E-Residency. People from all over the world can start a company there. A powerful idea.
Because Estonia is a tiny country of 1.3 million people, so to get a more realistic picture Tallinn should be compared to Berlin, etc.
Infrastructure in Tallinn is ok, but it also has its problems. In the past the biggest reason was that labour was cheap, it is close to Scandinavia and the government wont bother you as long as you dont do something illegal.
E-Residency does help in general but up to now no unicorns ware created by an e-resident.
Bigger reason is that whoever made this list of Estonian unicorns is very creative with it, as it includes companies founded by Estonians abroad.
Flat tax is nice.
Well, Estonia is almost a city-state, half the people live in Tallinn, which is a tech-hub.
I don’t mean to be negative, Tallinn is doing great, but the numbers on the country level are not really comparable
Because Eesti = besti
The graphics says Estonia has 7.7 unicorns per capita. Apart from the mythical beast (seems a lot, are they doing intensive agriculture or something), what exactly is being measured here?
For reference, the current estimated population of the listed countries as of 2023:
1. Estonia – 1,320,000
2. Luxembourg – 684,000
3. Norway – 5,479,000
4. Sweden – 10,680,000
5. Malta – 515,000
6. UK – 68,044,000
7. Switzerland – 8,940,000
8. Ireland – 5,054,000
9. Denmark – 5,876,000
10. The Netherlands – 17,630,000
So the number of unicorns (privately held startup company with a value over $1 billion) for each country (rounded to the nearest whole number) would be:
Estonia is definitely punching above their weight.
Probably good PR
Keep in mind that Startup valuations before the company is market traded are complete total bollocks.
Whilst the company is privatelly held the “total valuation” is linearly extrapolated from the price at which the latest investment came in relative to the share of the company sold (so $100,000 for 0.1% of the company “means” the company is “worth” 100,000 * 1000 = $100 billion).
Given that all insiders win from it, it’s not at all uncommon for an existing large investor to do a small investment for a tiny share of the company in order to boost the book value of their existing large investment in that company. This is especially attractive for funds which specialize in Startup Investing who can turn around and tell their own investors just how amazingly genial they are to get paid more $$$.
Note that because the company is not Market Traded (where such shennigans would be considered Market Manipulation, i.e. illegal), this is all 100% legit.
Not saying that’s any worse or better in Estonia, just saying that in general unicorn valuations for Startups are bollocks.
In Romania, there are higher chances of finding an actual unicorn
This graph makes me think Estonia should be in the Nordics instead of Finland lol.
My country is probably negative
A lot of MLM scams and fake company created for money laundering are based in Estonia, I think it’s due to taxation and why you can easily open it and manage it remotely
My personal experience working for one of those so-called Estonian “unicorn” startups for over a year and a half is that the country is abusing its position and agressively marketing to attract VC but most of those unicorns turn out to be as mythical as the name of the animal suggests with the money disappearing down the pockets of unscrupulous Estonian businessmen being puppeteered by (of all possible nationalities) mostly Russians.
The only people believing in the brilliant Estonian knowledge economy are the Estonians themselves.
Working for Estonians is an experience I’ll never forget. Outwardly, they are so proud of their singing revolution, but inside they are still behaving like Sovjet citizens.
Is that a question? I thought we are not suppose to post questions in this sub?
Quite many Finnish entrepreneurs start their businesses in Estonia too, as the taxation and legislation are more favourable and it’s only 2 hours from Helsinki by ferry. Getting a resident permit is quite easy too as far as I know.
There is a decimal issue somewhere here 7.7 per capita Unicorns? Lol that means literally everyone is a billionaire in that country. It should be more like 7.7 per million people.
because its so fucking easy to do buisness in estonia
​
no other country comes close to the ease of Estonia be it tax or starting an business
The county has a tiny population, it hardly makes sense to compare it even to a medium-sized country, nevermind the big ones.
Goverment dosent steal all your money
I’d say lack of paperwork needed to create new business(everything can be done online under 30 min), and e-residency plays along nicely. Also quite transparent tax system where tax declatatioms are also managed online.
This might be propaganda. How you measure startups? Is a new “innovative” pizzeria a startup? I have also seen claims, that it is Finland, which attracts the most venture capital money.
