Setting up the data embassy in Luxembourg is necessary to guarantee the continuity of the Estonian state, increase the security of Estonia's digital society and improve the quality of storing data. It was also said that Luxembourg has high security data centers and the country is ready to guarantee the inviolability of Estonia's data and information systems.

Estonia's Minister of Entrepreneurship and Information Technology Urve Palo (SDE) and Luxembourg's Interior Minister Dan Kersch last October signed a rental agreement on data embassies that creates the conditions for the Estonian data embassy in Luxembourg to start work this year. With the rental agreement a more detailed agreement was made as regards the technical requirements and financial obligations related to the hosting of Estonian data and information systems in Luxembourg's high security national data center.

The concept as a whole is novel and as far as is known, no such national data hosting systems have been implemented yet. This is not a diplomatic representation, for which privileges and immunity similar to those of embassies will be applied to.

The relevant agreement was signed by Estonian Prime Minister Jüri Ratas (Center) and Prime Minister of Luxembourg Xavier Bettel on June 20, 2017 in Luxembourg. The document needs to be ratified in the Estonian parliament. Luxembourg has already ratified it.

This is a novel solution in international communication and the signing of this agreement created a precedent also in international law.

The Estonian data embassy in Luxembourg will cost approximately €2.2 million to set up and maintain over a period of five years. Establishment of the embassy will cost one million euros, to which €236,000 on average in rental and data communication costs will add every year. 85 percent of the funding will come from the European Regional Development Fund, and 15 percent out of the budget of the government.

Construction of the data embassy is expected to be completed in June 2018.