Tag: Estonia

Whether and what rights the registered place of residence gives?

There is a widespread belief that registration of a residence gives rights to an apartment or house registered as a residence.

However, this is not the case, and simply registering as a residence does not give the right to use the dwelling. In order to use the dwelling, a tenancy agreement must be concluded with the owner and the owner of the property has the right to decide who is registered to live in the apartment or house he owns.

The registration of the place of residence thus has no effect on the property and it is necessary to consult a notary to acquire the property. A property owner is a person who, as the owner, is entered in the land register and only the owner of the property has extensive rights over the property.

However, the registration of a place of residence in the population register has significance for the electoral region, in the distribution of taxes between the state and the local government, and gives the local government the right to receive social services from the city or rural municipality of the registered place of residence. For example, benefits such as a ranch allowance or a funeral allowance and a pensioner living alone are paid on the basis of a registered place of residence, and, for example, residents of Tallinn are entitled to free public transport in the city.

In addition, the correctness of the registered place of residence is also important for the state to enable the planning of social services and infrastructure.

Although registration of residence does not confer rights in private relationships, such as the relationship between a landlord and a tenant, registration gives different rights in relation to the state and local governments.

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An easier and cheaper way to sell a part of a private company?

The buyer and the seller usually go to a notary to sell the share of the private limited company, conclude a sales contract with the notary, and in addition to the purchase price, a notary fee is also paid, which may depend on the price. However, such a way of selling is not the only way to dispose of a share; the law also provides for a simpler and cheaper alternative.

Registration of a share in the ECSD

The shareholder can register the share of the private limited company in the Estonian Central Register of Securities (similarly to the shares of a public limited company, which are automatically registered), after which it is sufficient to sell securities to sell and buy orders to their banks. Although it is sufficient to make securities orders for the disposal of a part, it is advisable to draw up a simple written sales contract specifying the essential terms of the sale.

The registration of the share of a private limited company in the ECSD requires the adoption of the respective resolution of the shareholders / sole shareholder and subsequent submission of the decision together with the respective application and the list of shareholders to the ECSD.

Securities account required

In order to register a share, each shareholder of the private limited company must have a securities account in which his share is transferred. Securities account can be opened at any bank operating in Estonia e. an account manager. In order to open an account, the bank must fill in the necessary documents, the bank employee shall enter the account opening information in the ECSD and archive the basic documents for opening the account. If the shareholder already has a securities account, then obviously it will not be necessary to open a new company for registration in the ECSD and the registration in the ECSD can also be done digitally.

Sale of part of a securities transaction

The transfer of the part from the seller to the buyer shall be effected by giving the relevant securities transaction orders. The seller gives his securities account manager a transaction order, specifying the part to be sold, the type and price of the transaction, and the date of the transaction, and the buyer also gives his securities account manager an order to accept the transaction.

The easier and cheaper way to sell a part of a private limited company – register part in the ECSD. The transaction orders submitted by the seller and the buyer must be in accordance with each other, i. contain the same information as regards the part, the form of the transaction, the price and the date.

There are two types of securities transactions – unpaid transactions and transactions against payment. In the case of a transaction for payment, the money is automatically transferred from the buyer to the seller during the transfer of securities. If the buyer’s bank account does not have enough cash at the time of the transaction, there will be no transfer of securities. In the case of an unpaid transaction, there will be no automatic cash settlement from the buyer to the seller during the securities transfer. If the parties to the transaction have agreed to pay for the securities but make the transfer in the form of payment without payment, they must pay the purchase price as mutually agreed (for example, bank transfer or cash). Traditionally, a transaction is executed against a payment that guarantees the protection of the interests of both parties.

Advantages of selling part through ECRS

Some of the benefits of conducting a sale through the ECSD are legal certainty, flexibility, and cost and time savings. The purchaser of securities registered in the ECSD (eg shares or units) has at least as much legal protection as the purchase of a registered immovable on the basis of an entry in the land register.

