The Legal Affairs Committee of the Riigikogu (Parliament of Estonia) decided to merge two bills so that it would be simpler for foreign investors to invest into Estonian start-ups and there would be no notarisation requirement for transfer of shares.
Chairman of the Legal Affairs Committee Jaanus Karilaid explained that the Committee had decided to merge a bill initiated by the Government and a bill initiated by the Committee, and had made two major amendments to the consolidated Bill. “When this Bill is passed, it will stimulate the whole economic environment, and not only the start-up sector,” Karilaid said.
According to Karilaid, during the substantial discussion of the Bill, the Committee reached a consensus that in order to facilitate investing into start-ups, transfer of shares had to be made simpler. “The Committee proposed as an amendment to the statutes to reduce the amount of share capital contribution from originally planned 25,000 euro to 10,000 euro, and at the same time supported the proposal to establish the requirement of actual monetary contribution. This will also apply to pledging of shares,” Karilaid added. “However, in the future, it will no longer be necessary to go to a notary upon transfer of shares, but the transaction will have to be concluded in writing.”
Deputy Chairman of the Committee Toomas Kivimägi thinks that today the transfer of shares of start-ups is complicated for foreign investors. “The states are competing for attracting these companies and the revenue from their taxes,” Kivimägi said. “At the same time I admit that simplification of transfer of shares may endanger legal certainty to some extent, because there will not be a filter of notarial activities.”
The second reading of the Bill on Amendments to the Commercial Code (transfer of share) (148 SE), which consolidates the two bills, is planned for 16 February, and if the second reading is concluded, the third reading of the Bill, or the final vote, will take place on 10 March.
If the Act is passed, it will enter into force on 1 August.
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