TREND
Laetitia Hoquetis-Sheppard is Digital Transformation&AI Lead at the Baltic Defence College (BALTDEFCOL/NATO), Estonia. She has 13 years’ experience in behavioural science, data analysis and transformation consultancy, including roles at Bloomberg and EZ Group. Based in Estonia, she observes from the inside the dynamics she analyses in this article.
Why do billions of euros in tax revenue flow each year to a small number of states that have grasped something the others have not yet been able to articulate?
The problem that most states have not yet identified
There is a class of mobile professionals that official migration statistics do not capture. They are not counted as immigrants. Nor are they mere tourists. They work remotely for international clients, generate income, and actively choose the legal and tax framework within which they operate. They pay their taxes somewhere, or pay them nowhere. And in both cases, most states capture nothing. There may be 5 to 10 million such people worldwide, once we subtract from the figure of 40 million who identify as digital nomads those who have worked from abroad for only one week in the year. And their median income is $124,000 per year[1].
This is not a niche phenomenon. It is a real, mobile tax base that is almost entirely untapped. And only one country has figured out how to tap into it systematically: Estonia.
Since 2014, its e-Residency programme has enabled any entrepreneur to set up a business in the EU, access a European bank account and file their taxes, all from anywhere in the world, without residing in Estonia. 125,300 e-residents from 170 countries have set up 35,500 businesses.
The Estonian government generates €124.9 million a year from this, with a return of €12 for every euro invested. By 2025, this revenue had increased by 87%[2]. These people do not live in Estonia. They do not use its hospitals, schools or roads. They contribute without consuming. That is why the ROI is 12:1. And that is precisely what almost all the programmes that followed failed to achieve.
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