As there is no need to go to a notary to transfer the share registered in the ECSD, there is no obligation to pay a notary fee, which, depending on the purchase price, can be a significant saving. At the same time, the transfer of the share registered in the ECSD is not without costs. The share registration fee is EUR 30 + VAT in the ordinary procedure and EUR 100 + VAT in the urgent procedure, the minimum fee for the security is EUR 12 + VAT. In addition, bank charges may apply and a transaction fee will be payable to the bank when selling and transferring securities. In case of sale of a lower value part, the transfer of the share in the ECSD may not be a saving, but in case of sale of a higher value part, the saving may be significant.


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Estonia expanding e-residency scheme

The small European nation of Estonia is looking to expand its global influence through an “e-residency” program, allowing anyone worldwide to apply to become an e-resident of the country and set up a company there.

This would mean that people outside the EU could set up an Estonian company over the internet and gain easy access to the European market. E-residents of the Baltic country have access to all the digital government services of a state that prides itself on being a pioneer of e-government.

E-residency must be applied online. Confirmed applicants will then need to pick up an e-residency card at an embassy or pick-up location which currently is in Beijing or Singapore. But, according to Arnaud Castaignet, the head of international public relations of Estonia’s e-residency program, the country is planning to open an e-residency center in Bangkok soon.

“We are targeting Thailand because it is a major tourism destination and Bangkok is a rising startup hub with amazing co-working spaces,” Mr Castaignet said. “Also Thailand, especially Chiang Mai, is the capital for digital nomads, a group that would greatly benefit from our program.”

The scheme is popular in countries like Ukraine, Russia, and Turkey — places that are adjacent to the EU but not members of the common market.

Mr. Castaignet wants to promote the program in Asia, especially with digital countries looking to find a way to open up operations in Europe. He said many companies maintain registration in their home country and use the Estonian e-registry system to open operations in Europe.

“Many emerging countries lack access to financial services and access to venture capital,” Mr. Castaignet said. “By registering a company in Estonia, startups can gain access to EU funds and accelerator programs.”

Registering as e-resident costs €100 (3,492 baht), while registering a company in Estonia costs €190. So far, 58,000 people from 160 countries have registered as Estonian e-residents, registering 7,000 firms. Registration requires a background check, mainly to ensure the applicant is not involved in funding terror or other serious crimes.

Estonia taxes dividends on registered companies but does not tax any profits invested back into the company. In 2018, Estonia made €10 million from the scheme. This year it expects €15 million.

“The program is not really about earning money for Estonia, but about expanding our soft power, especially in the digital world,” Mr. Castaignet said. “We are only a country of 1.4 million people, and this is a way to make an impact far above our size.”

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How to change the Estonian company name in the Estonian business portal?

From time to time there is a need to change the company name. Everyone knows their own reason why they need to do it.

Whatever the reason for the company name change, you have all the right in the world to do so. Let’s go through the procedure of changing the Estonian company name below.

The name can be changed in the business registry using your e-Residency card and also with Estonian, Latvian, Lithuanian, and Belgium ID-Card with Estonian and Lithuanian Mobile-ID.


  1. You have to go to rik.ee
  2. Log in to the Estonian company portal
  3. Click on the name of your Estonian company
  4. Start the alteration petition

As the first step, you can navigate to the tab called “Business name”, and pick the new company name you want to use.

It’s not bad to check that the new name is usable. Fortunately, the system itself automatically announces whether companies with similar names already exist or whether a trademark is registered under a similar name.

Once this is done, you need to upload some documentation. By scrolling down, you can find the tab called “Add Documents”

You need to upload:

a) The updated articles of association of the company
b) The shareholder decision of the meeting

All the new documents should be digitally signed. Usually, it’s sufficient if one member of the management board signs the document, but sometimes there might be an additional approval required if you’ve added this clause to the representation rights of your company’s articles of association.

How to update the articles of association? 

  1. You can copy the existing AoA which you have in the business registry
  2. Paste it to the Word file
  3. Make the desired name change
  4. Convert it back to the PDF file
  5. Sign it with the e-residency card
  6. Upload the signed documents to the business registry

That’s it.

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Brexit is a mess, but UK startups may find refuge in Estonia’s e-Residency

I’m not going to try to explain Brexit or where it’s headed, because it’ll be outdated before the day is out. It’s a mess no matter what your stance is, and it’s shrouded in uncertainty.

