Foreigners can register company through a website

The Company Registration Portal can now be used to found companies by holders of Portuguese, Lithuanian and Belgian ID cards. Finland will soon join this list.

Minister of Justice Rein Lang says that this is probably the first time anywhere in the world that one country’s register has officially accepted the national ID cards of other countries and the digital signatures issued with them.

“What it means is that a business person from Belgium or Portugal can now establish a company in Estonia through the Company Registration Portal alone,” Lang explained. “As a member of an association he or she can submit an electronic annual report via the register and change the company’s registry data. The same opportunities will soon open up in Portugal to Estonian ID card holders, too.”

Ingmar Vali, head of the Court Registry Department at the Centre of Registers and Information Systems, adds that the project is not merely limited to the founding of companies.

“The solution could be expanded to other Estonian Internet portals so that they could also accept international digital signatures if needed,” he said. “Materials submitted to courts, for example, which need to be signed digitally before they can be sent. The state portal eesti.ee could start accepting international ID cards and digital signatures, too, and why not even Internet banks.”

Vali stressed the equality that the solution is designed to ensure: “If a foreigner comes to Estonia, he or she should be able to do the same things here with their ID cards that Estonians can. And if a business operator is a foreigner, he or she shouldn’t have to actually come to Estonia every time they have dealings with the state. They should be able to do these things via the portals.”

The Company Registration Portal recognises not only Belgian and Portuguese digital signatures, but also Lithuanian ones, where the technical solution used is a Mobile-ID SIM card.

The website of the Centre of Registers and Information Systems’ Belgian partner is http://www.certipost.be/ while the website of its Portuguese partner is http://www.portaldaempresa.pt/.

AS Sertifitseerimiskeskus is also involved in the project. The Company Registration Portal is at https://ettevotjaportaal.rik.ee/.

Source: Ministry of Justice

Another bribe case discovered

Viru circuit prosecution sent a criminal matter to court, charging Agu Värimäe, head of Ida-Virumaa county environmental department, for demanding a bribe.

In January 2008 Värimäe demanded twice that a landowner should sell a piece of land, with an aim to join the land with his relative’s one.

In return the landowner would’ve gotten an accord to his well project and Värimäe promised to favour his projects in Ida-Virumaa environmental department. Värimäe threat he’d give no accords from the environmental department in case he did not sell the land.

Source:

BBN

Vilnius Airport might stop serving FlyLAL from 2009

The management of Vilnius International Airport announced that flyLAL-Lithuanian Airlines’ passengers might not be served at the airport of the capital starting from 1 st January 2009.

During 2008 SE Vilnius International Airport met its contractual obligations with flyLAL-Lithuanian Airlines. However, settlements for the services provided during August and the following months in accordance with the Legal Acts and mutual agreements have not been effected by flyLAL-Lithuanian Airlines. At the same time, flyLAL-Lithuanian Airlines also pocketed the departing passenger fee that a passenger pays while buying ticket, the airport said in an announcement.

flyLAL-Lithuanian Airlines’ debts to Vilnius International Airport amount to LTL 20 mln – LTL 11,5 mln being deferred payments, the remaining amount – current payments that have accumulated during August to November.

Read more from BBN: Vilnius Airport might stop serving FlyLAL from 2009

50 000 homes and plots on sale

 Real estate agencies say that the number of apartments and other housing on sale today is enough for years.

Postimees writes that the online real estate portal City24 alone offers 50,000 apartments, houses and land for sale.

In one year, price of apartments has fallen in all larger towns. The biggest fall was recorded in Narva where a square metre that a year ago cost 11,300 kroons is now being sold for around 7,100 kroons or about 40 percent less.  In Tallinn, price per square metre is down from 23,154 kroons to 18,500 kroons, in Tartu from 17,182 kroons to 15,368 kroons and in Pärnu from 19,510 kroons to 15,297 kroons, according to the statistics of the land board.

Read more from BBN:  Several year’s supply of apartments on sale in Estonia

Exports increased by 13 percent in October

According to Statistics Estonia, in October this year compared to October 2007, exports of goods grew by 13% and imports declined by 3%.

