E-Residency in Estonia, Part I | Hacker News Reader

E-Residency in Estonia, Part I

lawfareblog.com

68 pointstadasv22 comments

Toomas Hendrick Ilves, the current Estonian President, represents a cybersecurity expert. Things like that can mean a big deal, with respect to policy.

I lived next door, in Riga, Latvia, for several months, in late 1997; during that time, we visited the beautiful city of Tallinn: https://en.wikipedia.org/wiki/Tallinn . Definitely worth the trip.

Talinn is a beautiful city. It feels a bit Scandinavian, but newer, smaller, friendlier, more optimistic, less rich but faster growing.

I went to Tallinn recently! Beautiful city with a wonderful medieval old town neighbourhood. I second that it is worth the trip, plus you can take a boat to Finland and visit Helsinki :)

In every EU country digital signatures have the same validity as physical signatures since a long time (Directive 1999/93/EC). Most company filings are submitted electronically. Every state keeps a list of certified identification providers, which are mutually recognised. This list usually includes some government agencies, the national post service, sometimes banks, professional associations, chambers of commerce, and other private providers. The identification device is either a smartcard or an RSA dongle. The smartcard can be also used as PKI certificate for remote logine, S/MIME signatures, etc.

What is so special about the Estonian programme?

> What is so special about the Estonian programme?

They actually use it.

They've had this in Sweden for like 10 years. It's all pretty clunky, even though you can now use an app instead. You generally have to have your card, then some plug-in, then the host have to implement the whole thing. Usually signing things isn't the whole story either, so you still have to deal with e.g. payments.

The Estonian system is probably better, since it's newer, but the challenge isn't really in handing out cards. It's standardizing authentication on the Internet and connecting that to whatever else matters.

That's the trick, all Estonian government services + all private services which benefit from strong authentication or authorization have implemented the ID-card log in and signature functionality to their services/apps/websites.

So whether I send 5€ to my mother, or I sell my car to a stranger on other side of the country, or I submit my yearly tax data, or I complete my 1 000 000 € M&A deal, I use my digital identity (PKI infrastructure) to sign the transaction.

The physical ID-card itself is not the most user friendly token in this Estonian infrastructure (requires the reader + op system drivers/soft). The alternative token is Mobile-ID, where the same PKI infrastructure is deployed onto my phone SIM card and I use my mobile device to authenticate / authorize my transactions. At the moment this only works with certified Estonian carriers but in 2016 the next generation of mobile support should make this channel usable over the whole world.

Don't get me wrong that's all good and well, but it's still 15 year old technology being implemented and not a paradigm shift. Most of the time you're still going to be typing in your e-mail, postal address and credit card number when doing things online. It's not like you swipe your card once for logging in to you computer and then when buying some service online to verify the setting up a subscription payment and having all your data at the provider encrypted with your identity.

Signing anything in Estonia (at least in tech, where i work), is always done digitally.

Is it also common for B2C or person to person transactions?

Yes... everybody is using ID-cards here to sign docs and to sign-in online.

Can I and if I can, how easy it is to get e-residency, open bank account and form a company from abroad (I am from Serbia)? Anyone with such an experience and using such company for a startup?

Ars Technica did an article on this earlier this year: http://arstechnica.com/business/2015/08/im-now-an-estonian-e...

Getting e-residency is pretty easy. You would have to pick up your ID card, and residency package, at one of the authorized locations, though, and there is none is Serbia. I think the closest may be the Estonian consulate in Vienna. But, if you are going to travel, it may be more worthwhile to go to Tallinn.

Once you have e-residency (which takes a few weeks to be granted) opening a company can be done in a day. You will need an official address in Estonia, but there are several companies that offer that service. I used LeapIn, whose prices are very reasonable. They can also take care of your accounting.

Opening a bank account requires you to visit the bank in person (another reason why traveling to Tallinn is worthwhile). It is not guaranteed that they will open the account for you. I visited two banks. The first turned me down because I could not prove sufficient ties to Estonia. Swedbank (one the the three largest banks operating in Estonia) did accept me. They have a very good service. LeapIn was very helpful in setting this up too. Please note that Estonia is working on making the bank account opening process easier later this year (I believe it will make it possible for you to open an account from abroad; but it is not there yet, as far as I know).

Thanks for the answer. I have seen this "The first turned me down because I could not prove sufficient ties to Estonia." on some other place as a reason for a turn down. What they actually need to prove ties to Estonia when you are only e-citizen? Or that other bank that accepted you is not requesting such proof? If you have income with that company, how hard and costly is to take that money (as I understood they tax only when you pay income from the company to you).

For tax questions, there aren't simple answers that would apply for everybody. It depends on where do you have your personal tax residency, do you travel, your health care/insurance/pension situation, etc. The tax rules for people who live and work outside of Estonia (for most of the year) are simple on the Estonian side, but you have to include the rules on your person tax residency side also. For a more personalized answer visit us at https://www.leapin.eu and send us an email please.

The proof of your links to Estonia is really up to the bank. They each have their own policy. I think, in my case, it helped that LeapIN was there with me. A local business partner who speaks the language and is there with you for support, I think is an advantage anywhere.

If your company is a foreign-operated LLC (OÜ), which is what I opened, and what was recommended to me (I have no employees and reside in another EU country) then the only taxes are VAT, and dividend tax, which is incurred when dividend is paid out. There is no income tax.

Note that the dividend tax liability is of the company making the payment, not of the individual receiving the payment. So, even if there was a taxation treaty between Estonia and Serbia to avoid double taxation, you personally may still be liable for dividend tax in Serbia, if Serbia taxes foreign dividend income. But, here comes the usual disclaimer: I am not a lawyer or an accountant. You'd better check with one!

Thank you edko for recommending LeapIN! We appreciate it alot!

Does anyone know if they will take a US DL, or do you pretty much need a passport? Their form has an option for "other ID" but I'm skeptical that a drivers license is adaquate.

Otherwise there's a consulate in NYC so it would be easy to pick up :)

You need to present a legal travel document (passport or ID-card), driver license won't do as mentioned in an update to the original article.

I applied for this about a year ago and actually got approved. I was instructed to go to their New York embassy to pick it up but I live in SF. I wish they would mail it in or were okay with it being picked up at other consulates/embassies.

I'm afraid there's a fingerprinting requirement

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