The Estonian president says the dearth of “particular situations” for tech giants has allowed native startups to thrive

Bolt CEO Markus Villig speaks on stage at the Web Summit 2019 technology conference in Lisbon, Portugal.

Horacio Villalobos | Corbis via Getty Images

Estonia’s tech companies could thrive without large multinational corporations like Facebook and Microsoft, the country’s president told CNBC.

Estonian founders, home to just over a million people, have spawned several billion-dollar tech companies. Skype, which was sold to eBay and then to Microsoft, is the best known, while others include the recently listed currency exchange app Wise and the mobility app Bolt, backed by Silicon Valley VC heavyweight Sequoia.

President Kersti Kaljulaid said multinational corporations have traditionally set their foreign headquarters in countries with generous tax systems, adding that Estonia has never been a tax haven.

Facebook, Google and Apple all employ thousands of people at their European headquarters in Ireland, where corporate tax is 12.5%. In Estonia it is 20%. The tech giants also employ thousands of people in other European countries, including the UK and Switzerland, but they have no significant presence in Estonia.

“Estonia is a country that has never offered any company special offers or special treatment,” Kaljulaid said in an exclusive interview last week. “When I was advising the Prime Minister 20 years ago everyone would come and ask what your special conditions are? We didn’t say any and I think it served us well.”

She added, “This could probably be one of the reasons why Estonia has so many homegrown startups that you now see unicorns more often.”

Estonia has earned a reputation for being one of the most technology-friendly countries in the world, with the government shifting many processes online well ahead of other nations. For example, it has accepted online voting and digital IDs, and free WiFi is widespread across the country.

Kaljulaid said the country’s leaders want to ensure that Estonia’s legal space is safe but permissive to new technologies like Starship Technologies’ grocery delivery robots set up by Skype co-founder Janus Friis.

Kaljulaid said the country’s entrepreneurs and programmers had educated politicians about the technologies that are poised to change the world.

For example, Skype co-founder Jaan Tallinn taught her and others all about artificial intelligence.

“In Estonia he has [Tallinn] is known as someone who warns and informs us, “she said.” He’s worried, but not unnecessary.

Tallinn told CNBC that it has a major concern when it comes to AI.

“AI is still pretty domain specific and fragile,” he said. “The only major concern I have is that countries will start using more AI in a military context.”

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