Direct Speech, Estonia, EU – Baltic States, Latvia, Legislation, Markets and Companies, Technology

At present, by the new norms, this idea of e-residence in Estonia had been, in fact, stopped, and this endangers also Latvian companies, the holdings of which have been founded in Estonia. It should be pointed out – just in time, because this year the taxation laws of Latvia already function similar to Estonian laws and we, “Latvian Estonians”, may now move back as well! Of course, there are also other reasons for staying in Estonia; besides, we can also use Latvian e-signature in the neighbouring country. This means – e-resident’s card is not necessary!

From 15/01/2018 (Comercial Law, Arcicle § 63¹ “Contact person”), all Estonian capital companies whose Members of Board are non-residents of Estonia or where more than a half are foreigners, there shall be an Estonian resident appointed, who would be responsible for receiving documents. It should be pointed out that for such person there is no responsibility envisaged like it is stipulated in Latvian Law on the Prevention of Money Laundering and Terrorism Financing – for assistance in provision of an address, but there is responsibility and risks. Until now the residents of the EU and EEA may do everything themselves, therefore it was only the problem of population of third countries, such as Russia and Belarus. Now it is different. It increases also the risks of raiderism – the ones Estonia has never faced before. Will trust to receive a subpoena from Arbitrary court?

Such requirement, of course, can be easy fulfilled, because the appointed person may be an accountant, a lawyer, a partner, but it has very many and diverse consequences. The first one and already in the heading indicated is the fact that the sense of e-resident is lost completely. Besides, meanwhile Estonia has started to recognize Latvian e-signature (and others), therefore Latvian ID card could be well used also in Estonia (however, there are nuances, but I will discuss them some other time).

Remember, if, for example, Janis Berzins, by using Estonian e-resident’s signature (and thus also Estonian identity number), will establish in Latvia SIA or in Estonia OU, he will be different Janis Berzins. As the result - many public institutions or their data bases both in Latvia and Estonia will not find him as Latvian Janis Berzins, but as Estonian person. but, if he will establish several firms using Estonian e-signature and others – using Latvian e-signature, then those will be different persons in the systems! And, according to well-known "Latvian court Precedent of Ojars Grinbergs (Ojārs Grīnbergs)", – it will be also another person! As such a person, he, probably, will be questioned by banks, because they will not be able to establish the actual beneficiary! It will be fun, but, of course, the situation shall be solved!

The next consequence is the fact that, if the place of residence of a person specially appointed to represent the company differs from the company’s registered address, then, the present address, in fact, has no sense! However, it is possible to pay for two addresses, while renting them; besides, to fight against the misunderstandings caused by different addresses. And there we face the next problem – if it turns out that the appointed person resides in a different county (in Estonian – maakond), then there shall be changed also the articles of association of Estonian company. Thus, there are some additional costs.

In conclusion I will explain how “to read” the Estonian identity number, because this may be useful for different purposes for both lawyers and banks in order not to cause additional problems for people with Estonian identity number. Thus – the Estonian identity number also consists of 11 digits and comprises the birth data. For example, the identity number of a man who was born before the year 2000, will start with "3" (for a woman it will be "4"), then it will be followed, according to the inverted order, by year, month and date of birth, for example, 701123 (the year of birth - 1970), and then the last four digits is a different code, for example, 0208, which, all together, will be read as follows: 37011230208.

Now that it is already clear that the e-Resident program is becoming uninteresting for the inhabitants of Finland and Latvia, there is time to think about how to improve it? And one of the directions is to achieve such a good check of the e-resident so that he can after receiving e-Resident card can easily open an account in the Estonian bank, receive his letters himself and not be considered more dangerous for Estonia than the actual resident of Estonia. If this can be implemented - the growth of participants in the e-residence program in Estonia will double. Than Latvia also will need an e-Resident card!