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Estonia invests in startups to find a new e-Residency

Estonian Government invests €600,000 in funding for four early-stage business ideas to find a new success story such as e-Residency, a "government startup" launched 5 years ago that has brought 31 MEUR in direct income so far.

“We have a bigger goal than just supporting entrepreneurship, as we are looking for solutions to export in the future – just as with e-Residency,” Viljar Lubi, the Deputy Secretary-General, Ministry of Economic Affairs and Communications said.

The Ministry of Economic Affairs and Communications has initiated a program called Accelerate Estonia to turn wicked problems into economic development for Estonia.

“Estonia surely cannot lead in solving all of the global challenges that will affect the next generations, we have to choose our fights. Accelerate Estonia creates a filter to decide which of the global challenges can be solved by our people,” explained Lubi.

Accelerate Estonia set the task of finding solutions to problems affecting both the public and private sectors, and each of the ideas chosen will now receive €150,000 in funding. The next stage is for the teams to create business plans to try and attract investors from the private sector, writes ERR.

Here are the four ideas chosen by ministry that will be funded to continue and the project descriptions by Garage48:

X-road for circular economy

The idea is to create an online environment that provides an overview of companies’ production waste so that another company can find and use their raw materials.

“A major shift to a circular economy has started globally. The number of companies, ready to start using production by-products as their manufacturing input materials, is growing. But accessing the steady flow of such resources is complicated, as this is what we’re used to calling waste,” explained the project manager Mayri Tiido. “Our idea is to create a centralised online matchmaking database with live streams of manufacturing by-products and leftover materials, which could be easily reused as valuable input material instead of given to waste collection,” she added.

Cross-border e-CMR

The goal of project is to remove paperwork from the logistics sector. As with any business, digitisation is also one of the major challenges in logistics. At the moment, there’s a lack of transparency, high use of actual paper, the technological backlog, etc. One of the main issues is the documentation of goods, which, for example in the case of road transport, is largely paper-based.

“We are creating a paperless real-time e-logistics ecosystem that will streamline the supply chain and make business and government services transparent,” explains Heiti Mering, Business Development Manager at Tieto.

KYC as a cross-border service

The KYC (Know Your Customer) initiative aims to simplify procedures to combat money laundering and to open a bank account in Estonia as a foreigner. KYC involves collecting customer data which is very time consuming because collectors do not exchange data with each other.

“There are already many competing products on the market, however, their usability is currently limited by lack of access to necessary data and legislative restrictions for using their data cross-border,” explained Rainer Osanik, founder and senior partner at R.O.S Law Office.

Health and pension insurance for e-residents

The concept is to improve the social security system for digital nomads, so they could benefit from the Estonian health care system.

There are almost 200 countries worldwide, each with its own social security and tax system. At the same time, there is another jurisdiction out there – the Internet. At this point, remote workers should either be affiliated to one of the national systems of their choice or rely on private health and pension insurance. Estonia could offer to digital nomads the opportunity to pay taxes in Estonia and get insurance in return.

9 months to prove themselves

Each team gets the full attention of the government, 150 000€ per project to support their work, a 9-month contract for the project manager and a possibility to engage extra resources and services. If within 9 months, the ideas turn out to be successful, the state will continue supporting them.

“When there is a clear need to drive major changes in the state, it is in our interest to continue investing, so that one day, the whole Estonia could benefit out of it,” noted Mikk Vainik, the head of Accelerate Estonia program.

Whether you seek world-class digitalisation capability or highly skilled and experienced architects for cross-border systems, Estonia is an attractive and scalable location for business investment.

Wish to invest in Estonia? Send us a request for e-Consulting to find out more.

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