The value of exports of goods was 13.2 billion kroons, which was 1.5 billion kroons more than in October of the previous year. The growth of exports was mainly caused by the increase in the re-exports of fuels by nearly one billion kroons.

The value of goods imported to Estonia in October was 15.7 billion kroons, which was 0.4 billion kroons less than in October of the previous year. The decline in the imports was caused by the decrease of demand in internal market in several commodity sections. The biggest decrease was in the sections of transport equipment and in machinery and equipment.

Estonian foreign trade deficit was 2.5 billion kroons in October, which was 1.9 billion kroons less than in October of the previous year.

Estonian foreign trade, January–October, 2007–2008

Month Exports, million kroons Imports, million kroons Balance,
million kroons
2007 2008 change, % 2007 2008 change, % 2007 2008
January 9 722 10 132 4 13 956 13 581 -3 -4 234 -3 448
February 9 768 10 444 7 13 302 13 625 2 -3 534 -3 181
March 10 464 10 623 2 15 511 14 140 -9 -5 047 -3 517
April 10 396 12 265 18 15 648 15 875 1 -5 252 -3 610
May 11 706 11 489 -2 16 157 14 422 -11 -4 451 -2 933
June 10 825 10 777 0 15 078 14 084 -7 -4 253 -3 307
July 9 889 10 894 10 14 066 15 055 7 -4 177 -4 161
August 10 290 11 047 7 14 656 13 430 -8 -4 366 -2 383
September 9 843 12 222 24 14 570 15 322 5 -4 727 -3 100
October 11 768 13 245 13 16 163 15 720 -3 -4 395 -2 475

In October the share of the EU countries was 63% and the share of the CIS countries accounted for 17% of the total exports (in September of the previous year 71% and 13%, respectively). Main countries of destination were Finland, Russia and Sweden. The biggest increase — by 0.7 billion kroons — was announced in the exports of goods to the United States of America and to Russia (by 0.6 billion kroons).

In total imports of goods, the share of the EU countries was 79% and that of the CIS countries 13% (in October of the previous year 83% and 9%, respectively). Main countries of consignment were Finland, Germany and Lithuania. Imports of goods from Lithuania increased significantly (by 0.5 billion kroons) and from Belarus (by 0.4 billion kroons), mainly on account of the imports of fuels. Imports decreased from Germany (by 0.6 billion kroons), Sweden (by 0.3 billion kroons), Finland (by 0.2 billion kroons).

In both exports and imports, the most important commodity section in October was machinery and equipment which accounted for about a fifth of both flows. Compared to October 2007, exports of mineral products increased by about a half; the increase was mentioned also in the sections of chemical products, machinery and equipment and metals and products thereof. Exports of wood and products thereof and exports of textiles and products thereof decreased. The biggest decrease was mentioned in the imports of transport equipment as well as in the imports of machinery and equipment. The imports of mineral products increased significantly.

Main foreign trade partners of Estonia, October 2008

Country of destination,
group of
countries
Exports,
million
kroons
Share,
%
Change
compared to
same month
of previous
year, %
Country of consignment,
group of
countries
Imports,
million
kroons
Share,
%
Change
compared to
same month
of previous
year, %
TOTAL 13 245 100 13 TOTAL 15 720 100 -3
EU27 8 403 63 1 EU27 12 400 79 -8
CIS 2 199 17 44 CIS 1 984 13 38
1. Finland 2 252 17 0 1. Finland 2 217 14 -9
2. Russia 1 725 13 50 2. Germany 1 776 11 -24
3. Sweden 1 673 13 6 3. Lithuania 1 659 11 46
4. Latvia 1 165 9 -8 4. Latvia 1 454 9 8
5. USA 817 6 564 5. Sweden 1 415 9 -16
6. Lithuania 693 5 -4 6. Russia 1 231 8 13
7. Germany 562 4 -9 7. Poland 757 5 -7
8. Norway 377 3 -17 8. Belarus 555 4 191
9. Denmark 346 3 -11 9. Netherlands 486 3 -13
10. United Kingdom 329 2 21 10. United Kingdom 475 3 -26

