In 2014, Estonia launched a unique program to help non-EU entrepreneurs gain access to global markets. Based on the most recent data, Ukrainians are among the major users of it.
Oleg Gutsol, a Ukrainian-born Canadian and former Head of Global Growth for the e-Residency program, said, “Ukraine was the first country that we focused on.” While the overall target was “digital nomads”, there have been a wide variety of companies registering. “Import-export companies (for example selling honey), buying and selling cars, trading crypto currency, IT consulting firms, etc.,” according to Gutsol.
Early on, there was no active marketing of Estonian e-Residency to Ukrainians. They found out about it by word-of-mouth and social media. When Gutsol came on board in May 2017, he started an event series that toured major cities in Ukraine.
“I took part in events in Kyiv, Lviv and Dnipro and later in 2017 Ukraine country manager Alexey Voronkov went to other cities like Odessa,” said Gutsol. The purpose of the events was to familiarize Ukrainians with the benefits of e-Residency.
What are the key benefits of the program for Ukrainian entrepreneurs? Gutsol emphasizes it is access to global markets and ease of doing business without having a physical presence in Estonia. The use of international payments systems for business, not readily available in Ukraine, is an important part of this. Early in the program there were issues for non-residents of Estonia establishing local bank accounts. This was solved using companies with FinTech banking solutions like the Finnish provider Holvi. Ukrainians can now accomplish everything online including establishing a bank account.
Alexey Voronkov is currently the country manager for Ukraine. He shared some statistics about the program as of January 30, 2018:
- The current total number of applicants is 32,590.
- The top three countries by applicant are: Finland, 3,586; Russia, 2,081; Ukraine, 1,886.
- The current total number of applicants who have incorporated companies is 2,969.
- Top three countries for incorporating companies are: Ukraine, 372; Finland, 300; Russia, 269.
There are applicants from a total of 155 countries. The rate of Ukrainian companies incorporating is the fastest growing for all countries (the statistics are available here). They are usually updated weekly, but there has been a lag of a few weeks after the Christmas and New Year’s holidays.
“The program does not allow you to travel to Estonia or other European countries or give you residency in Estonia or a tax I.D.”, said Voronkov. He points out that e-Residency does provide a digital I.D. card that can be used to conduct legal transactions online like signing documents and registering a corporation within Estonia’s legal framework.
For example, it helps Ukrainian software developers who have global clients to obtain funds through regular international payment systems like PayPal, which is not now available in Ukraine.
In terms of the future, Voronkov hopes that Estonian e-Residency can help facilitate ICOs. He also mentioned that the program is considering launching an “estcoin,” or crypto utility token, with specific benefits for its users.
In the future, Voronkov says there will be other “country-as-a-service” programs worldwide and mentioned that both Croatia and Azerbaijan are considering offering their own e-residency options.
You can listen to a Jan. 2018 interview with Alexey Voronkov on the monthly podcast “Made in Ukraine Tech Startup Edition.”