Estonian government approves draft legislation to allow remote opening of bank accounts

By on 04/05/2016
Kaspar Korjus, Estonia's e-Residency programme director

The government of Estonia has approved draft legislation to allow e-residents to open Estonian bank accounts remotely.

Under current law, people can already obtain Estonian e-residency and open and run Estonian businesses from anywhere in the world.

But running a company with a legal basis in Estonia requires an account with an Estonian bank, and banks are legally obliged to identify new clients as part of at least one face-to-face meeting.

The new proposed amendment to the Money Laundering and Terrorist Financing Prevention Act, submitted to Estonia’s parliament last week, replaces the requirement on banks to interview new customers in person with a new digital “three-stage identification process.”

“Provided that conditions established by the law are fulfilled, identification by means of information technology solutions will be equivalent to in-person identification,” a government spokesperson said.

Banks will also be required to “further enhance their measures for the prevention of money laundering.”

More detailed regulation will prepared by the Ministry of Finance in due course.

Kaspar Korjus, e-Residency programme director, said this step is an extremely important milestone in the development of the e-Residency programme.

He said: “The planned amendments will facilitate a business environment in which an individual’s intentions are more important than his or her origin or location.

“The number of people applying for e-Residency during the beta phase has already exceeded initial plans; I believe that after the adoption of the changes, we will truly be able to unleash the world’s entrepreneurial potential.”

Since the programme was launched  in December 2014, almost 10,000 people from more than 100 countries including Finland, Russia, the US, Ukraine, Italy, Germany, United Kingdom, Latvia, India and the Netherlands, have become e-Residents.

To cope with growing demand, the government doubled the application fee from €50 (US$ 54.50) to €100 (US$109) in February.

Hanno Pevkur, the minister of the interior, said: “We would like to keep up with the times and make opening a bank account simpler and faster, while still ensuring that we maintain the necessary level of security.

“As technological solutions for remote person identification have been around for quite a while, it is sensible to allow them to be used for opening bank accounts.

“At this point I would especially like to thank all our private sector partners for their substantial contribution to the agreement on the draft legislation principles.”

Taavi Kotka, deputy secretary general for communications and state information systems in the Ministry of Economic Affairs and Communications and the head of the e-Residency Council, said: “Until now an e-resident entrepreneur had to come to Estonia to open a bank account. The proposed amendment will give e-residents the ability to open a bank account and start a business without coming to Estonia.”

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See also:

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About Winnie Agbonlahor

Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.

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