Estonian justice minister seeks to amend commercial law in e-residency's interest
Estonian Minister of Justice Urmas Reinsalu has forwarded a bill to other ministries for consideration which would allow the managing board of a legal entity to be located abroad, thereby legally allowing for the possibility to run an Estonian-registered company from another country.
The aim of the proposed amendment is to make the management of Estonian nonprofit associations and companies more flexible and enable the utilization of modern IT resources, explained Ministry of Justice spokespeople. The amendment would allow foreigners who do not reside in Estonia to make use of Estonian e-solutions, establish legal entities, as well as participate in the management bodies of companies registered in Estonia.
Under current law, the managing board of a legal entity is required to be located in Estonia.
“The requirement that the managing board of a company must always be located in Estonia makes Estonia less attractive to e-residents, which is why we developed this corresponding bill,” explained Reinsalu. “The rules of commercial law must serve economic competitiveness, not impair it.”
The Minister of Justice went on to explain that they had found a working solution which also preserved legal certainty of Estonian commercial law.
“The solution we’ve offered in the bill is that, in situations where the managing board of a legal entity is situated abroad, they will be required to appoint a vetted contact person in Estonia who will have the right to accept declarations of intention and documents addressed to the legal entity,” said Reinsalu.
He went on to note that if a legal entity whose managing body was not located in Estonia did not appoint the required contact person, the Central Commercial Register had the right to initiate its compulsory dissolution.
According to statistics published by e-Estonia.com, as of March 2016, over 9,500 people from 128 countries have applied for e-Residency in Estonia, of which over 9,000 have already been approved and received their digital IDs, and over 400 have registered a new company in Estonia. In addition, statistics showed that more than 830 Estonian companies in total had at least one e-resident owner or board member.