{"id":5381,"date":"2023-02-01T14:20:21","date_gmt":"2023-02-01T12:20:21","guid":{"rendered":"https:\/\/magrat.eu\/guidelines-for-indicating-the-legal-address-of-a-company\/"},"modified":"2023-02-01T14:20:21","modified_gmt":"2023-02-01T12:20:21","slug":"guidelines-for-indicating-the-legal-address-of-a-company","status":"publish","type":"post","link":"https:\/\/magrat.eu\/ru\/guidelines-for-indicating-the-legal-address-of-a-company\/","title":{"rendered":"Guidelines for indicating the legal address of a company in view of the new edition of the Estonian Commercial Code"},"content":{"rendered":"

[vc_row][vc_column width=»1\/6″][vc_column_text css=»»][\/vc_column_text][\/vc_column][vc_column width=»4\/6″][vc_column_text css=»»]<\/p>\n

Guidelines for indicating the legal address of a company in view of the new edition of the Estonian Commercial Code<\/b><\/span><\/h1>\n

<\/h1>\n

Company address notion in the new edition of the Estonian Commercial Code<\/b><\/span><\/h2>\n

On February 1, 2023, the new edition of the Estonian Commercial Code and the new Commercial Register Act will come into force. The new version of the Commercial Code, together with the new Commercial Register Act, introduces significant changes and also offers new opportunities and solutions for Estonian companies.<\/span><\/p>\n

\"\"<\/span><\/p>\n

One of the innovations is the removal of the currently used option for determining the company’s address, which allows you to indicate that the company’s board of directors is located abroad, in accordance with part 2<\/span>1<\/span> of article 64 of the Estonian Commercial Code.<\/span><\/p>\n

From February 1<\/span>st<\/span>, 2023, instead of specifying the address of the company’s board of directors abroad, it will be possible to simply indicate the address of the company abroad. In many ways, this change is rather technical, which simply clarifies the principle that was provided for in the earlier versions of the law. To be more precise, it is the principle that the law provides for two options for determining the address of any Estonian company:<\/span><\/p>\n

    \n
  • address in Estonia and<\/span><\/li>\n
  • address abroad.<\/span><\/li>\n<\/ul>\n

    Meanwhile, it is important to understand that the address of the company is not just a contact postal address, but the place where the company is physically located and from where its management board makes decisions related to the activities of the company. This means that the address in Estonia assumes that there is a lease or ownership of the corresponding workplace or premises, which must actually be used for making management decisions in order for the indicated address of the company in Estonia to be true.<\/span><\/p>\n

    The notion of contact person<\/b><\/span><\/h2>\n

    It is for this reason that part 2 of article 63<\/span>1<\/span> of the Commercial Code establishes that a company whose board of directors is located abroad is obliged to appoint a contact person in Estonia, which can be a licensed company, as well as a lawyer, notary or sworn auditor, the last ones, however, very rarely offer such services.<\/span><\/p>\n

    The said article of the Commercial Code also states that the address of the contact person in such a case is considered to be the address of the company. However, it is important to keep in mind that <\/span>this does not mean that the company is physically located at the address of the contact person<\/span> and it is incorrect to use the address of the contact person as a legal address, since this actually means entering false data into the register that gives the impression that a particular company is physically located in Estonia.<\/span><\/p>\n

    The abovementioned legal norm allows the contact person’s address to be considered as the company’s address only for the purpose of performance by the contact person of their legal functions, namely, to act as a contact address in Estonia, using which public authorities can quickly contact the company. This is relevant precisely in the case when the company is managed from abroad and it is irrational and problematic for the government agencies to try to contact company representatives in such a situation. The contact person as required by the law resolves this issue.<\/span><\/p>\n

    NB!<\/i><\/b> It is important to note that when choosing a provider of such a service, you need to make sure that the service will be provided in a proper manner, otherwise the company may have problems due to non-compliance with procedural deadlines if the contact person does not transfer data or documents promptly.<\/span><\/i><\/p>\n

    The problem with virtual address being used as a legal address<\/b><\/span><\/h2>\n

    Nowadays in Estonia, the \u201cvirtual address\u201d service is also relatively common, which is essentially an analogue of the mail forwarding service, in which the provider undertakes to redirect to their clients any mail arriving at the specified address.<\/span><\/p>\n

    However, the question arises of using such a \u201cvirtual address\u201d as the legal address of the company and indicating it as such in the commercial register. In practice, this happens quite often. As a result, paradoxical and illogical situations arise when dozens, and sometimes hundreds of companies indicate one small office as their legal address, where all of them in fact cannot be located even purely physically.<\/span><\/p>\n