Estonia leading is a combination of multiple things:
– Skype was born there, employees of Skype then went on to create multiple companies, bringing with them skills that cannot be learned anywhere else than on the job: what it takes to scale a business engineering-wise to millions of users.
– Estonian are hard working and are still underdogs: no one expects them, anywhere, and they have to prove themselves, constantly
– Extremely business-friendly environment: managing a company is dead simple: everyone talks about creating a company in a couple of clicks: you don’t do that everyday, but managing you do
– No bureaucracy: everything is digital and because Estonians would rather prefer sending an email or text message than talking to someone, they automate as much as possible
The list goes on, but the bottom line is that Estonia deserves their position. You don’t have to trust me, just visit.
How much of that has trickled down?
Estonian people are very smart and have intelligence.
Did anyone here read the article? Half of the companies aren’t even estonian.
Oh look, an estonian was involved in the founding of the company in the US, UK, Norway….. lets call it an estonian startup.
That’s like saying the Linux Foundation is a Finnish company.
I have had the opportunity to explore the startup and innovation ecosystems in both Italy and Estonia, and the differences are striking.
In Italy, there is a great emphasis on traditional industries, such as fashion and food, and a lack of government support for tech startups. There are also many bureaucratic barriers that make it difficult to start and run a business, such as high taxes and complicated regulations. This can make it challenging to attract investors and scale a business.
On the other hand, in Estonia, the government actively encourages entrepreneurship and offers a supportive ecosystem for startups to grow. The country has a simple and transparent tax system, and starting a business is relatively easy. Additionally, there is a strong focus on innovation and technology, with a growing number of startups in sectors such as fintech, cybersecurity, and e-governance.
Personally, I found the Estonian startup ecosystem to be more welcoming and supportive, with a strong sense of community among founders and investors. This is reflected in the high number of successful startups coming out of Estonia, such as TransferWise, Bolt, and Pipedrive. While Italy has its strengths, I believe that if we want to foster a strong and sustainable startup ecosystem, we need to focus more on supporting innovation and entrepreneurship.
Law of small numbers.
The North/South divide is sharp in this one
I just want to be upvoted!
They have a strong startup outreach program across the entire EU, showcasing their e-residency and simple LLC system with fair taxation.
As long as you’re not pulling the money out of the company, there’s no corporate tax in Estonia. You only pay if you decide to pay out profits as dividends. As long as you’re reinvesting the money into the company, you’re not paying any taxes.
The entire country is ran on the internet, there’s next to no need to ever do any paperwork. The only legwork you need to do is to get yourself to the nearest embassy to get your e-residency ID, then you can start and operate your Estonian LLC entirely online. You don’t even have to open a bank account there and can use Revolut, Wise etc. They have direct integration with automated bookkeeping solutions like xolo.io.
They’ve been working on the system for 2 decades and it’s now paying serious dividends.
why people call it ecosystem, not just a system? Isn’t ecosystem more about biology, organisms and environment?
Tiigrihüpe (Tiger’s leap/jump) in the 90s, it was a government program which invested in IT tech, broadband internet connection to schools and spearheaded IT classes in schools, teaching students programming at a quite young age (pushed by Toomas Hendrik Ilves, who later became our president) -> Kazaa pirating software -> Skype (built by people some of whom made Kazaa and used the same tech) -> Skype founders exited with a lot of money -> they invested in upcoming startups like Pipedrive, Wise, Playtech and many others -> new wave of investors who invested in startups like Bolt, Skeleton Tech, Bondora, etc -> new generation invested in another wave of startups like Veriff, Sixfold, etc.
It’s an ecosystem that has gone through at least 4-5 positive feedback loops over the last 2 decades.
And in the meanwhile government has been pushing for more IT-centric government management, and innovated on some programs like the ID card, internet voting, online taxes, digital prescriptions, digital medical history, e-residency, online marriages, online notary, etc.
Low taxes and low bureaucracy. Economic liberalism works
36 comments
E-Residency. People from all over the world can start a company there. A powerful idea.
Because Estonia is a tiny country of 1.3 million people, so to get a more realistic picture Tallinn should be compared to Berlin, etc.
Infrastructure in Tallinn is ok, but it also has its problems. In the past the biggest reason was that labour was cheap, it is close to Scandinavia and the government wont bother you as long as you dont do something illegal.
