Establishing A Company Takes Only Two Hours In Estonia

Introduction

In the beginning of 2006 the Estonian Minister of Justice initiated a new activity plan, which sets clear goals in thirteen domains of commercial law based on feedback from entrepreneurs in order to simplify a number of operations and thus increase legal certainty and economic turnover in Estonia. One of the most remarkable of these aims was establishing a new framework for performing most common and relevant commercial procedures (especially concerning internal decisions and register entries of a company) by using electronical means.

As of 1 January 2007, the according amendments to the Commercial Code became applicable and inter alia brought in a new type of legislative proceeding - the expedited procedure of proceeding an entry, also known as the turbo procedure. For instance, it is possible to establish an incorporated entity by turbo procedure within two hours. All petitions for entry will be reviewed on the following day the latest. The basic notarial model of establishing an entity will remain in use along with the new method.

Main factors in the turbo procedure

The turbo procedure differs from the regular model by two main factors.

Firstly, entrepreneurs can submit data to the Commercial Register via the new E-filing portal at https://ekanded.eer.ee/ run by the state governed Centre of Registers and Infosystems of Estonia. For the time being, with the help of the E-filing portal one can establish a private limited (in Estonian "Osaühing"), general partnership (in Estonian "Täisühing") or a limited partnership (in Estonian "Usaldusühing") company and register a sole proprietor (in Estonian "Füüsilisest isikust ettevõtja"), but not form a public limited company (in Estonian "Aktsiaselts"). On the other hand, amendment of entries is made available for sole proprietors and companies including private limited companies, commercial associations and branches. Users of the portal can also perform simple operations such as specifications in the right of representation, changes in location and contact information etc.

The E-filing portal creates a separate administrative environment for entrepreneurs and persons connected to the enterprise. Persons are identified and procedures are performed by using the Estonian ID-card and digital signature. By entering the portal using ID-card an entrepreneur gets an overview of all enterprises and pending operations correspondent to his profile. It is also made available to pay state...