/ Creditor and credit intermediaries license

The activity of an investment firm is regulated by the:

Creditors and Credit Intermediaries Act;
Law of Obligations;
Money Laundering and Terrorist Financing Prevention Act;
Personal Data Protection Act;
General Part of the Economic Activities Code Act.

Operating licences for creditors and credit intermediaries are issued and can be withdrawn by Finantsinspektsioon (EFSA).

/ Definitions

A creditor is an institution that provides credit to private persons, offers paid deferral, leasing or other assistance in financing, including concluding credit agreements and performing the necessary actions in its own name and on its account.

A credit intermediary is an entity that can be in charge of:

Intermediating the granting of credit or indicating the possibility to enter into a credit agreement to a consumer for a charge;
Assisting consumers in acts preliminary to entering into a credit agreement or in entering into the agreement and any other activities related thereto;
In the interests of and for the benefit of the creditor, negotiating or entering into agreements on behalf and on the account of the creditor independently and on a permanent basis.

The licensing process is the same for both the licenses in question. The same legal entity cannot apply for both licences.

/ General requirements

/ Company structure

We recommend the company’s structure summarized below:

Shareholders: at least one (natural person or legal entity). We strongly recommend that the shareholders are natural persons only.
Board of directors: at least one individual, of impeccable business reputation, with adequate knowledge, skills and experience in the financial credit market.
Compliance officer: one individual, of impeccable business reputation and adequate knowledge of the AML/CTF regulatory framework. They must be an Estonian resident.
Place of business: the company must have a permanent establishment in the country. In this sense, an office in Estonia must be rented/owned.

The BO(s) can establish the company via a POA, without travelling to Estonia. The BO(s) don’t have to travel to Estonia.

/ Operating abroad

Estonian creditors and credit intermediaries have the right to provide cross-border services.

/ Legal fees

The legal fees involved in the application for creditors and credit intermediaries license can be assessed on a case-by-case basis and depend on the scope of work, and start from EUR 29.000.

/ Timeframe

Company formation: up to 2 weeks;
Drafting of the documents to obtain a license: up to 6 weeks;
EFSA’s application assessment (under the law): 4 to 6 months.