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One of Estonia's first "e-residents" explains what it means
- njarboe 9y ago"Estonia wants to be a role model and leader for a different way of seeing the world: a world that is more open, meritocratic and reflective of the demands—and opportunities—of the 21st century." Meritocratic seems highly promoted in many circles (seems like on first glace a good idea as opposed to say, despotic), but in a meritocratic world, what happens to the dumb and/or lazy (unmeritable?) people.
- lwhalen 9y agoIs it bad if they just fall by the wayside? If one puts forth zero effort, they should get zero reward.
- gervase 9y agoWhat if they exert maximal effort, but achieve zero results?
- whb07 9y agoKind of like any venture where you try as hard as possible and yet fail ? Kind of like an athlete in the olympics who ends up losing by a fraction of a second? Idk, they don’t get the gold right?
- txsh 9y agoSo, in your world, the best software developer gets paid the most (gold), the second best gets paid less (silver), the third best gets paid the least (bronze), and everybody else works as slaves because they're losers.
- pjmorris 9y ago"As you all know, first prize is a Cadillac Eldorado. Anyone wanna see second prize? Second prize is a set of steak knives. Third prize is you're fired." - from Glengarry Glen Ross
- crankylinuxuser 9y agoThere's capitalism in a nutshell. Except first prize was granted by your parents and upbringing. Second prize was partially because of parents and upbringing, but with a bit more luck. And bronze? Yeah, well they're just lazy and bad and they deserve what little they have - cause the Gold and Silver earned what they have.
- fastball 9y agoAnd this goes all the way back to the proverbial Adam and Eve? Don't we then all have the same ancestors and therefore all equal opportunity?
- crankylinuxuser 9y ago1. I didn't bring religion into this. You did. 2. I reject to what amounts to a nice story with no basis in fact. If I remember my judeao-christian studies, the woman was less than the man in those stories. 3. It is evident that even being born, not all babies are equal. And that's before we consider socioeconomic status. Should humans be considered as equal? Of course. However its quite easily demonstrated that people aren't. This is reductio ad absurdio.
- prawn 9y agoI think you can ignore the religious mention and in good-faith (ha!) take their point to be that we ultimately have common ancestors. Then respond that your family has a strong effect but it's not the only one.
- s73v3r_ 9y ago"Don't we then all have the same ancestors and therefore all equal opportunity?" Just about every study done on the subject shows that the family you're born into has a HUGE effect on how successful you'll be in life.
- chipperyman573 9y agoNo, if you could guarantee that only people who contribute nothing would be affected by this, and there would be no edge cases (people with disabilities, etc) Also, "zero effort" is subjective - is playing video games all day zero effort? I would say so, but some Twitch streamers would disagree.
- njarboe 9y ago"fall by the wayside" is a bit hand wavy. Do you mean they become poor, broke, with nothing to loose, ripe for a revolution? Or that they are killed by automated drones when they come over the fence of your/my/our/their gated community?
- lwhalen 9y agoif they were prone to revolution, you'd think "get a danged job" would be the path of least resistance (pun fully intended).
- mathgladiator 9y agoI've been thinking about this with respect to America's future. Basically, suppose people want a revolution. Well, that would require a competent leader to make the mob effective. This is the rub, if you have leadership skills then you make bank and would be in 'the system'.
- ACow_Adonis 9y agoThe implicit assumption here is that American firms actually higher leaders based on some kind of objective leadership skills (and that the market will suck them all up). I'm guessing whoever wrote this hasn't grown up poor/discriminated against, didn't beat their peers and find themselves never-the-less judged/ousted because they "weren't of the right background/proper means/cultural fit". And remember, all it takes is a few key leaders. And that includes those who may have been part of the system but were unjustly ousted...(or those who just think they are getting a wiff of the winds of change and want to be on the right side) /I'm not making any actual prediction of revolution the US incidentally. I'd be inclined against any theories of imminent revolution. Just pointing out that simple theories of "it wouldn't happen here because of our fake-meritocracy" are pretty off the mark.