E-Residency does help in general but up to now no unicorns ware created by an e-resident.
Bigger reason is that whoever made this list of Estonian unicorns is very creative with it, as it includes companies founded by Estonians abroad.
Flat tax is nice.
Well, Estonia is almost a city-state, half the people live in Tallinn, which is a tech-hub.
I don’t mean to be negative, Tallinn is doing great, but the numbers on the country level are not really comparable
Because Eesti = besti
The graphics says Estonia has 7.7 unicorns per capita. Apart from the mythical beast (seems a lot, are they doing intensive agriculture or something), what exactly is being measured here?
For reference, the current estimated population of the listed countries as of 2023:
1. Estonia – 1,320,000
2. Luxembourg – 684,000
3. Norway – 5,479,000
4. Sweden – 10,680,000
5. Malta – 515,000
6. UK – 68,044,000
7. Switzerland – 8,940,000
8. Ireland – 5,054,000
9. Denmark – 5,876,000
10. The Netherlands – 17,630,000
So the number of unicorns (privately held startup company with a value over $1 billion) for each country (rounded to the nearest whole number) would be:
1. Estonia – 10 (10.164)
2. Luxembourg – 2 (2.1244)
3. Norway – 12 (12.0538)
4. Sweden – 23/24 (23.496)
5. Malta – 1 (0.9785)
6. UK – 109 (108.8704)
7. Switzerland – 14 (14.304)
8. Ireland – 8 (8.0864)
9. Denmark – 9 (8.814)
10. The Netherlands – 21 (21.156)
Estonia is definitely punching above their weight.
Probably good PR
Keep in mind that Startup valuations before the company is market traded are complete total bollocks.
Whilst the company is privatelly held the “total valuation” is linearly extrapolated from the price at which the latest investment came in relative to the share of the company sold (so $100,000 for 0.1% of the company “means” the company is “worth” 100,000 * 1000 = $100 billion).
Given that all insiders win from it, it’s not at all uncommon for an existing large investor to do a small investment for a tiny share of the company in order to boost the book value of their existing large investment in that company. This is especially attractive for funds which specialize in Startup Investing who can turn around and tell their own investors just how amazingly genial they are to get paid more $$$.
Note that because the company is not Market Traded (where such shennigans would be considered Market Manipulation, i.e. illegal), this is all 100% legit.
Not saying that’s any worse or better in Estonia, just saying that in general unicorn valuations for Startups are bollocks.
In Romania, there are higher chances of finding an actual unicorn
This graph makes me think Estonia should be in the Nordics instead of Finland lol.
My country is probably negative
A lot of MLM scams and fake company created for money laundering are based in Estonia, I think it’s due to taxation and why you can easily open it and manage it remotely
My personal experience working for one of those so-called Estonian “unicorn” startups for over a year and a half is that the country is abusing its position and agressively marketing to attract VC but most of those unicorns turn out to be as mythical as the name of the animal suggests with the money disappearing down the pockets of unscrupulous Estonian businessmen being puppeteered by (of all possible nationalities) mostly Russians.
The only people believing in the brilliant Estonian knowledge economy are the Estonians themselves.
Working for Estonians is an experience I’ll never forget. Outwardly, they are so proud of their singing revolution, but inside they are still behaving like Sovjet citizens.
Is that a question? I thought we are not suppose to post questions in this sub?
Quite many Finnish entrepreneurs start their businesses in Estonia too, as the taxation and legislation are more favourable and it’s only 2 hours from Helsinki by ferry. Getting a resident permit is quite easy too as far as I know.
There is a decimal issue somewhere here 7.7 per capita Unicorns? Lol that means literally everyone is a billionaire in that country. It should be more like 7.7 per million people.
because its so fucking easy to do buisness in estonia
​
no other country comes close to the ease of Estonia be it tax or starting an business
The county has a tiny population, it hardly makes sense to compare it even to a medium-sized country, nevermind the big ones.
Goverment dosent steal all your money
I’d say lack of paperwork needed to create new business(everything can be done online under 30 min), and e-residency plays along nicely. Also quite transparent tax system where tax declatatioms are also managed online.