What is clear is that everyone needs to prepare for the worst case scenario. The UK government has tried to come up with solutions to make the breakup easier on the country’s startups, but it hasn’t addressed the biggest issue: losing access to the EU single market. Luckily, Estonia offers a way for the UK to maintain its foothold.

I visited the e-Residency office in the capital city Tallinn, a unique program that lets foreigners register to become ‘e-residents’ of Estonia. “We saw a sharp increase in applications due to Brexit right after Article 50 was triggered,” Arnaud Castaignet, Head of Public Relations for e-Residency, told TNW. “We received more than a thousand emails that week as many people discovered that they had a solution which could potentially help them remain in the EU business environment and single market.”

Estonia currently has 2,651 British e-residents that have set up 312 companies in the country, and 40 of those were established this year. There’s clearly a lot of interest from the UK in Estonia’s e-Residency program, but what exactly does it mean to be an e-resident, and can it really solve UK startups’ Brexit woes?

UK’s lifeline a by product of cutting costs

It doesn’t matter where you’re from or where you’re located, anyone can apply online to become an Estonian e-resident. The whole process takes only a few weeks and if you’re accepted, you’ll get a government-issued digital identity card that gives you online access to all of Estonia’s governmental services in English, such as company formation, banking, payment processing, and taxation.

That sounds… neat? But why is gaining access to governmental services of this Baltic country desirable? Well, first of all, Estonia is at the forefront of digital governance in the world, letting citizens and e-residents sort out bureaucratic stuff in a few clicks, instead of racing between various governmental bodies and dealing with paperwork in person.

The second benefit is probably the most important one for UK startups: Estonia is in the EU. That means the companies you just set up in a few clicks have access to the biggest single market in the world, making it incredibly valuable for entrepreneurs and freelancers. But how do existing UK startups fit in with the e-Residency program, and how can they mitigate the damage that Brexit could deal to their businesses?

“Once you’re an e-resident, in only takes a couple of minutes to create a company,” Castaignet explains. “And the companies created through e-Residency are just like any Estonian company. You have the exact rights to access your physical market.” This means British citizens can found new companies in Estonia and run their EU operations through them.

The funny thing is, what could be a crucial lifeline for UK startups was just a byproduct of the Estonian government cutting costs. After Estonia gained its independence from the Soviet Union in 1991, it was in a hurry to catch up with the Western world in every way. One important step was providing the same level of governmental services, but cheaper, to make up for the country’s small population. So the Estonian government swiftly began adopting new tech and optimizing its services to make them easily accessible.

“Establishing e-Residency didn’t cost much, because it’s not a technological innovation at all,” says Castaignet. “In 2014, the Estonian government simply decided to give access to the infrastructure which already existed for our citizens to the rest of the world. It’s basically a byproduct of a digital society.” Today, this has culminated in one of the most progressive digital governmental environments in the world — and that’s what e-residents get access to with their Estonian ID.

Ethical backdoor

It seems weird that this ‘backdoor’ exists to Europe’s single market, but Castaignet explains that most EU countries already allow non-residents to found companies. It’s just the digitization that sets Estonia apart, which has made it a popular choice for people who need to manage their EU operations on-the-go or outside the union. Other member states also aren’t opposed to Estonia providing this service as it doesn’t affect e-residents’ taxes in their home countries (i.e. not a tax haven), making it an ethical backdoor.

“Every e-resident still pays their personal income tax where they live and corporate taxes need to be paid where the company generates value,” says Castaignet. He adds that some of those taxes do end up in Estonia, but it’s not a particularly impressive sum.

It’s actually all the “indirect benefits” of the e-Residency to Estonia that are the biggest boon, according to Castaignet. When people become e-residents, they might need a virtual secretary, legal advisor, or other business services. To help e-residents out, e-Residency puts them in contact with Estonian companies that can help, boosting the country’s private sector. e-Residency and Estonia’s other digital initiatives also greatly add to the country’s soft power, making Estonia often central in geopolitical discussions on tech.



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