- mathgladiator 9y agoThere are objective things like 'people follow you' Why are you making assumptions about me? What if leadership isn't about beating your peers, but about using influence to bring people together?
- ACow_Adonis 9y agoIt never ceases to amaze me how most people in capitalist (all) countries continue to work under the folk-belief of a labor theory of value. How much effort you put in has, at best, a second order relation to reward. Far stronger effects are supply, demand, mechanism of action, distribution of initial resources, and social factors.
- ixtli 9y agoIt's pretty shocking. What becomes _infuriating_ is when they say this while also defending their right to own the product of that labor because they were there first or happened to present capital in the right place at the right time.
- jadedhacker 9y agoI thought the idea of a labor theory of value wasn't related to the actual effort you put in, but more that value is related to how much average social labor would be currently invested to acquire or produce something. So if you have a machine you can pull a lever to produce 10 items in 1 second, each of those items acquires 1/10th of a human-second of value. I get though that those other conditions matter more in terms of the actual price though. Marx distinguished between "value", "use-value", and "exchange-value", the latter being price, the second being required for value or exchange value, and the first being used as the basis of comparison between goods. I took it to mean that exchange value is like temperature while value is like heat. Can you elaborate? I'd like to know more about how these different theories interact.
- jadedhacker 9y agoIt sounds like you are not a fan of landlords or am I misunderstanding something.
- mathgladiator 9y agoSetting up a rental is actually a lot of work that is upfront and has a ton of risk. You also need to pay taxes, so it's not based on effort at steady state. Steady state is based on cashflow management.
- jadedhacker 9y agoThis ignores that major developers can absorb a lot of risk and aggregate. It also ignores that foreclosures on ordinary people can be snapped up by banks and developers. It also ignores that tax abatements are very popular and often extremely undeserving. Near where I live, tax abatements are granted regularly and come out of the school budget. If the housing market keeps going up, where's the risk? You'd have to be the dumbest man in NYC real estate to lose money like the president's son-in-law. Small time landlords are a slightly different ballgame, but it's still bizarre that we allow individuals to speculate on where people live and and extract money from the less wealthy in this fashion. EDIT: Also, what other job requires work up-front, but then nearly none? Landlords are famous for terrible upkeep. Even in communities where problems are generally fixed, most of the time, the landlord just collects a check until a problem pops up. They only have to work for rare serious problems and for managing move-in move-out. EDIT2: The craziest thing is that we see that they do this and still collect 25%+ of ordinary people's incomes for an invisible service that is merely holding intellectual property. It's as though people pay to live in a castle keep with no services, pay the local lord, and justify giving 25%+ taxes on top of what you give to the actual democratic government (typically less to much less) because the lord is somehow a great symbol of the economic system.
- refurb 9y agoI'd suggest you do some reading on investing in and managing real estate. It's a lot of work with a lot of risk.
- prawn 9y agoHow do you feel about China's forays into social scoring that limits the choices available to those with indiscretions (unpaid fines, etc). They can't fly, access particular services, etc. If the limitations/rewards vary based on who is in power, I can see that becoming quickly challenging. Internet access could be deemed a reward, for example.
- mpweiher 9y ago> in a meritocratic world, what happens to the dumb and/or lazy? They don't get to run things? Put another way: assuming you're going to have some sort of hierarchy, and you will, how would you want to organize that hierarchy? Merit seems like the least bad way to do so.
- stonogo 9y ago"Merit" is not a quantifiable characteristic. All your plan would do is give the power to the people who define "merit." It's like you're advocating for correctpersonocracy. Put another way, literally every government that has ever existed would call itself a meritocracy. The actual word 'meritocracy' comes from a book that warned about the dangers of creating easily-gamed draconian systems that needlessly exclude people from the process of governing. I wish as many people would read the book as use the word.
