SHERIDAN — A Wyoming Legislature committee is discussing an “e-residency” program, which would allow computer-based businesses in other states to operate under Wyoming’s business environment and statutes without physically relocating to Wyoming.
The Legislature’s Select Committee on Blockchain, Financial Technology and Digital Innovation Technology discussed the concept during its meeting in Sheridan June 15.
While the e-residency model has not been implemented in the U.S. yet, the European country of Estonia has set a successful precedent, according to a December 2021 memo prepared by Legislative Service Office staffer Clarissa Nord.
Through its e-residency program, Estonia issues non-residents an electronic identity in the form of a digital ID card to offer secure and convenient services. Under the program, e-residents can establish and manage a company remotely, apply for digital business banking and online payment services, digitally sign and transmit documents and declare Estonian corporate taxes online, Nord said.
Estonia first launched e-residency in 2014 to attract international business and increase the country’s international recognition in digital affairs, Nord wrote. Currently, Estonia has more than 84,000 e-residents from 170 countries that have established 16,000 companies. Estonia encourages business owners, entrepreneurs, freelancers and consultants who want to establish a company in the European Union to apply for e-residency.
It is important to note what e-residency is not, Nord wrote. It is not a travel document, citizenship or an actual residency, but a digital identity through which anyone in the world can incorporate a business. E-residency does not affect or change current citizenship or residency, Nord wrote.
Wyoming has set itself up particularly well for its own e-residency program, as the legislation passed by the blockchain subcommittee over the last five years — from a 2018 bill authorizing the use of electronic corporate records to a 2021 bill defining corporate digital identity — has created a friendly climate for digital businesses, said Raza Khan, a New York-based information technology entrepreneur.
However, only businesses with physical locations within the state can currently benefit from the state’s policies, Khan said. That’s where e-residency comes in.
“I myself am interested in a number of the policies Wyoming is developing but might not be able to participate given where I am geographically located at a given time,” Khan said. “At the same time, it’s not as though everyone in America can move to Wyoming. I don’t think that’s going to succeed from an infrastructure perspective, despite how beautiful the state is. So I think it creates this interesting opportunity and demand for e-residency.”
Collin Kinniry, an intern for blockchain infrastructure development and research organization Blockchain Commons, said an e-residency program in Wyoming could further the state’s business-friendly reputation by serving companies without a current physical footprint.
“The overarching concern does not need to be bringing physical businesses to Wyoming,” Kinniry said in written comments to the committee. “The well-founded practice of fishing for promising companies to relocate to your state is practical, but it misses the potential of what economic development will become. Physical buildings are no longer necessary for start-ups… E-residency affords the next best companies the chance to hit the ground running through an easy-to-access platform with less bureaucracy.”
Kinniry went on to say some of the e-residents could potentially physically relocate to Wyoming as they grow and expand.
“The companies that evolve and desire physical spaces are already acquainted and bonded with the state of Wyoming,” Kinniry said. “Certainly, Wyoming affords these companies room to grow.”
If the e-residency program moves forward, it would be offered to businesses for a fee, which could increase state revenue. Khan estimated the program could bring in as much as $1.2 billion in revenue to the state.
Beyond the financial incentives, there are other values for implementing an e-residency program, said Christopher Allen, founder of Blockchain Commons. For example, Allen argued e-residents could be beneficial partners to in-state startups.
“If you look purely at the Estonian example, there are real numbers on how their own startup ecosystem has doubled or tripled because of the ease in which other companies and organizations can partner with the emerging startup scene,” Allen said. “The synergetic effect of local, U.S. and international companies working together has had a large impact there.”
No decisions were made during the meeting, and blockchain committee co-chair Sen. Chris Rothfuss, D-Laramie, said there is still much to be discussed and considered as the state looks into the pros and cons of an e-residency program.
“I think this is a very interesting space, and there’s a lot of things to explore,” Rothfuss said. “I’m not entirely sure of all the things we can and can’t do, but we need to figure this out.”