Exports and imports of goods by commodity sections, October 2008

Commodity section
by Combined
Nomenclature (CN)
Exports Imports Balance,
million
kroons
million
kroons
share,
%
change
compared to
same month
of previous
year, %
million
kroons
share,
%
change
compared to
same month
of previous
year, %
TOTAL 13 245 100 13 15 720 100 -3 -2 475
Agricultural products and food preparations (I–IV) 1 443 11 4 1 731 11 12 -288
Mineral products (V) 1 920 14 105 2 850 18 54 -930
Raw materials and products of chemical industry (VI) 807 6 45 1 337 9 19 -530
Articles of plastics and rubber (VII) 401 3 2 743 5 -12 -342
Wood and products thereof (IX) 957 7 -17 335 2 -33 622
Paper and articles thereof (X) 355 3 7 382 2 9 -27
Textiles and products thereof (XI) 481 4 -10 787 5 -10 -306
Metals and products thereof (XV) 1 417 11 13 1 548 10 -7 -131
Machinery and equipment (XVI) 2 767 21 10 3 177 20 -16 -410
Transport equipment (XVII) 1 077 8 4 1 493 10 -32 -416
Miscellaneous manufactured articles (XX) 889 7 -7 365 2 -19 524
Other 731 5 4 972 6 -5 -241

 Source: Statistics Estonia

PWC consultants suggest an exit tax

In BBN Taxblog PricewaterhouseCoopers’ consultants Erki Uustalu and Ain Veide are introducing interesting tax points.

The purpose of the exit taxation is to avoid the situations where for tax purposes, before receiving capital gains, the taxpayer changes his residence to a jurisdiction providing for a more beneficial tax treatment. In case of an exit taxation, the assets are deemed to be realized immediately before the person changes the residence and such deemed realization would give rise to a taxable capital gains in the country where person was initially residing.

As capital gains (for example from the sale of shares) received by individuals are taxable in Estonia, but in many countries tax exempt, the change of residence before sale of shares may provide a substantial tax savings for an individual. This is a typical situation, the exit taxation by other countries is used for.  

Exit taxation may also involve the situation where the unrealized gains become subject to taxation when a legal entity is moved from one country to another or where the assets of a permanent establishment become taxable at the time of transfer. Such situations are also existing in Estonian corporate tax system. Soon a judgement from European Court of Justice is expected that should clarify whether exit taxation in respect of legal entities is compatible with EC Treaty or not.

Source: BBN
Original source: Taxblog PricewaterhouseCoopers

Apartments in Kiviõli are very cheap

Offer exceeds demand in a small town named Kiviõli, where one can by an apartment for EEK 20,000 (1,285 EUR), Tarbija24 quotes Eesti Ekspress.

7 sell-purchase transactions were made in Kiviõli during November, according to the Land Register, while cheapest of them was EEK 20,000 and the most expensive was EEK 250,000.

Averagely there are about 20 apartments for sale in Kiviõli. Their condition is varying, but mostly they need renovation. 

The most expensive apartment, renovated and with two rooms, on sale costs EEK 350,000 and two-room apartment that needs renovating can be bought for EEK 50,000.

The average price level is about EEK 80,000-125,000 for which one can find apartments that vary from their size and conditions.

Source: BBN

Tax burden in Estonia to go up sharply in 2009

Tens of new laws that will take effect in January will only increase people’s tax burden, not decrease it, writes Postimees.

Unlike in earlier years, there are no legal amendments entering into force this January that would have a positive effect on people’s finances. On the contrary, they will decrease benefits and push up taxes.

First of all, the ruling coalition has agreed to suspend the plan to cut individual income tax rate from 21 to 20 percent in 2009, that would annul the Reform Party’s election promise to reduce the tax rate eventually to 18 percent.

Also minimum tax-deductible amount will be left unchanged at 2,250 kroons in spite of election promises to increase it to 2,500 kroons. This means that a person who earns 10,000 kroons a month will lose 93 kroons a month.

The future of the whole tax cutting plan is murky since although the Reform Party claims that this is a one-off compromise, Social Democrats see that the whole plan should be frozen for years. “The tax reform as it is being implemented in Estonia for several years has not made Estonians happier nor the economy richer. We should now agree not to cut taxes further until adopting the euro,” said Eiki Nestor, a leading Social Democrat.