- ffreire 9y agoAnd by book you are referring to "The Rise of Meritocracy"? https://en.wikipedia.org/wiki/Meritocracy#Etymology https://en.wikipedia.org/wiki/Meritocracy#Etymology
- tome 9y agoUndoubtedly
- mpweiher 9y ago> "Merit" is not a quantifiable characteristic. It's not? What are SAT scores, school grades, entrance exams for the civil service, election results, income etc.? I would say that these are all ways for society to quantify merit. Did you mean perfectly accurately? > literally every government that has ever existed would call itself a meritocracy. Nope. Most governments used to call themselves monarchies and would have bristled at the idea that they'd have to somehow demonstrate merit to justify their power. Their power was justified by heredity, and in fact, I'd think that if you suggested that they needed to do demonstrate their merit, you might end up short a head. > The book Yep. Have to admit I didn't read it, but I did read what the author wrote: "It is good sense to appoint individual people to jobs on their merit." What he objects to is the following: "It is the opposite [of good] when those who are judged to have merit of a particular kind harden into a new social class without room in it for others." So merit-based selection: good. Ossified class system: bad. I think Trump, May and Johnson are ample evidence that we leave plenty of room for the incompetent to get a chance at the reins, even if we generally try to organize ourselves by merit. And so exactly the fact that we can't quantify merit with perfect accuracy, and have multiple domains, helps us avoid the problems Young mentions, though here as elsewhere we aren't at all perfect.
- mindslight 9y agoOrdering implies nothing about distribution. You could have a system where winner-takes-all, and the second best on down starves. You could also have a system where the upper half is rewarded with 10% more than the lower half. Both of these could be described as meritocratic. Beware of those who use the label of meritocracy to advocate for winner-take-all, as well as those who denounce the concept by equating it to winner-takes-all.
- peatmoss 9y agoMusing here, but would E-stonian residents have any protection / recourse under GDPR?
- chrismeller 9y agoGDPR applies to "EU residents". Unless you also had a residency permit and were residing in Estonia, it wouldn't help.
- smcl 9y agoI signed up and got my ID delivered to my local embassy ... but they never replied when I tried arrange the appointment to pick it up (I got heaps of "your ID is in the embassy!" reminders via email however). Oh well, I'm sure it's useful if you manage to get it. Anyone picking their ID up in Vienna have a different experience?
- AYBABTME 9y agoJust show up.
- skeletal88 9y agoMaybe you don't need an appointment, just go there to get it?
- amaccuish 9y agoYou don't make an appointment, you just turn up during the alloted times.
- polm23 9y agoGiven the date I thought this might be fake, but it seems the program is real: https://en.wikipedia.org/wiki/E-Residency_of_Estonia https://en.wikipedia.org/wiki/E-Residency_of_Estonia That said, the article also claims "Shinto" Abe was the first person to enter the program, but besides mispelling his name I can't find any other reference to him being involved with it at all.
- polm23 9y agoActually I did find this: https://news.err.ee/115597/japanese-prime-minister-becomes-estonian-e-resident https://news.err.ee/115597/japanese-prime-minister-becomes-e... That's surprising.
- pwinnski 9y agoTechnically, it only claimed he was the first prime minister to do so, but the sentence was ambiguous.
- polm23 9y agoAh, you're right - my mistake.
- MPSimmons 9y agoAnyone remeber Cyber-Yugoslavia? http://www.juga.com/ http://www.juga.com/
- kelvin0 9y agoMaybe I'm too cynical, but also looks like a nice way to e-vade taxes?
- craftyguy 9y agoHow so? It explicitly says[0] that is not possible.. 0. https://apply.gov.ee/ https://apply.gov.ee/
- flipp3r 9y agoe-Residency doesn't but you could set up a company in Estonia and I've read that basically all b2b transactions would be untaxed, and simply holding money inside the business would be untaxed (from my interpretation of their website) which would allow you to have a basically tax-free business in the EU which could then forward the cash to some offshore entity in any way you'd like.
