Estonia

Much has been made about the worsening business climate in Europe in the past year or so, with France being the front-runner with its increasingly hostile tax and regulatory environment.

Recently I heard a fact which was hard to believe.

When going bankrupt for the first time in Italy, one can’t do business for 4 years. But things are not that bad everywhere in Europe.
As an Estonian, I can say that compared to other countries we have quite transparent and simple business climate (although as a libertarian I would say that things could be even better). For example, Estonia has no corporate income tax and dividends are flat taxed with 21 percent.

At the beginning of the year, the Heritage Foundation compiled a report placing Estonia 11th the world for economic freedom, just one notch above the USA.

Estonia also arose in Ron Paul’s speech in Mises Institute “Do We Live in a Police State?”, where he had some good words and a story about Estonia. The ecosystem for entrepreneurs is quite good, but obviously due to our relative smallness, the main problem is lack of venture capitalists and angel investors acting as mentors to start-ups.

Being small geographically and demographically is not a bad thing, because that has allowed Estonia to easily adjust to economic situations and implement various measures to nurture entrepreneurship and technology with considerable ease. That has bought us a somewhat tech savvy reputation, which others would like to copy.

One example is the ID-card system, which to some of my fellow foreign libertarians might evoke fears for privacy, but allows anyone to start a fully functioning company in 15-20 minutes without leaving their computer.

There are more benefits, like the ability to give digital signatures, which are equal with hand written signatures, voting in elections, having digital health records, and more. Furthermore, data on ID cards is encrypted. More about it can be read here.

Currently, Estonians and other people permanently living in Estonia can take advantage of those solutions, but recently an ambitious project was started on the initiative of the President of Estonia, Toomas Hendrik Ilves and includes local IT visionaries. It proposes to move and duplicate all the Estonian data systems to cloud or into servers which reside all over the world in friendly countries.

That means starting a cyber war or occupying Estonia would be pointless as databases such as Business registry, E-Health, E-Court, E-School, and more can still function seamlessly. Furthermore, and what is the most exciting, is that it has been suggested that in the future foreigners anywhere could also acquire our e-identities and become “satellite citizens” and enjoy all the same benefits.