Since August, the state will stop paying parents of school children a one-time 450 kroon benefit. Although it will help to save EEK 80 million in the budget, it is likely to hurt families with multiple children and poorer households for whom education cost will increase.

From January, the state will no longer pay a child benefit to parents who also receive parental benefits. Until now the state paid 600 kroons per child until the age of 1.5 years and 300 kroons until the age of 3.

Although it has been possible only for a year, fathers of newborn babies will no longer be able to take a ten-day paid leave since January during which they received average wages.
 
Moreover, the state will no longer pay a dental benefit of 300 kroons a year, although it does not apply on pregnant women and mothers of children who are younger than one years of age.

The new amended VAT law will increase the VAT for medicines, newspaper and magazines from 5 percent to 9 percent. From July VAT on accommodation services, concert and theatre tickets and funeral services will increase to 18 percent.

The fee payable for ordering an electronic ID card will go up from 150 kroons to 250 kroons. The fee for issuing a time-fixed or long-term residence permit will increase from 750 kroons to 1,000 kroons. The cost of reviewing a visa application will be doubled to 300 kroons.

Court fees for filing a claim in administrative court will double in average.

People will also be spending much more money in vehicle registration centre since the car’s initial registration fee will go up from 1,000 kroons to 1,900 kroons. Registration of a small vessel will cost 1,000 kroons or 400 more than before while registration fee of an ATV or jet will go up from 300 kroons to 500 kroons.

Source: BBN

EU satisfied with money laundering prevention activities

At the Moneyval plenary meeting of the European Council from 8 to 12, the Minister of Finance successfully defended the report on the prevention of money laundering and terrorist financing which supports the successes and current activities of Estonia.

 

The final report passed at the Moneyval meeting is predominantly positive about the system for prevention of money laundering and terrorist financing used in Estonia. The final report recognises the work done in Estonia and the country’s efforts in the fight against money laundering and terrorist financing.

The main aspect highlighted in the Moneyval report are awareness of market participants of the risks of money laundering and the requirements of established legislation. Experts also gave some recommendations for further activities, which includes the management of money laundering risks related to developments in information technology.

“A positive option of our activities supports the reputation of Estonia as a country with an open economic environment and a reliable financial system,” said Deputy Secretary-General of the Ministry of Finance Veiko Tali.

In Estonia, the third assessment stage by the Moneyval expert commission of the European Council that deals with the fight against money laundering started with a visit in the beginning of 2008. An overview about the situation in the prevention of money laundering and terrorist financing in Estonia was prepared under the coordination of the Minister of Finance before the visit.
 
During the assessment stage, the experts paid attention to the efficiency of Estonia’s system of money laundering and terrorist financing prevention and it was one of the first countries where the compliance of laws with the directives of the European Parliament and Council was separately assessed.

Moneyval (Select Committee of Experts on the Evaluation of Anti Money Laundering Measures) is the expert committee of the European Council that deals with the fight against money laundering and its goal is to conduct mutual evaluations of the measures employed in the prevention of money laundering and terrorist financing. The goals of Moneyval member states also include promotion of international cooperation and distribution of information about anti money laundering measures, the options of their implementation and the trends of money laundering in Europe.

Source: Estonian Ministry of Finance

Kruuda expands his media empire

Kalev Meedia, the media arm of the candy maker Kalev that belongs to businessman Oliver Kruuda, has acquired a local radio station and a free newspaper.

The company said it had signed a contract to acquire 100 percent of Kullasadu Invest and Tartu Ekspress, writes Eesti Päevaleht.

Kullasadu Invest owns radio station Sun FM that broadcasts programmes in Tartu, South Estonia and Pärnu.

Tartu Ekspress publishes free weekly newspaper Tartu Ekspress.

In November, Kalev Meedia acquired a Russian-language general-interest magazine Bravo that was launched in 2007 and has a print run of about 8,000 copies.

In February Kalev Meedia acquired IT magazine Praktiline Arvutikasutaja.

In addition to Praktiline Arvutikasutaja Kalev Meedia publishes such magazines as Avenüü, Ärielu, Sporditäht, Just, Basket,  Jalka and Muumi. In addition it operates a sports TV channel Kalev Sport.

Kalev Meedia is a subsidiary of food group Kalev.

Source: BBN

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