- Strom 9y agoSure, that's possible. A pretty similar scheme is possible in pretty much every other EU country as well. In Estonia you can take your sweet time with transferring the money offshore, in other EU countries you have to do it yearly so it looks like you have no profits on the yearly report.
- wemdyjreichert 9y agoCorrection: Japan PMs name is Shinzo Abe (not Shinto)
- hetfeld 9y agoWhat Estonia's e-residency actually means. Let's assume you have a startup and you want it to be registered in Estonia, paying taxes and using the Estonian banks for financial purposes. 1. With e-Residency you can't enter Estonia, you need a separate business or travel visa [1] 2. At present, it’s still necessary to travel to Estonia in order to apply in person for an Estonian business bank account. [2] 3. Good, fancy and catchy name "e-Residency" is actually an infinite loop of bureaucracy. You can't remotely open a bank account, you need to travel personally to Estonia, and you have a chance that banks will approve your application. But you can't enter Estonia with this "e-Residency" for this to happen. [1] https://e-resident.gov.ee/faqs/about-e-residency/#coming-to-estonia https://e-resident.gov.ee/faqs/about-e-residency/#coming-to-... [2] https://medium.com/e-residency-blog/banking-for-e-residents-your-key-questions-answered-99519bb28d85 https://medium.com/e-residency-blog/banking-for-e-residents-... And this is just a little tip of the iceberg, there are a lot of articles about real experience of e-residents of how unfriendly for "e-residents" the banks in Estonia are. And without a bank you can't make your startup work. Today it's just better with the same level of bureaucracy to open a company in other, more startup-friendly countries that grant a residency and have decent, more digital-friendly banks. I hope something will change in near future, the main idea of e-residency is actually really amazing.
- shishko 9y ago> You can't remotely open a bank account, you need to travel personally to Estonia Unless you're from US, you can open bank account remotely http://www.zdnet.com/article/borderless-banking-estonias-e-residents-can-now-open-accounts-without-going-there/ http://www.zdnet.com/article/borderless-banking-estonias-e-r...
- kabu 9y agohttps://about.holvi.com/e-residents/ https://about.holvi.com/e-residents/ - try here o)
- wiradikusuma 9y agoI'm still unclear of the benefits. Could anyone shed some light: What can we do with it that we can't do now? Let's say that I'm a solo entrepreneur or small SaaS owner from a developing country (e.g from Asia, Africa or LatAm) -- basically, typical HNer who's not from Europe/US.
- ibn_ibid 9y agoIt is basically a way to make it easier for entrepreneurs to do business in the Eurozone and take advantage of Estonia's generous corporate tax structure. It's mostly a legal / financial device, you can't use it for travel or citizenship purposes.
- GordonS 9y agoAre there any real benefits for citizens of other European nations? For example, I run a small B2B company in the UK - would there be any benefits to incorporating in Estonia?
- gwbas1c 9y agoFrom the article, the author is able to be on the board for an Estonian company and take payment in Euro as a consultant. He can also e-sign documents.
- thinkloop 9y ago> take payment in Euro as a consultant Isn't it relatively easy to open a Euro denominated account in most countries?
- ohazi 9y ago> can open Estonian bank and securities accounts Does anyone know how well this works in practice for US citizens? I've been led to believe that FBAR requirements are so onerous that most non-US banks would rather turn away US citizens than take their business.
- carlmr 9y agoI'm not an accountant, but wouldn't a foreign business with an associated bank account count as a foreign person? I mean I'd assume that incorporated businesses in Germany (e.g. GmbH which roughly translates to LLC) would count as a German person and the same for Estonia. You as the owner would still have to do your taxes and FBARs on the income you receive and what you have in your accounts. But I wouldn't expect to file FBARs for the business.
- ohazi 9y agoThere might be some questions about beneficial ownership of the company, but maybe? My original question was more along the lines of the individual with e-residency opening a personal bank account.
- inertial 9y ago- Are there any good (easy to use) payment processors available in Estonia (like Stripe) ? - Is your startup governed by specific laws for data privacy etc. - What about legal disputes, arbitration. How does that work for startups based out of Estonia ?
