E-residency in Estonia for entrepreneurs

E-residency: explanations about the functioning of e-residency in Estonia

From December of this year foreigners are able to apply for the digital identity card of an e-resident of Estonia without an Estonian habitual residence. A digital identity card (digital-ID) allows to use Estonian public and private services, provide digital signatures to documents and encrypt files with a chip card similar to the Estonian ID card. In the following article 1Office will explain to its clients matters to do with e-residency and encourage applying for e-residency to engage in enterprise in Estonia.

What is e-residency?

According to the Identity Documents Act coming into force 1 December 2014 a person who is neither an Estonian citizen nor a foreign resident of Estonia can be given a digital ID. Foreigners need digital identification of their person in public or private e-administration. So far for a foreigner living in Estonia on the basis of a residence permit or right of residence it was only possible on proving their Estonian residence. The validity of the digital ID and its certificates is three years. Before digital ID was available to residents for parallel use with the ID card as an additional card.

How does the e-resident’s digital ID differ from the Estonian ID card?

E-residency

The e-resident’s digital ID is a chip card similar to the Estonian ID card, which is usable only in a digital environment for identifying a person and providing a digital signature. With the support of certificates on the chip card it is possible to identify your person and provide a digital signature in an electronic environment. As the document is not usable for visual identification nor travelling, a photo of the user will not be put on it.

Why is e-residency useful?

E-residency is useful for entrepreneurs, foreign workers, members of the governing bodies of companies operating in Estonia or people holding interest in Estonian companies for electronic identification and access to e-services. The purpose of issuing a digital ID to an e-resident is to promote Estonian economic growth by creating an opportunity to use Estonian e-services in a secure way. So far non-residents have had access to certain e-services by pin-calculators of banks and without the ability of providing a digital signature. Immediately on the law coming into force e-residents can use the Estonian commercial register and the eesti.ee state portal for administration in English with the help of the DigiDoc digital signature software. For other environments translating and adjusting is still taking place.

What is the legal position of an e-resident in Estonia?

E-residency is similar to the legal position of a foreigner in its nature. If a foreigner does not have a right to stay in Estonia, he does also not have a right to apply for e-residency. Insofar as the Estonian e-residency gives a foreigner the opportunities for operating in the Estonian judicial area then the same principles, which are applied when deciding giving foreigners a visa or residence permit, are applied when issuing the digital ID of an e-resident.

What are the prerequisites of becoming an e-resident?

An e-resident’s digital ID may be issued to a person, who has a connection with the Estonian state or a justified interest to use the Estonian e-services. The issuing of the digital ID is decided by the Estonian Police and Border Guard Board and the refusal to issue does not have to be reasoned and cannot be challenged in court. On issuing the digital ID the reliability of the e-resident will be checked from all available sources. Follow-up inspections will also be made during the validity of the document. Monitoring of the use of the digital ID of the e-resident will be carried out by the Police and Border Guard Board, Estonian Internal Security Service and the Estonian Tax and Customs Board.

How does applying for e-residency work?

The digital IDs of the e-resident will be issued in two stages – first the Police and Border Guard Board will be issuing them and thereafter the expansion of the service places to the Estonian embassies will be considered. On the first application for a digital ID, to identify their person the applicant must go to the service point of the Estonian Police and Border Guard Board twice, first to submit the application and later to receive the document. The applicant will be identified on the basis of a travel document of their country of nationality. In addition the applicant’s face biometrics and finger prints. Biometric data will prevent the creation of several identities for a person. A state fee of 50 euros must be paid for the review of the application of the issue of an e-resident’s digital ID.

How much time does it take to get e-residency?

It takes ten working days to review an e-resident’s digital ID application. In the course of processing the application an Estonian personal identification code will be issued to the applicant, if they did not have the Estonian personal identification code before. If the applicant corresponds to the necessary conditions for receiving e-residency and the person passes the background check, the digital ID will be issued to the applicant in the service point together with the directions and card reader necessary for its use.

Is the e-resident’s access to e-services similar to the resident’s access with an ID card?

A provider of a public or private service may decide about providing a service to an e-resident on the basis of a digital ID, limit the provision of the service or availability in the extent of the content of the service, extent, as well as the number of people with access or prescribe additional requirements for gaining access to the service, including demand the submission of additional data and documents or personal appearance in the location of the service provider. The main question is whether the requirement to attend once will arise for the e-residents for gaining access to the e-Tax Board and bank account.

What is an Estonian digital signature?

The Digital Signature Act (DAS) came to force in Estonia on 15 December 2000. In Estonia a digital signature has the same legal consequences as a hand-written signature if those consequences have not been limited by law. Outside the Estonian jurisdiction a digital signature is valid only if the parties are ready to accept it. There are 2 certificates on the digital ID chip, one certificate is meant for identifying the person and the other for providing a digital signature. The certificate is an electronic certificate, which ties the person and the data necessary for certifying the person and the authenticity of the digital signature with the person and confirm the identification of the person.

How is the validity of the digital signatures checked?

A digital signature is only possible to be given with a valid certificate. After giving he certificate the software used for giving the signature will contact the server of the certification centre and check whether the certificate is valid – if it is, the server of the certification centre will issue a special certificate, which will be added to the signature.

Does the digital ID of an e-resident provide access to encrypting services?

The digital ID also allows files to be encrypted. Encryption is mainly meant for sending files over the Internet, not for their long-term storage. For decrypting files a secret key, which exists only on the ID card of the user, corresponding to a public key in the authentication certificate is needed. In case the user loses their ID card or renews certificates the decryption of files will no longer be possible.

Can the Estonian digital signature be used in other Member States of the European Union?

The regulation on electronic identity and trust services No. 910/2014 (eIDAS) has been passed in the European Union. On the basis of it from 2016 all Member States must mutually recognise the digital signatures of other countries and from 2018 the digital identity, allowing access with the digital identity cards of other countries. The possibility to provide a digital signature and securely identify yourself on the internet with an ID card is available in several EU Member States in addition to Estonia, for example in Austria, Belgium, Spain, Latvia, Finland and elsewhere. A problem however is that mostly the countries do not mutually recognise these and in case of cross-border services everything still happens on paper.

How to become an e-resident?

Register yourself here http://e-estonia.com/e-residents/apply/ to receive advance information. From December you can turn to the service points of the Police and Border Guard Board to apply for e-residency. To receive additional information and help please turn to the customer service of 1Office Estonia on the phone number +372 631 1118 or write to contact@1office.ee.

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