Buying and selling shares in Estonian companies is generally a simple process. There are three different ways to transfer shares from one party, the "seller", to another party, "the buyer".
The following table sets out each, including a summary of the necessary conditions, steps and costs, as well as a brief analysis of the most suitable types of buyer or seller for each option and how being an e-resident could support such transactions.
| Share transfer with a notarized transaction | Share transfer without notary's authentication | Share transfer via Estonian securities account | |
|---|---|---|---|
| Best fit |
Any founders Any investors |
Estonian or e-resident founders Any investors |
Estonian founders Estonian investors |
| Minimum share capital | 0,01€ per shareholder | €10,000 (must be fully paid in) | 0,01€ per shareholder |
| Notarial authentication | Yes | No | No |
| Estonian bank & securities account | Not needed | Not needed | Needed |
| Basis for share transfer between parties | Notarized transaction for the transfer (authenticated by a notary) | Transaction for the transfer should be at least in a format that can be reproduced in writing (e.g. email) | Securities transaction, entry in the Estonian Register of Securities |
| Changes to the shareholders' list |
Management board The notary informs the commercial register |
Management board Management board informs the commercial register |
Change in the Estonian Register of Securities Information automatically updates on the commercial register |
| Occurring costs | Notary costs may be substantial | No fees | Bank fees & fees of the Estonian Securities Register |
| Time |
Upon signing of share transfer agreement or as agreed between the parties. *due to AML and KYC procedures non-residents need to submit original copies of all documents to the notary prior to the transaction which may take some time. |
Upon signing of share transfer agreement or as agreed between the parties. |
Within 1 business day (if parties have existing Estonian securities accounts) *due to AML and KYC procedures, opening a bank account for a non-resident may take months and may not succeed. |
| Benefits of having e-Residency card |
Enables remote authentication through Estonia's e-notary platform |
Digital access by a board member to make the change in e-Business registry |
Digital access to bank account in order to make the transfer online for all parties |
| Due Diligence |
All documents checked by notary. Notary verifies that the seller is the owner of the shares. |
Responsibility of transfer participants. No security regarding ownership of the shares. |
AML and KYC by the bank. The buyer can trust the entry in the Estonian Register of Securities is correct. |
| Necessary steps |
1. Choose a notary 2. Gather necessary documents for the notary as required for AML and KYC procedures 3. Share transfer agreement authenticated by the notary 4. Information sent to the commercial registry by the notary 5. Changes made in commercial registry |
1. Specify in Articles of Association that the requirement for notary is waived for share transfers 2. Enter waiver in the commercial register 3. Sign the share transfer agreement 4. Changes made in the commercial register at the request of board member |
1. Open bank and securities account in Estonia for both parties 2. Company shares registered in the Estonian Register of Securities 3. Share and purchase price transfer via banks 4. Information updated in the commercial register automatically |
For consultation regarding this process, check out our Marketplace, where a number of service providers can assist you.