In 2025, Estonia’s e-Residency programme recorded its strongest financial performance to date, generating nearly €125 million in direct state revenue. The figure represents an 87% year-on-year increase and reflects record levels of company formation, tax contributions, and international demand for Estonia’s digital business infrastructure.
During the year, e-residents established 5,556 new Estonian companies, a 15% increase compared with 2024. Combined, these businesses and their founders contributed €124.9 million in economic impact to the state.
Of the total, €54.5 million came from labour taxes, €66 million from income tax in special cases — primarily dividend distributions — and €4.3 million from state fees related to e-Residency applications and company formation. Companies in their first year of operation, representing 17% of all e-resident businesses, still paid almost €7 million in taxes.
Erkki Keldo, Estonia’s Minister of Economic Affairs and Communications, said the results underlined the effectiveness of the country’s digital-first approach. “Every euro invested in e-Residency brought more than 12 euros back to Estonia last year — this is a clear signal that investing in digital services works,” Keldo said.
He added that entrepreneurs were increasingly seeking alternatives to more complex administrative systems elsewhere in Europe. “Entrepreneurs face stifling bureaucracy in larger European countries, which is why they are looking for countries where it’s possible to get things done quickly and inexpensively. That’s the main reason why the addition of new e-residents has set new records,” Keldo said.
Estonia granted e-Residency to 13,828 new applicants in 2025, a 20% increase year on year and the strongest intake in six years. Germany led applications with 1,122 new e-residents, followed by France with 1,016 and Ukraine with 921. Italy, the United Kingdom, and Latin America also emerged as fast-growing source markets.
The geographical spread was reflected in company formation, with the largest number of new Estonian companies founded by e-residents holding Ukrainian, Spanish, Turkish, German, and French citizenship. Overall, e-residents now account for one in every five new companies established in Estonia each year.
Liina Vahtras, Managing Director of the e-Residency Programme and a member of the management board at Enterprise Estonia, said future growth would depend on removing remaining administrative friction. “Today, the biggest obstacle to the development of e-Residency is the slow and cumbersome process associated with using a physical plastic card,” Vahtras said.
According to Enterprise Estonia’s analysis, moving to a fully mobile, card-free e-Residency system could increase company formation by at least 20% and generate an additional €3–9 million in annual tax revenue. The transition would enable entrepreneurs to establish and manage Estonian companies using biometric identity verification via smartphone.
Vahtras said two steps were required to achieve this: the development of a mobile application enabling biometric data capture, currently underway through public procurement, and legislative amendments to allow remote identity verification based on travel documents.
Since its launch in late 2014, Estonia’s e-Residency programme has issued digital IDs to more than 135,000 people from 185 countries, excluding revoked statuses. Around half of all e-residents come from EU member states, with more than 63,000 active digital ID cards currently in circulation.
To date, e-residents have founded more than 39,000 Estonian companies, contributing a cumulative economic impact of almost €400 million. Public expenditure on the programme totalled €10 million in 2025, while e-resident entrepreneurs also spend more than €15 million annually on local business services.
The programme’s economic impact is calculated using a government-approved model that factors in labour taxes and special income taxes paid by e-resident companies, including those where an e-resident assumed a founding or executive role within 90 days of incorporation.
For more information, visit https://www.e-resident.gov.ee.
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