SA loses as its entrepreneurs move companies to Estonia

The Baltic country's e-residency programme offers access to a highly efficient digital-first business environment with alluring prospects for local tech companies

- By Lindsey Schutters

Imagine being a very small country (a landmass about the size of Gauteng) with 1.3-million residents and a declining population rate, no significant natural resources except some shale gas, and a previously hostile neighbour in the form of the Soviet Union, which fell in 1991.

That's Estonia, whose strategy to increase its tax base has involved establishing an e-residency programme to lure foreign businesses in return for exporting its world-leading digital government services. For a growing number of South African tech entrepreneurs, the key to unlocking global markets, EU-based investment and a bureaucracy-free future doesn’t lie in Sandton or Stellenbosch — it’s in Tallinn.

Estonia’s fabled e-residency programme, once a curiosity for digital nomads and crypto-optimists, has found a surprising following in South Africa’s start-up scene, and 436 of Mzansi’s finest are already enrolled. But although the Baltic republic promises digital freedom and access to European capital, the decision to incorporate one’s company offshore isn’t as simple as clicking “register” for the government's e-Residency programme.

“E-residency is just an access to our digital ecosystem,” says Katrin Vaga, a former journalist who heads PR for the programme. “It’s not tax residency, it’s not a golden visa, it’s not even about physically moving to Estonia. It simply gives entrepreneurs a secure way to operate in our digital-first business environment.”

This digital infrastructure, built over two decades, allows foreign founders to register and run a European company entirely online — and in English. For software developers, marketing consultants and other knowledge workers, it’s a frictionless gateway to EU business.

“It’s a 15-minute process,” Vaga explains. “From application to launching a company, it’s all remote, all online, all verified with a secure digital ID.”