The Legal Affairs Committee decided on Tuesday to initiate a bill which would simplify the ability of foreign investors to invest into start-ups.
The bill's authors believe this will improve the attractiveness of the Estonian business environment.
The Chairman of the Legal Affairs Committee Jaanus Karilaid said that the amendment should help to avoid situations where foreign investors decide not to invest into Estonia because transactions with a private limited company are simply too complicated and costly.
"Compared to our neighbours, we have too much red tape. A busy foreign investor might not find the time to come and sign a document at a notary's office in Estonia. This is why we are legislating for the option to do it from a distance if all the partners agree," Karilaid explained.
Member of the Committee Kaja Kallas said that the cumbersome nature of the current system is to blame for many transactions going to our neighbouring countries instead.
"Rigid formal restrictions have set massive obstacles on the path of fledgling companies, and this money is lost for Estonia. The amendments will increase the attractiveness and competitiveness of Estonian limited companies as a form of enterprise in the European Union," Kallas said.
The amendment would enable shareholders of private limited companies to opt for unattested written forms that did not require notarial authentication to conclude certain disposal transactions. These amendments were already planned with the review of the company law prepared by the Ministry of Justice, but as these are seen more urgent, the goal is to enforce these much earlier.
The bill is a response to the request of the Estonian start-up community to resolve the situation where Estonia loses millions of euros worth of investments because these are never made here in the first place, or are withdrawn from here.
Editor: Helen Wright