Foreigners in Estonia like to buy already registered companies as it is not complicated, and the sales and purchases are confirmed in the presence of a notary only. Note that before the deal is sealed, you will have to book an appointment, prepare all necessary documents, and submit them to the notary and if the client is absent, it is possible to act according to a power of attorney.
Some companies are registered in Estonia but have no activity and were “put on a shelf” to age, they are called Shelf companies. The company makes the new user start operating immediately after purchase since it has been incorporated and VAT or tax registered; the buying of a shelf company is popular in Estonia.
If the VAT code is unavailable, you must apply with the necessary documentation to the Tax and Custom office of Estonia, inasmuch you are a registered company, you can apply to register as a VAT payer, and this code to carry out trade and commerce relations.
Advantages of buying a ready-made entity
Buying an Estonian already-made entity means you will receive the following to aid start operations:
- Memorandum and articles of association
- Certificate of incorporation
- Tax registration number (in some cases)
Necessary document to purchase an entity
- A copy of your passport photograph
- Residence address
- Contact details
- An approved Power of attorney by a notary
- Distribution of shares if there is more than one purchaser
Characteristic of a shelf enterprises
If you are purchasing a shelf enterprise in Estonia, you must know of this characteristic:
Bank account
Shelf companies do not have an already created bank account; on purchase, you are required to open one for the company and continue your operation.
Stamp
The entity does not have a stamp or seal, proving that it has not been used in the past, has no activities in the past, and has no debt.
ID requirement
As a new owner, your ID will be required so that you can be able to use the company and know that there is no hidden risk when it comes to a shelf company.
Duration
A day is required to activate and reopen the company from its dormant state.
Power of Attorney
The buyer will need a power of attorney for official representation before authorities and institutions like banks, tax, and customs administration, to register for economic activities.
The power of attorney is needed till a new board is recorded and the company details are changed in the commercial register; the procedure takes five working days.
Buying a business in Estonia
Buying a ready-made entity in Estonia might be a bit difficult, as there are various service providers to buy from. However, these are some considerations before buying:
- The entity’s legal structure (private limited liability companies are more preferred and popular)
- The entity’s share capital, companies with higher share capital are more expensive
- The age of the company is also important to consider
- The use of the entity is also necessary when acquiring a company
Information needed to buy an entity
- Full name
- Copy of passport photograph
- Residence address
- Information of board members
- Company name
- The company business address
- The company email address and phone number
Making changes to the acquired entity
Some details need to be made to the purchased company, depending on the type of company and features. Here are the major changes you need to change:
- The names of shareholders must be replaced when taking over the company
- The company’s name is also changed
- Appointment of a new board of directors or management
- Change of the company’s legal address and virtual office can be used and registered
- The article of association is amended or changed
