With an Estonian digital residency you can start a business, open a bank account or vote online anywhere in the world, all with the business benefits of the EU. “Given where things are going with the US’ NSA…I think this could be a starting point for people who don’t trust their own governments,”

by Hal Hodson /http://www.newscientist.com/

ESTONIA flung open its digital borders last week. The eastern European country invited anyone, anywhere, to open a bank account or start a business. By the end of the year, anyone with an internet connection will be able to live their financial life in Estonia, all without being physically present.

Such e-residency, as it is known, is a step towards a world where a person’s online identity matters just as much as their offline identity; where the location of data, rather than documents, is more important.

“This is the beginning of the erosion of the classic nation state hegemony,” says John Clippinger, a digital identity researcher at the Massachusetts Institute of Technology. “It’s going to get whittled away from the margins.”

Max Ischenko – a Ukrainian entrepreneur who runs a job site called Djinni – is signing up. “It’s very complicated to do business from Ukraine,” he says. “For instance, I can’t sign up for Paypal Business payments, because it’s not available.”

Crucially, Estonia offers firms a foothold in the European Union single market. Taavi Kotka, the Estonian government’s chief information officer, says they are aiming to have 10 million non-Estonian e-residents signed up by 2025. More than 4000 are already lining up.

Getting e-residency in Estonia will require going there to have your identity verified – and fingerprints and face biometrics taken by border police. But Kotka says they are working on letting people sign up at Estonian embassies. For Estonia, embassies will no longer just be about extending the country’s physical presence into other countries – but about extending their digital reach too.

E-residents don’t get citizenship in the traditional sense – they can’t apply for passports and visas, or vote in elections. But Kotka acknowledges that if all goes as planned, the new cohort of e-Estonians will have to have a say in any future changes to the country’s corporate tax structures, for instance, and perhaps more.

Estonia already has the world’s most advanced internet voting system – votes were cast online by Estonians living in 98 different countries in elections earlier this spring. Kotka says they could easily extend the system to let e-residents vote from anywhere in the world.

Clippinger thinks Estonia’s move will create a market in which countries compete for digital citizenry. More flexible rules on starting businesses around the world may open the door to more fluid livelihoods – our homes may be in one country while our job and bank accounts are in another. This is already happening to an extent, but programmes like Estonia’s promise to accelerate the trend.

Nor is it all business. “Given where things are going with the US National Security Agency, backdoors and control over personal data, I think this could be a starting point for people who don’t trust their own governments,” Clippinger says.