Estonia, the country of the fit and the wit
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While many Western democracies seem to be in a state of decay and are no longer the safe, civilized and prosperous countries they once were, there are still some European countries that are governed well. One of those that stand out is Estonia.<br>Estonia is probably most well known for multiple software companies that originated from there, such as Wise, Bolt, Pipedrive and Skype. The government itself is also famous for being early in issuing government IDs with an embedded smart chip for online authentication already in the 1990s. Via the national portal at eesti.ee all residents can access extensive eServices ranging from viewing their health benefits to filing taxes.<br>Estonia has also been running an e-Residency program since 2014, where they issue digital ID cards to foreigners, making it easy for them to remotely log into the government portals and for example, establish businesses, file annual reports and so forth. Note that the e-Residency is not a path to physical residency. Estonia does, however, have a separate Digital Nomad visa program that makes it easy for non-EU citizens to also physically establish themselves in Estonia, assuming, of course, you meet the criteria, which includes, among others, a minimum monthly income of 3960 € from outside Estonia. EU citizens naturally have free mobility inside the EU and can simply get an apartment and register as a resident in Estonia if they so choose. And there are plenty of reasons to do so.<br>Estonians value health, education and entrepreneurship<br>I moved to Estonia about one and a half years ago. In my observations Estonia strikes me as a country that values health, education (in particular programming and natural sciences) and entrepreneurship highly.<br>I don’t know how Estonians achieve it, but they look pretty fit and rarely obese. Estonia has rye bread and sauna in their culture just like Finland, and in addition the flat terrain and well-planned bike routes and extensive network of parks (and pull-up bars everywhere) seem to create an environment where it is easy to live in a healthier way. The consumption of processed foods and candy also seems relatively low among Estonians.<br>The gym chain MyFitness also seems to be present everywhere. Even the Tallinn airport has a calisthenics workout station right at the departure gates, which anyone is free to use while waiting for their flight to take off. One of the top longevity influencers in Europe, Siim Land, is Estonian.
Estonians also seem to value the school system highly. The government has been actively raising teacher pay and has a stated goal of reaching 120% of the national average by 2027. The students are also expected to value the education and respect their teachers. According to the TALIS 2024 survey (OECD’s international teacher survey), Estonian teachers spend significantly more time on actual teaching and learning and waste less time on interruptions or keeping classroom order compared to the OECD average. This is among the highest rates internationally, meaning they spend relatively little time on maintaining order or dealing with disruptions. While the international education benchmark PISA scores have been dropping globally, Estonia has consistently been climbing the ranks in past decades. In the latest PISA study (from 2022), Estonia ranked number one in Europe for reading, mathematics and science. In the overall results, Estonia ranked seventh globally, only behind countries such as Japan, Korea and Singapore.<br>Valuing entrepreneurship is evident in how the taxation system is set up in Estonia. Famously, in Estonia, companies can defer taxes on annual earnings and reinvest all of their profit in growing the company. Taxes are due only later, when paid out from the company, for example as dividends. For individuals, receiving dividends from any Estonian or foreign company is tax-free as long as the company paying dividends already paid corporate tax on the same income.<br>The tax system is also very simple. For all individuals, all types of income, including salary and capital gains, are always taxed at a flat rate of 22%. This removes the incentive for anyone to try to convert income into different types, setting up holding company structures and other optimizations as there is no gain. All entrepreneurs can simply focus on growing their business and forget extra bureaucracy. There is also no marginal tax rate cliff to stop working at – everyone is encouraged to always try to produce as much value as they can. A simple tax system is also reflected in the fact that anyone can easily read all tax rules that apply to individuals in plain English on the Estonian tax authority website, and one does not need to hire any accountants simply to file taxes.<br>Estonia also has a very straightforward investment account system: any person can freely open a...