On 1 January 2019, changes to the Commercial Code came into force, intended to resolve a few problems that have reared their heads in practice.
Previously, in order to be registered as a company under ordinary procedure, it was required to open an account with an Estonian credit institution. However, Estonian non-residents had significant trouble doing so, because credit institutions found it hard to comply with know-your-client requirements in regard to non-resident clients. This led to a situation where foreign-based persons preferred to start their company in some other country in order to sidestep the obstacle.
Account does not have to opened at an Estonian credit institution
In practice, companies have the possibility of opening and using payment accounts in a foreign country and indeed this is a common path taken when it comes to cross-border business activity. Starting on 1 January 2019, it is allowed to use an account with any credit institution or payment institution founded in a European Economic Area country or a branch of such an institution. The change also includes the option of making contributions to a payment account opened in one of the abovementioned payment and credit institution or branches for the purpose of increasing the company’s share capital.
However, the change in legislation does not impose an unconditional obligation on Estonian or foreign credit or payment institutions to open an account for all applicants. The credit or payment institution retains decision-making power on the opening of the account.
State fee no longer charged for entering contact details in Commercial Register
As the other significant change, legislation now exempts businesses of having to pay a state fee for entering and changing email address in the Commercial Register. In the past, 18 euros was charged for a change to an email address.
Simultaneously with the amendment to the Commercial Code, an amendment to the State Fees Act also entered into force, abolishing the state fee for entering and changing email addresses of entrepreneurs, companies and contact persons. Already under current law, state fees were not charged for automated changes to email addresses following submission of annual report.
The email addresses of companies, entrepreneurs and contact persons may also change at other times. The accuracy of contact details for a company in the Commercial Register is important for communication between the register and the entrepreneurs, company and contact person, and also for delivering procedural documents and for the company’s relations with third parties. To keep the company-related email addresses entered into the Commercial Register current and keep companies from delaying updating their email addresses until the filing of annual reports, the state fee has now been waived for all changes to email addresses.