Legal Address of an Estonian Company: How to Indicate It Correctly

The notion of company address under the Estonian Commercial Code

Since February 1, 2023, the Estonian Commercial Code and the Commercial Register Act have applied in their current edition. These rules set out which address a company must indicate in the commercial register. They also set out what requirements that address must meet.

Under part 2¹ of article 64, a company with a board abroad simply indicates the company’s address abroad in the register. It no longer needs to separately specify the board’s own address.

The law provides for two options for determining the address of any Estonian company:

• address in Estonia and
• address abroad.

A company’s address is not just a postal contact address. It is the place where the company physically operates and where its board makes decisions about the company’s activities. An Estonian address therefore requires a lease or ownership of the relevant premises. The company must actually use that workplace for making management decisions — otherwise, the registered Estonian address does not reflect reality.

The notion of contact person

For this reason, part 2 of article 63¹ of the Commercial Code obliges a company with a board abroad to appoint a contact person in Estonia. This contact person can be a licensed service provider, a lawyer, a notary, or a sworn auditor — though the latter three rarely offer this service.

The same article also states that, in this case, the contact person’s address counts as the company’s address. However, this does not mean the company is physically present there. Using the contact person’s address as the company’s legal address is incorrect — it enters false data into the register and wrongly suggests the company is physically located in Estonia.

This rule lets the contact person’s address count as the company’s address only so the contact person can perform their legal role — serving as a contact point in Estonia that public authorities can use to reach the company quickly. This matters when a company is managed from abroad, since government agencies would otherwise struggle to reach its representatives directly. The legally required contact person solves this problem.

NB! When choosing a provider for this service, make sure it will perform reliably. Otherwise, the company may face problems from missed procedural deadlines if the contact person fails to pass on data or documents promptly.

The problem with virtual address being used as a legal address

In Estonia, “virtual address” services are also common. This service works like mail forwarding: the provider redirects any mail arriving at the specified address to its clients.

The question is whether companies can use such a “virtual address” as their legal address in the commercial register. In practice, this happens quite often — leading to paradoxical situations where dozens or even hundreds of companies list the same small office as their legal address, even though they clearly cannot all fit there physically.

The law does not allow companies to use the “virtual address” service or similar solutions this way. Doing so means entering false data into the register that does not reflect reality — misleading anyone who relies on Estonian public registers, including the commercial register itself.

The law offers two address options: an address in Estonia or an address abroad. Both options let the company clearly and reliably show where it and its board actually operate. A foreign address does not affect the company’s status or functionality in any way. Under Estonian law, a company registered in Estonia always counts as an Estonian tax resident — regardless of its address — and enjoys the benefits of Estonia’s EU membership and other legal and treaty protections.

The practice is frowned upon by regulators…

Listing a “virtual address” as a legal address in the commercial register can also cause problems for a company. The Estonian Financial Intelligence Unit (“RAB”) — the state regulator for corporate services — assessed in December 2021 that using an address service to hide a company’s true location is a risk factor for illegal activity. RAB grouped this practice with other red flags: non-transparent transactions with state officials, no verification of the origin of a company’s funds, and the use of fake documents during AML checks.

RAB’s report also names the addresses most heavily used this way, where hundreds — sometimes thousands — of companies list the same address. As of December 2021, one such address topped the list with 3,666 companies, underscoring a lack of transparency in the sector.

…and banks

Banks and financial institutions are also wary of companies using such mass-registered addresses as their legal address. Current regulations require financial institutions to enforce strict anti-money-laundering policies. Estonian banks generally treat a genuine connection to Estonia as an important condition for cooperation — and a physical office in Estonia is one of the most essential parts of that. Many international banks also require documentary proof of that office, such as a lease agreement and recent utility bills. A “virtual address” agreement does not count as such proof.

Conclusions: what address to indicate in the register?

Since February 1, 2023, Estonia’s rules on company addresses require the registered address to give accurate, up-to-date information about where the company is actually managed. In particular:

• E-residents who manage a company from abroad must indicate their address abroad in the register and appoint a contact person, following the principles of Estonian law.
• If the company operates from Estonia, it can use the address of its board’s actual workplace as its legal address.
• A virtual address should not serve as the company’s legal address unless the board actually works there. This follows from the current Commercial Code.