Brexit has led to around 4,000 UK companies setting up shop in the EU-member state of Estonia, mostly by registering for the country’s much-talked about e-residency scheme.
Kaja Kallas, Estonia’s prime minister since January 2021, told City A.M. this morning that her country is benefitting hugely from Britain’s departure from the European Union.
“When the United Kingdom decided to leave the European Union, many British friends took up our e-residency services,” she said.
“It clearly increased after Brexit, even before actually, even when the vote happened, we saw a spike.”
“We have seen more than 4,000 British companies coming to Estonia,” Kallas continued, explaining that the UK companies’ main reasons were access to the EU, the country’s tax system, as well as Estonia’s flourishing tech scene and digital infrastructure.
For example, Kallas said that Estonia currently has seven unicorns – a tech firm valued at more than $1bn. “Given that we are only 1.3m people, this is a lot,” she pointed out.
Kallas went on to say that her and previous governments have tried to make conditions as favourable as possible for “our British friends,” primarily by offering a wide range of digital services.
“99 per cent of companies were established online, it takes under 20 minutes to set up a company in Estonia, and to start operating,” she explained.
Moreover, companies pay zero per cent corporate income tax if they reinvest in their company, “if you take dividend you pay tax but if you re-invest, there is no tax,” the prime minister continued.
“That is the fight we are currently having with the OECD and the G7,” Kallas laughed.
“What I don’t understand is that not all countries take up our system, it’s the most competitive system out there,” she said.
Tax revenues up by 60 per cent
The arrival of UK companies has partly contributed to a 60 per cent jump in tax revenues this year so far, compared to the same period in 2020.
“We have gained an additional €51m in tax, it may not be a big number for you, but we are a small country,” Kallas concluded.
City A.M.’s full interview with Estonia’s first minister will be published on Monday.