Over the past 10 years, there has been noticeable dynamic development in Polish-Estonian economic cooperation. Estonia participates in the trade exchange between the Baltic states and the European Union, having been a member since 2004 and adopting the euro as its currency since 2011. However, it still remains under strong Russian influence. In the context of the global sanctions imposed due to the war in Ukraine, cooperation with companies from that region carries particular risks. Before engaging in cooperation with a business partner from Estonia, it is advisable to conduct economic intelligence and verify their status and ownership structure.
Economic cooperation with Estonia
Estonia is primarily a service-based country. The structure of Estonia’s GDP in 2019 was mainly composed of the service sector at 61.38%, industry at 22.74%, and agriculture at 2.88%. Polish-Estonian economic relations are governed by joint EU agreements, as well as bilateral agreements on double taxation avoidance and cooperation in the tourism sector. According to data from 2020, Poland is Estonia’s 7th largest import partner, accounting for 4.8% of imports, and the 11th largest export partner, with 2.2% of goods exported to Poland. The value of direct Estonian investments in Poland at the end of 2019 amounted to 48.6 million EUR, and the Estonian capital invested in Poland as of mid-2020 was 183.3 million EUR. In 2019, there were 85 companies registered in Poland with Estonian capital, eight of which had capital exceeding 1 million USD. Cooperation in the IT sector is highlighted as one of the potential areas for collaboration.
National and EU information sources
In the face of Russia’s military aggression against Ukraine, cooperation with certain individuals and companies from Russia, as well as Belarus, is subject to bans or restrictions. Violating these restrictions can result in high, multimillion-dollar sanctions. Therefore, before engaging in cooperation with a new business partner, including a company from Estonia, it is advisable to conduct economic intelligence and perform due diligence.
Detailed information about the types of economic transactions with Belarus and Russia that are subject to EU bans can be found on the European Council’s website: https://www.consilium.europa.eu/. The Official Journal of the EU at the following address: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0269-20220721 provides a list of individuals and entities subject to sanctions. The Polish Ministry of Internal Affairs and Administration also maintains an up-to-date register of entities subject to sanctions, where one can verify a business partner, their affiliations, reasons for inclusion in the register, and the applied sanctions: https://www.gov.pl/web/mswia/lista-osob-i-podmiotow-objetych-sankcjami.
As a first step in checking a company from Estonia, it is advisable to search if it appears in any of the aforementioned registers. Another useful source of information is Council Regulation (EU) 2022/576 of 8 April 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine.
Economic intelligence, or how to verify a business partner from Estonia?
Verifying a business partner from Estonia can be entrusted to a professional economic intelligence agency specializing in such tasks. Private detectives in Warsaw, Poznan, Wroclaw, or other cities will know how to obtain the necessary verification information about the current or future business partner.
The most important way to verify a business partner and their potential connections with Belarus or Russia is to determine the entity that is the beneficial owner and then check if they are listed on the aforementioned sanctions list maintained by the Ministry of Internal Affairs and Administration (MSWiA). This can be done through the Central Register of Ultimate Beneficial Owners maintained by the Minister of Finance: https://crbr.podatki.gov.pl/adcrbr/#/wyszukaj
Direct inquiry to the business partner
In case you encounter difficulties in determining the ownership structure of your business partner through available registers, you can resort to another method of verification within the scope of economic intelligence, which involves directly requesting confirmation from the partner about who their ultimate beneficial owner is. To further validate the response, you can ask the Estonian business partner to provide supporting documents that confirm their statements.
Publicly available sources on the Internet can be used to gather information about a business partner. You can search for the company online, check if they have a website, look for any reviews or publications about them. Additionally, you can request references from other companies that have dealt with the same business partner.
If you prefer not to conduct the research yourself, you can entrust the task to a professional research agency specializing in economic intelligence. They have access to various sources of information beyond the internet. Another option is to reach out to the Embassy of the Republic of Poland in Tallinn and inquire about the specific entity, whether any complaints have been received from other businesses, or if the Estonian business partner has a negative reputation according to their knowledge. Polish-Estonian chambers of commerce may also provide similar information.
These approaches can help gather additional information and provide a more comprehensive understanding of the business partner’s reputation and credibility.
In the Public Information Bulletin of the Ministry of Entrepreneurship and Technology, as the relevant minister for economic affairs, a register of representations of foreign entrepreneurs is maintained. If we find the representation of our contractor in this register, we can assume that they still exist and conduct business.
Another such register where you can check a contractor is the European Union VAT taxpayers register and the EORI register. Companies and individuals wishing to engage in commercial activities within the Union must use the EORI number as their identification number in all customs procedures.
