, Estonia's tax system is very transparent. Our corporate tax rate is 20 percent and it's only paid when the profit is distributed, so you don't have to pay taxes on reinvested profits."