- iKristjan 9y agoWe're successfully using Braintree for about 4 years now and I know several other Estonian startups who do as well. https://www.braintreepayments.com https://www.braintreepayments.com
- fcolas 9y ago+1 A bit of back and forth for the KYC process, but the onboarding process and the team are quite good and to the point.
- vages 9y ago"Specific laws for data privacy": GDPR at the least.
- kreetx 9y agoNo Stripe unfortunately..
- martkaru 9y ago1. There is EveryPay https://every-pay.com/ https://every-pay.com/ . You need to open an account in the LHV bank first before receiving payments. (disclaimer: me and our dev team built their tech platform) 2. All the EU data laws apply. 3. I guess it depends on how you specify it in your contracts, you could do the disputes/arbitration wherever you want. There is an overview of dispute options here: https://www.eesti.ee/en/entrepreneur/legal-aid/resolution-of-legal-disputes/ https://www.eesti.ee/en/entrepreneur/legal-aid/resolution-of... . For example, if you have a customer not paying their invoices that are below 6400 euro you could file an a request in E-toimik/E-file (a paperless court system) and the collection is automatic. You could also sue people "online" there. (disclaimer again, I lead the software architecture/development work on the E-file project.)
- edwin01 9y agoI incorporated in Estonia few years ago because of what their promo materials say. It’s a total shitshow unfortunately and while it’s true that you can do everything online, it’s not what you think. All user interfaces are straight from the 90s, only the most basic forms are in english and they want to know everything about your business while setting ridiculous limits. For example, you need to have half of your capital available always. If you end the year even with 49% of your capital, you have to submit a report how you are planning to fix the situation. This is highly limiting requirement for any startup. When you need to do anything else than submit the most basic forms, you have to fill in forms that are available only in estonian. If you need help, good luck finding a person who can serve you in english. Don’t get me wrong, estonian people are very nice and will try to help you but the language barrier is very awkward to deal with. If you plan to incorporate in Estonia, make sure you hire a local accountant because you really can’t decipher their accounting requirements yourself, put the lowest amount of capital required in (2500€) and mentally prepare for overall frustrating experience. I applaud Estonia for all the efforts they have put into rising from the ashes of russian control but if I knew back then what I know now and had to make a choice now where to incorporate, I would skip Estonia.
- thinkloop 9y agoThanks for touching on some of the things I was expecting to read in the article. > you need to have half of your capital available always What does this mean, in a bank account?
- edwin01 9y agoYes. If your balance at the end of the year isn't half of your starting capital, you need to tell estonian government officials how you are planning to recover from this horrible failure. I didn't know this on my first year and we just made a small investment at the end of the year that made the balance to drop at horrific 40% level which triggered alarms in the government. If you fail to satisfy them with your plan, (if I understood right estonian-only materials), they can declare your company bankrupt. I know it sounds ridiculous but welcome to Estonia I guess. Though I do doubt that the officials would close your business unless you actually go bankrupt but it's still a hassle and feels very controlling to explain your business to a government at this level.
- nstj 9y agoThe article claims that Japanese PM Shinzo Abe and French PM Emmanuel Macron are Estonian “e-residents”. Has anyone seen any non-Estonian reports which support this claim?
- SyneRyder 9y agoI did find a German news article from 2016 saying that Angela Merkel is an Estonian e-resident - presented to her by the Prime Minister of Estonia. So it seems plausible, but that it's something presented to them as a symbolic PR stunt. "On Thursday, Prime Minister Roivas will present Merkel with an e-residency card - allowing the chancellor to become a digital resident and try out Estonia's digital solutions firsthand." http://www.dw.com/en/in-estonia-merkel-and-roivas-talk-russia-and-internet/a-19499732 http://www.dw.com/en/in-estonia-merkel-and-roivas-talk-russi... There's an Estonian story with photos about that here: http://estonianworld.com/technology/angela-merkel-becomes-estonian-e-resident/ http://estonianworld.com/technology/angela-merkel-becomes-es...
