We come bearing news about a few quick (but important!) legislative changes that will go into effect on February 1st.
The government decided to make a number of changes in the commercial law so that the rules would be clearer and flexible. Most of them become effective on 1 February 2023.
For example, the minimum share capital of the private limited company will be 0.01 euros. This grants the shareholders more options to evaluate the actual financing needs of their Estonian companies. Considering a very low minimum share capital threshold, the shareholders who establish Estonian private limited companies as from 1 February 2023, need to pay the share capital in the future.
Companies that are established without capital contributions are not required to pay the share capital to the company as a result of the law changes. If such companies wish to change the share capital or make distributions to the shareholder (e.g. dividend payment), the share capital payment is obligatory. The latter rules are effective also currently. Considering the above-mentioned share capital changes, the net assets of the private limited company do not have to be at least EUR 2,500 starting from 1 February 2023.
The legislator keeps the requirement that the net assets (total assets minus total obligations shown under liabilities on a balance sheet) of the private limited company cannot be less than one-half of the share capital.
Please inform us if the shareholders of your company have changed, but these changes were not registered with the commercial registry. Starting from September 2023, the shareholders’ list will be kept by the registrar and we will guide you in the update process, if needed. All registry procedures related rules are regulated in the new law – Commercial Registry Act. Most of these rules will be enforced also from 1 February 2023.
Previously such regulations were included in the Commercial Code. The unofficial translation of the new act can be found on the webpage https://www.riigiteataja.ee/en/eli/503012023001/consolide.
E-residency team has made overview of some of the registry related changes. These are available on the webpage https://learn.e-resident.gov.ee/hc/en-us/articles/11914450886801-Changes-to-Commercial-Code-from-01-02-2023.
Please make sure that your company’s contact information is in working order. If the registrar receives notice that the contact details are not in the use, this may lead to a warning in the registry card of your company.
In addition, the companies should pay more attention to fulfill their obligations. For example, the deletion of those companies who do not fulfill their annual report obligations will be easier for the registrar. We do not know how actively the registrar will use such rights in the future, but to avoid any risks we suggest following the requirements of the law.
This article covers only some changes in the laws, it’s not an exhaustive overview. The information is not a legal or tax advise. We suggest discussing your company’s specifics with a specialist before making any decisions. The article should not be used as a substitute for consultation with professional accounting, tax, legal or other competent adviser.
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