Insolvency is a situation where a natural or legal person is unable to pay their debts.

Head of the Insolvency Service Signe Viimsalu wrote that creditors missed out on more than €50 million in the first half of the year due to 126 assetless insolvent companies.

Last year, there were 192 such companies over the entire year, and creditors were owed €74 million. This was a 52 percent increase from 2024.

Viimsalu said: "That widespread insolvency could cause economic, social and institutional uncertainty and pose a threat to Estonia's internal security."

In 2025, the Unemployment Insurance Fund paid more than €1 million in annual compensation to employees of assetless companies. Viimsalu noted that under current law, the Unemployment Insurance Fund cannot recover this money from the managers of companies that have made serious management errors.

The letter stated that creditors currently lose around €400,000 per assetless insolvent company. Three years ago, this figure was less than €100,000. In most cases, creditors can no longer recover this money.

She added that creditors do not file bankruptcy petitions because the state fee is €420. In addition, temporary administrators request an average of €4,700 through courts as a deposit for bankruptcy proceedings.

Viimsalu also drew attention to the fact that 35,720 companies, or 12.5 percent, have still not submitted their 2024 annual reports. Nearly 82,000 companies, or 27 percent, have not submitted their 2025 annual reports.

If a company does not submit its report, the state cannot know how it is doing financially. In that case, a company in difficulty may not reach bankruptcy proceedings either, and the actual statistics and overview of bankrupt companies remain incomplete.

According to Viimsalu, the insolvency service estimates that there is nearly €18 billion worth of latent insolvency in Estonia's business landscape. This does not include indebted private individuals, whose debts courts are cancelling on a mass scale.

"Therefore, money is not being received into the state budget," Viimsalu noted.

She said that there is currently no clearly designated party in Estonia responsible for preventing and managing risks occurring in the country's business landscape and dealing with people's insolvency.

Viimsalu asked the prime minister to convene a government meeting to discuss this issue.

Lysandra Suursaar, communications adviser at the Government Office, responded to an ERR inquiry that the substantive processing of the letter is still ongoing, and therefore they do not yet have answers to the questions raised by Viimsalu.

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