Estonia: e-Residency passes 120,000 members

We do not publish a number of Estonian e-residents: we have not found an up-to-date official statistic to document it, and we do not repeat the figure that circulates in commercial publications.

The methodological point matters more than the value. A counter of e-residencies issued adds up digital identities, a significant share of which have never been used to set up a company, and another share of which correspond to structures since dissolved.

It therefore measures neither the economic activity created, nor the number of people who have settled in Estonia, nor the number of active companies. Three different quantities, which presentations regularly confuse.

This bias is not specific to Estonia: it is found in the communications of every scheme designed to attract newcomers, where the number of permits or identities issued stands in for a measure of success.

The official portal of the Republic of Estonia is explicit: e-Residency confers no right of residence, no tax residency and no travel document. It is a digital identity giving access to online services.

Its real use is to allow a non-European entrepreneur, or a European but mobile one, to own a company in the European Union that is administered entirely remotely, with very light formalities.

For a French national, this benefit is slimmer than it appears: freedom of movement already allows them to set up a company in any member state, so Estonia offers them only administrative convenience, not access.

The real Estonian argument is tax deferral: undistributed profit is not taxed, at a rate of 0%¹, and tax is only due on distribution, at about 22%² of the gross amount.

This mechanism benefits a growing business that reinvests its earnings, and brings nothing to an activity that distributes all of its profit every year. This is the criterion that should guide the decision, not the number of people signed up to the scheme.

The scheme's success has fuelled a market of intermediaries offering turnkey structures to entrepreneurs who remain in their country of residence. That is where the risk lies.

An Estonian company whose decisions are taken from France may be taxed there on the basis of its place of effective management. Registration protects against nothing; it is the facts that determine where tax is due.

The director then faces a twofold problem: a tax reassessment in France on the company's profits, and Estonian reporting obligations they will have complied with for nothing.

1. Do not confuse the digital identity with a residence permit or tax residency.
2. Be honest about where the company is effectively managed: it is the only criterion that counts.
3. Reserve the Estonian structure for cases where the business is genuinely run from Estonia, or from nowhere in particular.
4. Cost the full price of a salary, including the 33%³ social tax.
5. Handle the departure from France according to its own criteria if a genuine move is being considered.

Estonia has raised its taxes several times: income tax rose from 20%⁴ in 2024 to 22%⁵ in 2026, and the reduced rate on regular distributions has been abolished.

This upward trend is set against a budgetary context shaped by the defence effort undertaken since the invasion of Ukraine. There is no sign that it is over, and a long-term plan must take it into account.

Tax deferral, on the other hand, has not been called into question and has been the cornerstone of the Estonian model since 2000. It is more structural than a rate, and therefore more lasting.

For a French entrepreneur, the practical conclusion is to judge Estonia on this mechanism and on the quality of its digital administration, not on a sign-up counter that says nothing about what it claims to measure.