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Estonian E-Residency Eases Red Tape For Foreigners

Edward Lucas from "The Economist" has just become Estonia's first e-resident.

Edward Lucas from "The Economist" has just become Estonia's first e-resident.

Two decades after the Internet went mainstream in the West, setting up a business abroad often still requires at least a limited physical presence in the destination country and can include layers of paperwork.

That may change if a new model launched by Estonia on December 1 catches on.

When Estonian President Toomas Hendrik Ilves handed British journalist Edward Lucas the world's first ever e-residency card this week, he in effect gave "The Economist" senior editor the ability to conduct business in Estonia completely virtually.

E-residency, which Estonian officials say more than 10,000 people have applied for, is not quite like a physical presence in the country, but that may be just the point.

The card comes with a microchip that provides online authentication for public and private Estonian services like online banking and business registration and a digital signature -- legally binding in the EU -- that is authenticated with a user's unique pin code.

The system also allows cardholders to send encrypted emails to one another.

In an interview with Estonian Public Broadcasting, Lucas said he will consider moving a freelancing company he runs with his wife to Estonia, but that he is most looking forward to the practical benefits.

"Anything we do online, we need increasingly digital signatures and this will give a chance to have a digital signature issued by a government in a way that isn't actually possible at the moment in Britain," he said.

A Baltic state of some 1.3 million people, Estonia has built a reputation for being in the digital vanguard -- it is home to Skype and its residents can pay taxes, vote, and acquire health services using their own digital identification cards.

Gareth Niblett, a British security and privacy compliance consultant who is working on restoring an 18th-century manor in Estonia, told RFE/RL that the country's digital ID system makes doing business easier.

"If I have to sign a contract with someone, I don't have to appear in their office or sign a piece of paper that I have to fax or post. It's instantaneous," Niblett said. "It also means that if multiple parties have to sign something, they can all sign a letter or a contract or an agreement [digitally], and they can all be held to it."

The card has not completely eliminated the physical world of bureaucracy.

Until next spring, when Estonian embassies and consulates are expected to be ready to provide e-residency services, applicants will need to drop off documentation and pick up their cards from police and border control offices.

-- Glenn Kates