Amazon's sellers from India are making use of the Estonian e-residency programme to access the European market as well as PayPal payments system. The e-residency launched by the Estonian government in 2014 gives a digital identity that allows entrepreneurs from across the world to run a business independent of where they are based. Riho Kruuv, Ambassador of the Republic of Estonia to India mentioned to The Economic Times that there are currently close to 1,600 applications from Indians as per the latest data. Most of these applications are from IT and Indian e-commerce sellers - especially from Amazon.
Online vendors mostly offer returns policy but in case of returned goods sold in the international markets, refunding becomes an issue as it involves foreign exchange transaction charges. The way around this is to hold a bank account within Europe. Vendors can, in that manner, have transactions without incurring extra charges.
"PayPal allows receiving overseas payments in India but is more restricted than in other countries, including Estonia (EU-member state). Also, it is more cost-efficient for a business to receive and make payments in Euros with PayPal Europe than with PayPal India where the amount needs to be converted to INR every time a payment is received. This can also be done with any other EU-business but with e-residency the e-commerce sellers have full control of the business (without the need for a local director, country manager, employee, etc.) and can manage the business completely online, sign legal agreements with their digital ID," said Varun Sharma, Head of Partnerships, e-Residency for Republic of Estonia.
After its launch, Kruuv said the program met with success and had already received about 30,000 registrations. An Estonian official said profits are tax-free until it gets expatriated as dividends, and that is one of the major attractions for businesses to get registered under the program.
"In India, it has been proved time and again that, good ideas spread the fastest by word of mouth. E-residency would be especially beneficial for companies which already have a base in Europe, but could save them time and money thanks to Estonia's business-friendly bureaucracy and tax environment," the Estonian government had said in a press statement then.
Bilateral trade between India and Estonia stood at $199.96 million in 2016-17.
(With PTI inputs)
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