The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Abhishek Shringi, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur
The brand new entrepreneurship spirit in India is challenging the conventional wisdom and rewriting the rules for the next generation of entrepreneurs, entertainers, educators and more. They are a passionate and formidable bunch and the goal is nothing short of breaking the status quo and transforming the world.
In a recent event a small country in Northern Europe, including more than 1,500 islands, the Republic of Estonia has launched an e-residency programme for India, a digital identity, available to anyone in India interested in operating a location-independent business online.
What is e-residency?
It is a virtual residency in which the program gives the e-Resident a smart card which he/she can use to sign documents and complete all public and private formalities related to company online. But, e-Residency is not related to citizenship and does not give the right to enter or reside in Estonia.
Benefits and limitations of e-Residency
E-residents will have their financial footprint monitored digitally, in a manner stated to be transparent. Residents pay tax in their home countries, which provide them with the everyday services they use and not Estonia.
e-Residency allows: company registration, document signing, encrypted document exchange, online banking, tax declaration, fulfillment of medical prescriptions. Other services become available as the scheme is expanded. A smart card issued by the Estonian Police and Border Guard Board in Estonia or at an embassy is used for access to services.
How will this affect Indian Start-ups?
India stands ranks third globally with over 4200 startups and growing at a rapid pace with a projection of over 11500 startups by year 2020. The fast growing world of entrepreneurship and their success in India has led several countries to focus some part of their economy on the Indian market and its potential to generate revenue for their country.
When the world is moving fast from being local to global and now Glocal (Globally Local) this programme, which is available to any business, startup or freelancer based in India, will help E-residents to establish an Estonian company online within a day, administer the company from anywhere in the world, manage accounting records and declare Estonian taxes online, digitally sign and transmit documents and contracts, have access to international payment service providers and conduct e-banking and remote money transfer, all this from India. Thereby not only helping Indian companies to expand and compete globally but also in reducing the cost of trading across the globe. This will also help local firms by being an entry door for Europe and maximize the benefits of the EU Single Market’s harmonized rules, further helping them to showcase their talent, resulting in increase in credit rating, market share, revenue and profit for the companies as well as both the countries.