New possibilities and new requirements for managers of Estonian companies
The new year brings even more options for those interested in doing business in Estonia. An important change in development of the business sector is that management of legal persons registered in Estonia from a foreign country is now an option from the 15th of January.
Previously, the requirement was that management board members of an Estonian company be located in Estonia on the basis that they should be where daily management is carried out.
From 15 January this requirement is abolished from the Commercial Code, so that a management board can be located abroad. The main purpose of the amendment is to create a more flexible but at the same time secure business environment. This involves following several legal rules.
Under the new regulation, if the management board (or a substitute body) is located abroad, a contact person in Estonia must be designated and authorized to receive declarations of intent and procedural documents addressed to the company. The contact person must be someone who meets the highest reliability requirements, such as a notary or notary’s office, an advocate, a law firm, a sworn auditor, or an audit firm. The name, personal identification code or registry code, Estonian address and e-mail address of the contact person must be filed with the commercial register. Failure to meet these requirements may lead to dissolution of the company.
The possibility of managing a company from abroad combined with innovative opportunities such as e-residency and electronic access to resources make Estonia attractive for international business.
These changes do not impact companies working in the financial sphere, which have to meet stricter requirements and cannot be managed from abroad.