The initiative for the change came largely from the Estonian Ministry of Culture, which channels public funding from the state budget to the Foundation. Preparations for reform were initiated by the Ministry over a year ago when it commissioned a white paper for future national film policies.

The new Institute will have four divisions, with international marketing and development projects receiving a much more prominent role. A call for recruiting the director for the Institute is expected to go out soon. The overall budget of the Institute will remain on a par with the present funding of the Film Foundation, with a small one-off increase to facilitate the reform in 2013.

Although the statutes of the new Film Institute were recently approved, it remains unclear what the reform will entail for production regulations, a pivotal topic for producers.