This might be propaganda. How you measure startups? Is a new “innovative” pizzeria a startup? I have also seen claims, that it is Finland, which attracts the most venture capital money.
https://paaomasijoittajat.fi/en/finnish-startups-attract-the-most-venture-capital-investments-in-europe/
I don’t know, I guess they are just based.
Proud of you lil brother regards Finland
Estonia leading is a combination of multiple things:
– Skype was born there, employees of Skype then went on to create multiple companies, bringing with them skills that cannot be learned anywhere else than on the job: what it takes to scale a business engineering-wise to millions of users.
– Estonian are hard working and are still underdogs: no one expects them, anywhere, and they have to prove themselves, constantly
– Extremely business-friendly environment: managing a company is dead simple: everyone talks about creating a company in a couple of clicks: you don’t do that everyday, but managing you do
– No bureaucracy: everything is digital and because Estonians would rather prefer sending an email or text message than talking to someone, they automate as much as possible
The list goes on, but the bottom line is that Estonia deserves their position. You don’t have to trust me, just visit.
How much of that has trickled down?
Estonian people are very smart and have intelligence.
Did anyone here read the article? Half of the companies aren’t even estonian.
Oh look, an estonian was involved in the founding of the company in the US, UK, Norway….. lets call it an estonian startup.
That’s like saying the Linux Foundation is a Finnish company.
I have had the opportunity to explore the startup and innovation ecosystems in both Italy and Estonia, and the differences are striking.
In Italy, there is a great emphasis on traditional industries, such as fashion and food, and a lack of government support for tech startups. There are also many bureaucratic barriers that make it difficult to start and run a business, such as high taxes and complicated regulations. This can make it challenging to attract investors and scale a business.
On the other hand, in Estonia, the government actively encourages entrepreneurship and offers a supportive ecosystem for startups to grow. The country has a simple and transparent tax system, and starting a business is relatively easy. Additionally, there is a strong focus on innovation and technology, with a growing number of startups in sectors such as fintech, cybersecurity, and e-governance.
Personally, I found the Estonian startup ecosystem to be more welcoming and supportive, with a strong sense of community among founders and investors. This is reflected in the high number of successful startups coming out of Estonia, such as TransferWise, Bolt, and Pipedrive. While Italy has its strengths, I believe that if we want to foster a strong and sustainable startup ecosystem, we need to focus more on supporting innovation and entrepreneurship.
Law of small numbers.
The North/South divide is sharp in this one
I just want to be upvoted!
They have a strong startup outreach program across the entire EU, showcasing their e-residency and simple LLC system with fair taxation.
As long as you’re not pulling the money out of the company, there’s no corporate tax in Estonia. You only pay if you decide to pay out profits as dividends. As long as you’re reinvesting the money into the company, you’re not paying any taxes.
The entire country is ran on the internet, there’s next to no need to ever do any paperwork. The only legwork you need to do is to get yourself to the nearest embassy to get your e-residency ID, then you can start and operate your Estonian LLC entirely online. You don’t even have to open a bank account there and can use Revolut, Wise etc. They have direct integration with automated bookkeeping solutions like xolo.io.
They’ve been working on the system for 2 decades and it’s now paying serious dividends.
why people call it ecosystem, not just a system? Isn’t ecosystem more about biology, organisms and environment?
Tiigrihüpe (Tiger’s leap/jump) in the 90s, it was a government program which invested in IT tech, broadband internet connection to schools and spearheaded IT classes in schools, teaching students programming at a quite young age (pushed by Toomas Hendrik Ilves, who later became our president) -> Kazaa pirating software -> Skype (built by people some of whom made Kazaa and used the same tech) -> Skype founders exited with a lot of money -> they invested in upcoming startups like Pipedrive, Wise, Playtech and many others -> new wave of investors who invested in startups like Bolt, Skeleton Tech, Bondora, etc -> new generation invested in another wave of startups like Veriff, Sixfold, etc.
It’s an ecosystem that has gone through at least 4-5 positive feedback loops over the last 2 decades.
And in the meanwhile government has been pushing for more IT-centric government management, and innovated on some programs like the ID card, internet voting, online taxes, digital prescriptions, digital medical history, e-residency, online marriages, online notary, etc.
Low taxes and low bureaucracy. Economic liberalism works