Estonian business registers
To check a contractor from Estonia, the best option is to access the relevant registers in Estonia. The Registers and Information Systems Centre (Registrite ja Infosüsteemide Keskus) provides access to the commercial register and the register of associations and non-profit foundations maintained by the registration department of the district court in Tartu. These registers are maintained in the court to ensure an independent status and legal knowledge of the registering official. They hold strong legal validity and aim to guarantee legal certainty. An entry in the commercial register is considered valid in relation to a third party unless they knew or should have known that the entry is incorrect. The entry is deemed not to apply to transactions concluded within 15 days of the registration if the third party proves that they were unaware or could not have known about the content of the entry. Therefore, a third party can rely in good faith on the accuracy of the entries in the register, for example, assuming that a person listed in the register as a member of the management board is authorized to act on behalf of the company.
These registers are maintained electronically. The registration department of the district court in Tartu maintains the commercial register for self-employed persons, companies (including joint-stock companies, limited liability companies, general partnerships, limited partnerships, commercial associations, European companies (Societas Europaea), European cooperative societies (Societas Cooperativa Europaea), and European territorial cooperation groups), as well as branches of foreign companies registered in Estonia.
The register of associations and non-profit foundations contains information about such entities located in Estonia (non-profit associations also include political parties and other non-profit associations, as well as trade unions, churches, congregations, association of congregations, and monasteries). The register also includes the register of housing cooperatives and the register of improvement associations.
For each self-employed person, legal entity, and branch of a foreign company, the commercial register or the register of associations and non-profit foundations collects the following documents:
- Registration card
- Commercial acts (in the commercial register) or public acts (in the case of non-profit associations, foundations, and residential communities)
- Register acts
Entries in the commercial register and the register of associations and non-profit foundations are public. Everyone has the right to view the data on registration cards and the documents contained therein, as well as obtain their copies. Register acts can be viewed by competent state authorities, courts in proceedings, and other individuals or entities with a legitimate interest.
The Central Commercial Register and Register of Associations and Non-Profit Foundations are maintained by the Registers and Information Systems Centre. The centre also provides the following services:
- e-Business Register – This service is based on the database of the registration department of the district court in Tartu and displays real-time data on all legal entities, self-employed persons, and foreign branch companies registered in Estonia. The e-Business Register allows:
- Free checking of data on registration cards, general information, and tax arrears
- Search by name, registry code, location, scope of activities, etc.
- For a fee, access to annual reports, company agreements, and other electronic documents, personal data, and data on commercial pledges, etc. contained in commercial or public acts
- Real-time monitoring of procedural information regarding companies and changes in their entries
- Free checking of any trading restrictions imposed on Estonian individuals or entities
- Free browsing of the list of political party members
- Free viewing of connections between different companies and individuals
2) European Business Register (EBR)
The European Business Register (EBR) is an online search system that provides official information about European companies. Searches can be conducted on the website https://www.rik.ee/et/euroopa-ariregister. The information is available from commercial registers in a total of 17 countries.
- Searches can be performed for both companies and individuals.
- The list of available information varies depending on the country.
- Register data has different legal effects in different countries.
- The search function is accessible to both individuals and companies.
- A fee is charged for the service.
Access to register data can be obtained online as well as at notary offices. No fees are charged for online searches regarding legal entities, self-employed individuals, and branches of foreign companies, for information on court proceedings, or for accessing data from register cards. Fees are not collected from individuals who search for information themselves online. However, a fee is charged for all other searches, including historical data from register cards and access to annual reports, statutes, and other documents. In case of fee collection for providing information, payment is made immediately via online bank transfer. Subscribers with the right to use extended search parameters pay based on monthly invoices. The rates for using computerized data in the commercial register are determined by the regulation of the Minister of Justice. A fee is also charged for accessing register data and submitting documents at a notary office, in accordance with the applicable fee in Estonia.
The Estonian Chamber of Commerce and Industry (ECCI) represents over 3,600 active Estonian companies. On their website at https://www.koda.ee/en/members, it allows obtaining information about them through searches based on location, area of activity, number of employees, and country of cooperation.
The Estonian Credit Register (https://www.taust.ee/) is a portal that contains information about financial debts of companies and individuals. The register currently includes contact details and information about over 150,000 unique debtors. Searches can be conducted by company name or registration number.
The Estonian Tax and Customs Board provides information about taxes on their website at https://www.emta.ee/eng/business-client/inquiries. This includes whether someone has any tax arrears, whether a person/company is registered as a value-added tax (VAT) payer in Estonia or the EU, whether a person is or has been a non-resident of Estonia, how the transferred funds were used, and who received tax-exempt grants. To submit an inquiry, the commercial register number, personal identification number, or non-resident number must be entered.
Before conducting a transaction or establishing cooperation with a contractor from Estonia, it is worth conducting economic research and thoroughly checking them, especially to ensure they are not connected to Belarus or Russia. Violating the imposed sanctions against these countries may result in a financial penalty of up to 20 million złoty and imprisonment for a period of 3 to 15 years.
Do you already know how to verify a company from Estonia? If not, or if you need more detailed information, we can help you. Feel free to contact us.