- nstj 9y agoBut she didn’t “sign up” for residency, they “presented” it to her which is a whole different scenario.
- SyneRyder 9y agoI don't think it's a different scenario. Even the Estonian press says Shinzo Abe was presented with his e-residency, rather than him applying: https://news.err.ee/115597/japanese-prime-minister-becomes-estonian-e-resident https://news.err.ee/115597/japanese-prime-minister-becomes-e... "Abe's e-residency card was presented to him by Taavi Kotka, the Deputy Secretary General at Estonia's Ministry of Economic Affairs, currently on a visit to Japan. Kotka told ERR that e-residency was Estonia's gift to Abe, which he accepted."
- fcolas 9y agoI'm within the 1st year of e-residency + incorporation. Here're a few of my experiences. 1. Setup is not as straightforward as they claim, but it's still quite easy. It compares well to what I've seen in France (LegalStart, CCIs, etc.) and the USA (Clerky/C-corp, Delaware, etc.). Actually there's no (printed) paper work because all is digitally signed with your e-residency card—only that is a big plus. 2. Running the company is similar to a C-corp but it's 10x easier than an SAS in France—where you've to register for, know about, and manage nearly 10 different tax agenda. It's also 2x to 5x cheaper to run than in USA and France. 3. However, it's true that banks are lagging a little behind but to their defence they face AML/KYC requirements, and e-residency is a lot of randomness for them—needless to say (?) that banks are risk averse. For comparison, note that Clerky was launched in 2013 to streamline the legal paperwork for C-corps when e-residency started in 2014. And see how long it took before Stripe partners with Silicon Valley Bank (SVB) for its Alpha program. - So I feel like banks do a good job although there's room for improvement. 4. Internationalisation of some institution's websites has bugs—basically your preference for english is reset to Estonian once in a while, but most of it is translated in English (and Russian and Finish?). 5. Some institution's websites are old looking but it's not worst than in Delaware or in France. So far, institution's websites are quite clear. For comparison: when paperwork in e-Estonia is done with digital signing, in 2017 I still had to (surface) mail or fax documents to France's and Delaware's institutions, sometimes with credit card number written in clear, or with a check enclosed—this is prehistory. 6. For the legal setup and accounting, I use LeapIN. So far they're very professional, their website has an extensive Q&A and knowledge-based section—that I read. Their pricing segments are clear. And they seem to have a growth mindset—reach out for more advice on how to onboard and their price. 7. Money-wise I was unaware of the 50% social capital requirement left on your account at the end of the fiscal year (note that it also exists in France and, by inference, probably in some other European countries)—maybe they could communicate more on that, it's not nice to figure that out later. - Still, so far I feel I've got value for my money and I can pull out if needed—no commitment which isn't the case of many B2B SaaS solutions with long term contracts (if we compare).
- edwin01 9y ago> I can pull out if needed According eesti.ee, it will take around six months to close limited liability company in Estonia. So yes, technically you can pull out but if it's anything like other more obscure legal procedures in Estonia, good luck. Conveniently this is not mentioned anywhere in the nice looking promo sites either ;)
- ex3ndr 9y agoI have several friends from russia that wanted to build their startups in a global way, at least not in russia (receive and send money across borders is a nightmare - basically everyone in the country doing it illegally). And they decided to became e-residents. What's now? All their funds are blocked and accounts are closed in one day without notice.
- dwighttk 9y ago>Japanese prime minister Shinto Abe was the first err... >My e-Residency is not a passport. It’s more than a tourist visa, and far less than citizenship. what? Slip that into the last paragraph? What is it exactly?
- zhengyi13 9y agoI saw that too, and personally thought it was probably not deliberate, but it could be a poke at his uyoku leanings.
- awalton 9y agoDoes being an "e-resident" make you subject to the GDPR? So you can tell e.g. Facebook and not have to lie about your country of residence? If so, I could see this becoming very popular over the next few years...