By : Arnaud Castaignet
Fuelled by the rising middle class and flourishing tech sector, Southeast Asia’s (SEA) startup scene is on the cusp of a significant economic boom, transitioning from a regional market with the promise to become the world’s next major commercial hub. This acceleration of the startup scene can be attributed to SEA’s tech-savvy populations.
Current figures show that 90% of those aged under 30 are regular internet users. This profile makes up 50% of the total population in the region, constituting a substantial rate of internet usage and creating a very digitally connected society (Forbes). Technology is changing the dynamics of SEA’s business landscape, altering the way people live and work.
While governments are focused on growth, they are also questioning whether startup innovation is the most stable route for achieving economic prosperity. There are still several systemic inefficiencies holding the region back, which makes the process of setting up a business costly and time-consuming.
While the tech and startup scene is racing ahead, bureaucracy in SEA is struggling to keep up, causing more entrepreneurs to look at alternative options for starting a business. One option that is becoming increasingly popular is Estonia’s e-Residency.
The Estonian Way
In December 2014, the Republic of Estonia became the first country to offer e-Residency. E-Residents are given a government-issued digital identity that enables them to start, run, and grow an EU-company from anywhere–entirely online. The program has so far attracted more than 58,000 people from 157 countries around the world.
How SEA founders can benefit
E-Residency can be beneficial to SEA entrepreneurs who want to take part in the rapidly transforming startup scene, but are frustrated with the amount of paperwork and slow processing times associated with starting and running a business. By providing an alternative with more efficient bureaucracy, e-Residency allows SEA residents to get up and running quickly in a transparent and secure business environment. There is also the benefit of gaining access to the entire EU market.
With the startup ecosystem in SEA growing at such a rapid pace, the market for investment is more competitive than ever, and the gap between early-stage and later-stage funding levels is widening. Through registering and growing a business with e-Residency, SEA founders gain more credibility in the eyes of investors, becoming a more attractive investment opportunity.
Southeast Asian e-Residency companies are at the forefront of crossing the cultural divide of Asia and the West. Through building links and fostering relationships, they help to strengthen SEA’s foothold on the world stage, making and promoting SEA’s reputation as an up-and-coming tech and startup hub.
Lastly, SEA entrepreneurs have the potential to benefit from e-Residency in the same way pioneering entrepreneurs from other countries have done.
“Throughout our research, Estonia shone through due to the easiness to start a company, the initial tax advantage for startups, the welcoming attitude towards new business ideas and the chance to run our business remotely. Choosing the right country to start a business is inevitably a significant part of one’s success and Estonia has definitely been the right choice for us,”said Esen Bulut, Co-Founder and CFO of Rimuut, an e-Residency company providing freelancers with invoicing, payment and contracting services, which enable them to function as a company without formally owning a company.
“I started Velmenni back in 2012 in India. After two difficult years, Buildit Accelerator from Estonia offered us a seed investment and invited us to Estonia. It was the turning point in our journey. The same year, I joined the newly launched e-Residency program. Because of e-residency, I was able to continue my business after I moved back to India. In the last four years, I have been managing our parent entity remotely. e-Residency has helped us in doing most of our business-related transactions remotely including the signing of contracts, filing taxes digitally, and banking using our e-Residency card,”said Deepak Solank, founder of Velmenni.
As SEA’s startup ecosystem thrives, it is worth exploring new solutions and following in the footsteps of successful entrepreneurs. Asep Bagja Priandana and Retno Ika Safitri from Indonesia, founders of Tanibox, did just that, and have managed to find customers in Hungary, Lithuania, and the Netherlands.
“The biggest benefit is the access to the EU market, even though we do business from Indonesia. Another benefit is the possibility of receiving payments and paying vendors from countries in the European Union faster because of the Single Euro Payments Area (SEPA),”said Asep.
Overall, e-Residency provides an exciting opportunity for SEA founders to launch their business stress-free, build international connections, and be part of a dynamic business world.
About the Author
Arnaud Castaignet has been the Head of International Public Relations for the Republic of Estonia’s e-Residency program since June 2017. Previously, Arnaud worked for the French President François Hollande as a digital strategist and communications officer. Arnaud also worked as an international communications consultant in Paris, advising governments, politicians, and corporations on their influence strategy. As a sought-after foreign policy analyst, Arnaud shared his stance on French politics with well-known media.