If Europe's tech ecosystem wants to see how a digital-first approach to startups and governance can work in practice — and what it could mean for the proposed 28th Regime — it needs look no further than e-Estonia, the country's long-running project to build a fully digital society.
Since the 1990s, Estonia has adopted technology as the backbone of governance, business, and daily life, transforming itself from a newly independent state into one of the world's most advanced digital nations.
Check out our plain language guide to the 28th Regime and the work of EU Inc.
Since the 1990s, Estonia has adopted technology as the backbone of governance, business, and daily life, transforming itself from a newly independent state into one of the world's most advanced digital nations.
"100% digital, 0% bureaucrazy"
At the core of e-Estonia is a secure digital identity system: every Estonian citizen and resident has a government-issued ID card that enables them to access nearly all public and many private services online.
"0% bureaucrazy" highlights Estonia's commitment to eliminating unnecessary hurdles with smart, seamless digital solutions. With all government services now online, citizens and businesses can interact with the state quickly, securely, and efficiently—saving time and reducing stress.
Since December 2024, every service — even filing for divorce — can now be completed online, marking a new era in citizen-centric governance. This achievement positions Estonia as a global leader in digital governance, setting a benchmark for nations worldwide. This infrastructure allows for activities such as voting in elections, paying taxes, signing contracts, accessing healthcare records, and even starting a business — all digitally, from anywhere in the world.
e-Estonia offers a model for other nations, showing how digital infrastructure can enhance efficiency, reduce bureaucracy, boost economic competitiveness, and strengthen trust between citizens and the state.
Vahtras Vahtras is Managing Director of e-Residency and a board member of Enterprise Estonia https://eis.ee/en/. I spoke to her to learn about what Estonia’s experience can offer the 28th Regime.
e-Residency: Estonia’s gateway to a borderless digital economy
The e-Residency program, launched in 2014, lets non-residents apply for a digital identity, establish companies in Estonia, and access its digital services without needing to live there.
In simple terms, E-Residency gives foreign nationals secure digital access to Estonia's public e-services, enabling them to establish and manage companies fully online, sign documents digitally, and operate across borders without the friction of bureaucracy.
"While you wait for EU Inc., try "EE Inc"
When it comes to the need for the 28th Regime, Vahtras calls the current situation "unsustainable."
"Just recently, I heard about an Estonian founder who had to travel to Germany so a notary could read out — in German — a contract he himself had written. It took eight hours.
If investors were involved, they all had to be there in person. It's absurd. Founders should be building their technology, not wasting time like this.
Governments need to think boldly, even with ideas that sound like science fiction, because otherwise the private sector moves on."
"The 28th Regime in the form spearheaded by EU Inc., is essential if Europe wants to remain competitive with the U.S. or China." And in the meantime, we say: while you wait for EU Inc., try "EE Inc."
As of August 2025, Estonia's pioneering e-Residency program has evolved into a global community of over 126,500 e-residents from 185 countries, who have established more than 36,000 Estonian companies.
E-residents now account for around 20 per cent of all new companies created annually in Estonia, with roughly 400 new businesses founded each month. The initiative has also had a substantial impact on the country's startup scene, with 38 per cent of Estonian startups linked to e-residents. On average, the program receives about 1,000 new applications every month, and nearly half of e-residents today are EU citizens.
For Estonia, the program strengthens competitiveness, creates new revenue streams through taxes and fees, attracts international talent and investment, and drives indirect growth through service providers and employment. The model delivers clear financial value as well, generating an 8.7x return on investment compared to the state's outlay.
As a result, Vahtras contends that whatever Europe implements, it should benchmark against the most advanced systems.
"In Estonia, we've built infrastructure and testing environments over decades. What we don't want is to be forced to slow down, or to adopt structures that make our systems worse. That's why we're excited about the 28th Regime."
Modestly — but aggressively— waiting for the phone to ring
Vahtras praises the Estonian startups and investors campaigning on social media, asking for change, but admits Estonia "could be better at promoting our perspective."
She admits that Estonians can be too modest, sharing, "we sometimes joke that Estonian salespeople are 'aggressively waiting for the phone to ring. But we are involved. And people like Andreas Klinger, who really understands our systems, are strong allies."
In other words, don’t mistake modesty for weakness — this is, after all, the birthplace of unicorns like Skype, Playtech, Wise, Bolt, Pipedrive, Zego, Gelato, and Veriff.
Estonia offers safe haven for startups amid geopolitical risks
Estonia's location gives it a unique perspective, especially with Russia's invasion of Ukraine. Vahtras notes that Ukrainian and other non-EU startups are increasingly turning to Estonian e-Residency to establish companies rapidly — particularly in defence technology. Supporting defence and other critical sectors, such as energy and telecommunications, remains a key political and governmental priority for Estonia.
"For defence tech especially, speed matters," asserts Vahtras.
"Old models can't constrain us. This is how we can also restore foreign investment to the region, despite geopolitical risks."
"The war in Ukraine has made us more aligned, more awake. The Commission has moved faster on many fronts. Of course, war is tragic.
But in terms of impetus, it's like COVID — suddenly governments proved they could digitise quickly when they had to.
In Estonia, we developed a notary app during COVID. Now you can sign property deals from your desk with facial recognition.
It saved so much wasted time. EU Inc. and the 28th Regime should adopt that same digital-first approach."
She also cautions about the need to avoid brain drain — "Europe has talent, but if scaling is too difficult here, founders will go to the US or Asia. The 28th Regime could help keep startups in Europe by making it easier to grow here, which would also fuel the ecosystem — the "flywheel effect" of founders, employees, and new ventures."
Tallinn hydrogen technology firm PowerUP Energy Technologies is keenly aware of the challenges facing Ukraine, recently launching a crowdfunding campaign to deliver one UP1K hydrogen generator directly to a drone team operating on the front lines in Ukraine.
Headquartered in Estonia, PowerUP also operates legal entities in Finland and Poland. According to CEO Ivar Kruusenberg, an 'EU Inc.' would make life significantly easier:
"The immediate question is what the exact impact would be, especially on banking. I hope it would ease the process of opening bank accounts and conducting transactions across Europe, which is currently a hassle."
"For instance, to open a Finnish company and bank account, you need a Finnish residence permit, ID code, and postal address. The same applies in Poland. As someone who holds both Polish and Finnish ID numbers, I have to ask: why?"
He also sees that the 28th Regime would offer a significant advantage for fundraising, as it would "instantly position a local company as a regional or continental player."
"Coming from a small country, I definitely welcome this idea. I hope it would create a pan-European perspective for investors and observers."
Pick easy wins, then scale
Looking forward, Vahtras believes that Europe needs to stay agile rather than take a cautious approach to the 28th Regime, which involves agreement on paper over action, contending, "if you take too much on at once, you'll end up with endless committees and no real outcomes. It's better to pick the realistic bits, test them, and show they work. That's how innovation moves forward."
She suggests that every innovation needs optimists inside the government.
"If only pessimists are at the table — people who only see risks — then innovation loses. The private sector can't win against that. So identify the optimists in the Commission, amplify them, and pair them with private-sector drivers. And apply the startup mindset: don't try to fix everything at once.
Pick the easy wins first — unified entity, cross-border investment, digital-first business registry. Deliver quickly, then scale up."
Looking ahead, Estonia plans to make the e-Residency journey even smoother, with new digital solutions, more global pick-up points, and a secure remote identity verification system expected to roll out in 2026.
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