The institute focused on making data exchange between the two countries significantly more effective will be headquartered in Tallinn.

The agreement on the establishment of the nonprofit association was signed by Estonian Minister of Entrepreneurship and Information Technology Urve Palo and Deputy Secretary General of the Finnish Ministry of Finance Anna-Maija Karjalainen, spokespeople for the Ministry of Economic Affairs and Communications said.

Cooperation with Finland also demonstrates to other EU member states that the exchange of information between different countries is accomplishable, Palo said in a press release. "Estonia and Finland have been successfully cooperating in the ICT field, exchanged data across the boarder and prepared for developing a common X-Road for some time already," she noted.

"While Estonia's ICT success story got its start from us adopting the Finns' ID card, now it is the Finns' turn to speed up the development of e-services by means of X-Road," Palo said. "With this we are taking a large step forward in the common development of X-Road and the cross-border exchange of data."

Cross-border cooperation will make developing X-Road cheaper for Estonia in the future, as NIIS will be financed from the respective budgets of both countries. €920,500 is the size of the membership fee agreed upon for 2017.

The purpose of the new institution is to ensure the quality and sustainability of the e-government infrastructure and functioning of international cooperation. X-Road is one of the most important mainstays of e-government in Estonia, whose correct and sustainable operation ensures the functioning of the national information system.

About 1,000 institutions in Estonia exchange data via X-Road and one of its visible outputs is the data that can be accessed via the eesti.ee portal.