Here’s why Estonian companies can’t have ‘nominee’ shareholders or directors

You can run, but you can’t hide.

You can run an Estonian company from anywhere in the world, but you can’t hide your ownership or management of it.

It’s important for e-residents to understand how these two principles are connected.

Estonia has chosen to create a trusted and transparent business environment. This works because, in addition to our secure digital identity system, key data about companies is publicly available and measures have been put in place to ensure those companies remain accountable.

Let’s look at a few examples in practise:

Anyone can look up who owns an Estonian company (regardless of where in the world they are running it), as well as other key data, such as the amount of taxation it has paid. If they need to contact the company then they can look up the registered address and, thanks to the latest amendment to the commercial code, contact a representative of the company there. In addition, they can see the company’s share capital, which has itself been designed to increase trust in Estonian companies.

This doesn’t mean that many people actually want to look up this company data, of course, but the mere fact that all this is possible contributes to the overall trust in Estonian companies, as well as trust in the entire business environment in which they are based. It also provides a level playing field for entrepreneurs to understand the business landscape in which they operate.

Few other countries can boast this level of transparency in its business rules and neither do many have the digital identity system that guarantees who is following those rules. Consider, for example, recent reports such as this one:

Not everyone likes this level of transparency, but the enhanced trust that it generates does help legitimate entrepreneurs conduct business with greater ease globally. It means they can access more services, reach more customers, and develop more partnerships.

We’ve seen that with Estonians and now we are seeing that with e-residents too.

In contrast, tax havens will provide the complete opposite level of transparency and the complete opposite ease of conducting business globally. Ethical considerations aside, it is simply counterproductive for legitimate entrepreneurs to try to hide their company ownership if that company can’t grow as a result of the lack of transparency where it was registered. As we often like to point out — a tax haven can only reduce your company’s taxes by up to 100%. However, an administrative haven like Estonia instead has the potential to increase your profitability many times that by making it easier to conduct business globally.

You can read more about this topic here from Dmitri Jegorov, Undersecretary for Tax and Customs Policy at the Estonian Ministry of Finance and member of the High-Level Working Party on Taxes at the EU Council:

‘Nominee’ services

‘Nominee director’ or ‘nominee shareholder’ services are offered by business services providers around the world as a way for companies to conceal their owners and managers from official registries. The idea is that another person (or even another company in the case of ownership) legally holds these roles, but acts on the direct instructions of the ‘beneficial’ shareholders or real managers that aren’t recorded publicly.

However, as part of Estonia’s measures to preserve and promote the trust of its business environment and all the companies that operate within it, ‘nominee director’ or ‘nominee shareholder’ services aren’t allowed under Estonian law.

Despite this, a routine quality audit by the e-Residency programme discovered that these services were being offered to e-residents. As a result, steps were taken immediately to ensure these services were withdrawn and the company involved no longer offers them.

We would like to make it clear to e-residents, as well as companies serving e-residents, that Estonia’s business code requires all Estonian companies to declare their real owners and directors.

This is in everyone’s interest so let’s continue working together to preserve and promote transparency and trust in our business environment.


Suggested business services providers for e-residents are displayed on the e-Residency website here.

Companies that wish to serve e-residents can learn about the required activity license here, as well as review necessary legislation affecting them here.