Es­to­nia of­fers Brexit loop­hole

China Daily (Hong Kong) - - WORLD -

TALLINN, Es­to­nia — As Brits brace for the up­heaval that Brexit could bring, some are turn­ing to Es­to­nia’s e-res­i­dency dig­i­tal ID pro­gram to keep do­ing busi­ness across the Euro­pean Union.

Us­ing its knack for dig­i­tal in­no­va­tion to cap­i­tal­ize on the global ex­plo­sion in e-com­merce, the small cy­ber-savvy Baltic eu­ro­zone state be­came the first coun­try to of­fer e-res­i­dency iden­ti­fi­ca­tion cards to peo­ple world­wide in 2014.

Touted as a “transna­tional govern­ment-is­sued dig­i­tal iden­tity”, e-res­i­dency al­lows users to open a busi­ness in the EU and then run it re­motely with the abil­ity to de­clare taxes and sign doc­u­ments dig­i­tally.

It does not pro­vide cit­i­zen­ship, tax res­i­dency, phys­i­cal res­i­dency or the right to travel to Es­to­nia. Ap­pli­ca­tions can be made on­line via the­ web­site and cost 100 euros ($112).

Just over 22,000 peo­ple from 138 coun­tries across the globe have be­come e-res­i­dents so far, in­clud­ing around 1,200 Brits and last year’s Brexit vote trig­gered a boom in ap­pli­ca­tions from the UK.

Be­fore it, only three Bri­tish cit­i­zens ap­plied per week, but that shot up to over 50 in its af­ter­math. There was also a 75 per­cent spike in UK traf­fic on the web­site af­ter Prime Min­is­ter Theresa May trig­gered the Ar­ti­cle 50 EU exit clause in March.

A “soft Brexit” would mean that Bri­tain could re­tain ac­cess to the Euro­pean sin­gle mar­ket like nonEU mem­ber Nor­way.

But the “hard Brexit” op­tion that has pre­vailed so far would see Bri­tain leave the Euro­pean sin­gle mar­ket and the cus­toms union, cre­at­ing a night­mare sce­nario for UK busi­nesses as there would no longer be free move­ment of goods and ser­vices.

“The UK may have cho­sen to leave the EU, but its en­trepreneurs can still choose to re­main in­side the EU’s busi­ness en­vi­ron­ment” through e-res­i­dency, said pro­gram di­rec­tor Kas­par Kor­jus.

Win­ners of the Mayor of Lon­don’s 2017 En­tre­pre­neur com­pe­ti­tion say they signed up for e-res­i­dency to mit­i­gate the risk Brexit poses for their busi­ness, a startup mak­ing en­vi­ron­men­tal­lyfriendly wet wipes.

El­lenor McIn­tosh and Al­borz Bo­zorgi both live in Lon­don but say they took up e-res­i­dency in or­der to be able to keep their com­pany, Twipes, in­side the EU’s sin­gle mar­ket.

Billing Twipes as “the fu­ture of toi­let pa­per”, its own­ers say they have reg­is­tered it both in the UK and Es­to­nia to boost in­vestor con­fi­dence.

“We had dis­cus­sions with many in­vestors from across Europe, Cyprus and Es­to­nia in par­tic­u­lar, and they view the un­cer­tainty of Brexit as a huge risk,” Bo­zorgi said.

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