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Draft legislation allows to open a bank account without going to a bank branch

28. April 2016 - 11:07

The Government of Estonia has approved and will forward to the parliament a draft legislation that will allow Estonian residents and e-residents to open bank accounts without visiting a bank branch.

“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.

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 implies that banks will be able to replace the requirement of the applicant being present in person with a person identification process consisting of three stages. Namely, an information technology solution will be used for interviewing 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, the bank will have to further enhance its measures for the prevention of money laundering. 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 on site.  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 is to be performed while the person or their representative is in the same place. Provided that the conditions established by the law are fulfilled, identification by means of information technology solutions will be equivalent to the requirement for person identification on site. The legal and IT solution to be created 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.  

The amendment to the Identity Documents Act is meant to simplify the processing of the e-resident digi-ID. Namely, from now on a person who has had no association with the Estonian state so far will also be able to become an e-resident.

By now, over 10,000 people have applied for e-residency. Applications have arrived from 127 countries, the majority being from Finland, Russia, the US, Ukraine and Italy.

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