Estonian draft legislation will allow e-residents to open a bank account online

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“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,” said Hanno Pevkur, the Minister of the Interior.RTE

According to Kaspar Korjus, e-Residency Program Director, this is an extremely important milestone in the development of the e-
Residency program. “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,” Korjus added.

Taavi Kotka, the 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 that the ability to open an account remotely is a crucial and previously unavailable link in e-Resideny’s virtual business environment. “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,” Kotka noted.

The amendment to the Money Laundering and Terrorist Financing Prevention Act will allow banks to replace the requirement of an in-person meeting with potential customers with a three-stage person identification process. An information technology solution will be used to interview the person, and the interview will be saved. To identify the person, the document issued in Estonia for digital person identification, the personal identification document issued by a foreign state, and the person identification data entered in the database of personal identification documents will be used.

Additionally, banks will have to further enhance their measures for the prevention of money laundering. The first payment to the opened bank account needs to be made from a credit institution or the branch of a foreign credit institution registered in the Estonian commercial register or in a credit institution which has been registered or has its place of business in a contracting state of the European Economic Area or in a country where requirements equal to those provided for in this Act are in force. A more detailed regulation is to be prepared by the Ministry of Finance. Naturally, the bank will retain the right to ask the person to provide an ID if they are applying in-person at a bank branch. The service is meant for any holder of the Estonian ID, digi-ID, or e-resident card.

Currently, the identification of persons participating in a transaction or using a service must be performed while the person or their representative is in the same place with the bank representative. Under the new amendment, provided that conditions established by the law are fulfilled, identification by means of information technology solutions will be equivalent to in person identification. The forthcoming legal and IT solution will, for example, become an even more efficient measure of business relationship monitoring than being in the same place with the person or their representative.

Over 10,000 people have applied for e-Residency. Applications have arrived from 127 countries, with the majority coming from Finland, Russia, the US, Ukraine, Italy, Germany, United Kingdom, Latvia, India and the Netherlands.


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