E-residents will have their financial footprint monitored digitally, in a manner stated to be transparent; the reaction to the widespread financial misbehaviour at high level revealed by the Panama Papers leak was suggested to be a factor helping the more transparent Estonian initiative according to Korjus. E-residency itself does not have an effect on income taxation — neither does it establish an income tax liability in Estonia nor does it relieve from income taxation in the resident's home country.
E-residency allows company registration, document signing, encrypted-document exchange, online banking, tax declaration, and fulfilment of medical prescriptions. Other services become available as the scheme is expanded. A smart card issued by the Estonian Police and Border Guard Board in Estonia or at an embassy is used for access to services.
Korjus said that registering an Estonian business was "useful for internet entrepreneurs in emerging markets who don’t have access to an online payment provider", and for startups from countries such as Ukraine or Belarus which suffer financial limitations from their governments.
E-residency is not related to citizenship and does not give the right to physically enter or reside in Estonia.
E-residency was led by Taavi Kotka, the vice chancellor of communications and state information systems in the Ministry of Economic Affairs and Communications. Although the idea of issuing ID cards to non-residents had been discussed at least from about 2007, and proposed again in 2012 by Estonian cybersecurity expert Anto Veldre, the concrete proposal ("10 million e-residents by 2025") was presented by Taavi Kotka, Ruth Annus, and Siim Sikkut on an idea contest by Estonian Development Foundation in 2014. The project was initiated with the prize money from the contest. It is developed by a state-owned foundation, Enterprise Estonia.
Kotka stated that, while the further goal of the project would be to gain millions of e-residents, its purpose was to increase the number of active enterprises in Estonia. The private sector must be able to develop concrete services on the legal and technical platform provided by e-residency, while the state would continue developing the legal framework according to the needs of the enterprises. It has also been discussed in Estonian media that e-residency could be used to spread knowledge about Estonian culture online to develop cultural export. By January 18, 2015, there had been applications from 225 countries, most of them from Finland (224), Russia (109), Latvia (38), the United States (34) and Great Britain (22).
In general the e-residency project was positively reviewed in the news media, being recognized for its innovativeness and potential. Estonia's former Minister of Finance Jürgen Ligi noted in 2014 that it was as yet unclear how e-residency would bring capital to Estonia. Some legal experts warn that using e-residency to incorporate a letterbox company in Estonia might under certain circumstances make that company's profits subject to double taxation, as this is a completely new legal status that has not been considered in the framework of existing international agreements to avoid double taxation.
There has been international interest in different countries, with the issue being covered by media in the United States (The Atlantic, The Wall Street Journal, Ars Technica), United Kingdom (The Guardian, Wired UK), Finland (Helsinki Times), Australia (ABC), Italy (Wired.it), and others. In neighbouring Finland, it elicited some fear that e-residency might give Finnish enterprises an urge to move to Estonia.
There was an increase in interest after the Panama Papers leak pointed out the need for greater transparency in offshore business. After Britain voted to leave the European Union, companies were seeking options to continue to be able to trade in euros, and others had other reasons: in the two weeks following the referendum, applications from Britain (with 616 e-residents hitherto) increased tenfold.