MyFondia VirtualLawyer
December 4, 2014

e-Residency of Estonia

The revolutionary Estonian idea of providing people outside Estonia a possibility to digitally become a part of the country's community is available from 1 December 2014. What does the concept of e-residency mean, after all, and how can one become an e-Estonian?

To start with, what the e-residency gives to a person is essentially an access to Estonian e-services like e-Business Register and e-Tax Board as well as lets people to sign documents digitally. All this is currently available only to the physical residents of Estonia. A private sector example of its usage could be brought from internet banking which is already in place for the residents via ID-card. In addition to that, it is yet to be seen which services software creators will think of developing using e-residency as identification.

Based on the changes in legislation, e-residency will function as a benefit, not a right, which further guarantees the trustworthiness of it as it is legally backed and monitored by the Estonian state. The state has a quite wide discretion in deciding to whom it gives the e-residency and from whom it takes the status away. Legal-wise it works similarly to a visa. However, e-residency and the physical card that you will get when registering, does not serve as identification or travel document in real world, thus, it does not give you, for instance, the right to enter Estonia. It only functions in e-Estonia.

How to become an e-Estonian? Firstly, you need to apply for it at the Estonian police authority (later, presumably during 2015, also at the embassies) for which you need to travel to Estonia – personal presence is necessary both for the application (e.g. fingerprints and face detection) and later for getting the card and its reader.

In the meantime, administrative authorities carry out a background check and the outcome of it, i.e. data gathered, will remain confidential no matter what the decision will be. The burden of proof in every aspect of the process is on the applicant, which is in accordance with the general concept of e-residency. The procedure as a whole is considered to take around ten days.

A notice has to be taken that not everyone is granted an e-residency. For acquiring e-residency, one has to have a link with Estonia or a legitimate interest in using Estonian e-services. The issuing of the card proving e-residency is declined (or may be declined regarding last two elements) when:

• the person threatens the public order or state security; • the application is related to economic activities and there is a ground for denying economic activity; • the person is not sufficiently identified or there is a reason to doubt about the identity of the person; • there is a ground for denying a visa or a temporary residence permit or the person's entry into the country; • issuing of the document is not in line with the aim of e-residency (i.e. promotion of Estonian economy, science, education or culture).

Once the application is denied, a person may apply again only when the circumstances have been substantially changed, meaning that there is a new situation. Obviously, there are possibilities to challenge the initial negative decision in court.

The state fee for application is 50€ for which you get the e-residency card, certificates and a card reader. It needs to be understood that transactions or any other deals done via e-Estonian virtual environment do not mean that Estonian law will definitely be applied to it. Furthermore, Estonia cannot take the responsibility for any illegal behaviour of an e-resident.

The scope of the service is meant to have a broader effect than only in Estonia. Namely, when relevant EU legislation starts to fully function, the member states have to, inter alia, mutually accept the identification services of other member states which means that e-residents of Estonia gain access to available EU services, too. Additionally, global service providers may use e-residency as an identification option for their platforms (internet banks, self-service environments).

In conclusion, Estonian e-residency is really innovative and it definitely is a big thing. Surely, not all the implementation areas are currently known, but it is a strong start and it is up to the e-residents also to develop this system further.

For further assistance, please contact our Tallinn office and Kristjan Aruoja (kristjan.aruoja@fondia.com).