    The law does not provide an option to use the «virtual address» service or its analogues in this manner.<\/span> In fact, such use of a virtual address service means that companies enter false data into the register that does not correspond to reality, which misleads users of Estonian open databases, in particular, the Estonian commercial register.<\/span><\/p>\n

    As mentioned above, from February 1<\/span>st<\/span>, 2023, the law provides for two options for the address of the company: an address in Estonia and an address abroad. The options provided allow one to clearly and reliably indicate where the company and its management board are located physically. At the same time, a foreign address will not affect the status of the company and its functionality in any way. For the purposes of Estonian law, a company registered in Estonia will in any case be considered a tax resident of Estonia and enjoy the benefits of Estonia’s membership in the European Union and other benefits provided for by law and international treaties.<\/span><\/p>\n

    The practice is frowned upon by regulators\u2026<\/b><\/span><\/h3>\n

    Indicating a \u201cvirtual address\u201d as a legal address in the commercial register could also be a source of problems for a company. According to the December 2021 assessment provided by the Estonian Financial Intelligence Unit (hereinafter referred to as \u201cRAB\u201d), which is the state regulator in the area of provision of corporate services, the use of the address service to hide the true location of the company is considered a risk factor for illegal activities. This practice was provided in the same list with such risk factors as making non-transparent transactions with state officials, the lack of verification of the origin of the funds used by the company and the use of fake documents as part of AML procedures. In its report, RAB also highlights the addresses most actively used for such purposes, where not even dozens, but hundreds and in some cases thousands of companies are registered (as of December 2021, the address with 3,666 companies was \u201cthe leader\u201d of the list), which is one of the factors indicating the lack of transparency in the provision of services in this sector.<\/span><\/p>\n

    \u2026and banks<\/b><\/span><\/h3>\n

    Banks and financial institutions are also extremely wary of companies that indicate such mass-used addresses as their legal address. According to current legal regulations, financial institutions are required to implement very strict money laundering prevention policies. Estonian banks in general consider the connection with Estonia to be a very important criteria for cooperation, where one of the most essential elements is for the company to have a physical office in Estonia. Also, many international banks require documentary evidence of a physical office in Estonia in the form of a lease agreement and fresh utility bills. The agreement on the \u201cVirtual Address\u201d service is not accepted in such cases.<\/span><\/p>\n

    <\/h1>\n

    Conclusions: what address to indicate in the register?\u00a0<\/b><\/span><\/h2>\n

    In general, the changes that come into force from the first of February 2023 in the field of company address regulation are more of a technical and clarifying nature and do not change the fact that the company address indicated in the register must provide up-to-date and real data on the place from where the company is managed, more specifically:<\/span><\/p>\n

      \n
    • E-residents who manage a company from abroad<\/span> must indicate their <\/span>address abroad<\/span> in the register and appoint a <\/span>contact person<\/span>, in accordance with the principles of Estonian law.<\/span><\/li>\n
    • If the company is <\/span>managed from Estonia<\/span>, then the <\/span>address from where the company’s board of directors operates<\/span> can be indicated as the legal address of the company.<\/span><\/li>\n
    • A virtual address should not be listed as the company’s physical legal address<\/span> if the company’s board of directors is not physically located at that address. This follows both from the norms of the current and the new version of the Commercial Code.<\/span><\/li>\n<\/ul>\n

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      On February 1, 2023, the new edition of the Estonian Commercial Code and the new Commercial Register Act will come into force. The new version of the Commercial Code, together with the new Commercial Register Act, introduces significant changes and also offers new opportunities and solutions for Estonian companies.<\/p>\n","protected":false},"author":2,"featured_media":5382,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[167,168],"tags":[],"class_list":["post-5381","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agency","category-news","category-167","category-168","description-off"],"acf":[],"yoast_head":"\nGuidelines for indicating the legal address of a company in view of the new edition of the Estonian Commercial Code - Professional corporate services in Estonia | Magrat<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/magrat.eu\/ru\/guidelines-for-indicating-the-legal-address-of-a-company\/\" \/>\n<meta property=\"og:locale\" content=\"ru_RU\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Guidelines for indicating the legal address of a company in view of the new edition of the Estonian Commercial Code - Professional corporate services in Estonia | Magrat\" \/>\n<meta property=\"og:description\" content=\"On February 1, 2023, the new edition of the Estonian Commercial Code and the new Commercial Register Act will come into force. 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