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Some new opportunities and obligations for undertakings in 2020

Every new calendar year often brings along changes for people and enterprises in laws regulating their activities. This will also be the case in 2020. This article sets out some of the amendments to law that have an impact on undertakings and have entered or are entering into force in the first half of 2020. The amendments to law highlighted below have been included in the article, keeping in mind the administrative burden of enterprises and the current topical issue of money laundering prevention.

Taking into account the international nature of business activities and the image of Estonia as an e-state today, since 1 February 2020 the Estonian legislature has created an opportunity for concluding abroad some transactions, which require notarised form and could earlier be concluded only while being present at a notary of Estonia. Remote authentication can be carried out via a video bridge in foreign missions of the Republic of Estonia and remote authentication requires the existence of a valid ID card of Estonia or a digital ID of an e-resident. From now on, remote authentication allows concluding abroad such transactions requiring notarised form as for example transfer of a share of a private limited company, authentication of powers of attorney and transactions constituting an obligation to pledge and a disposition. Remote authentication is, however, not mandatory, but an additional opportunity for Estonians residing abroad and for e-residents in order to avoid the transport expenses that travelling to a notary to Estonia involves.

In addition, on 1 January 2020 a requirement entered into force, pursuant to which the commercial register accepts only such foreign language documents which have been translated to Estonian by a sworn translator, i.e. the service of a sworn translator will be mandatory in the future. Taking into account the fact that earlier the commercial register also accepted foreign documents with a translation certified by a notary, the options regarding the translation service narrowed for undertakings to some extent.

If the foregoing amendments to law are rather of an administrative nature for enterprises, the following amendment has a direct impact on the possible business activities of an enterprise. The Estonian legislature has namely considered it necessary to tighten the terms and conditions of authorisation of a virtual currency service provider and a virtual currency wallet service provider for enterprises engaged in virtual currencies who want to operate on the Estonian market. The reason for the tightening is reinforcing the prevention of money laundering and terrorism and the fact that the area of activity of virtual currency service providers is a field of high risk. The additional requirements for an applicant for authorisation which are provided by the amendment to law that will enter into force on 10 March 2020 and are to be highlighted include the requirement for impeccable reputation of a management board member and the requirement that the registered office of an enterprise, the location of its management board and its place of business must be in Estonia. However, in order for a foreign enterprise to apply for authorisation, it must establish a branch in Estonia. The state fee for applying for authorisation also increases significantly as of 10 March 2020 and, instead of the current 345 euros, an applicant for authorisation of virtual currency service must pay 3,300 euros to the state.



18.02.20


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Helen Kaur

Legal Advisor

Email: helen.kaur(at)leinonen.ee

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