Credit Institution/Bank License in Estonia
Credit institutions (banks) take deposits of money and other funds from the public and issue loans on their accounts or operate them differently. Only companies that accept deposits from the public can be referred to as ‘banks’. Such credit institutions are obliged to obtain an activity license from the Estonian Financial Supervision Authority (EFSA) to operate and comply with the legislation.
According to EFSA, the following documents needs to be gathered and presented:
- A copy of the statutes for a business that is operating, any decision by the general meeting to amend the regulations, and the amended text of the laws;
- A notarised copy of the foundation contract or decision for a business being founded and documentation proving that share or equity capital has been paid in;
- A business plan that meets the requirements of the Credit Institutions Act;
- Documentation certifying the value of net own funds for a business that is already operating, together with the auditor’s report;
- The initial balance of the applicant and a review of income and expenses, or the balance and profit report as at the end of the month before the application for an operating business, and annual reports for the past three years if they exist;
- Data on the information technology and other technological equipment and systems, security systems, and control mechanisms and systems that will be needed for the provision of the planned financial services;
- The internal rules and procedural rules regulating activities and proposals for them as required by the credit institutions act and by the terms of the Securities Market Act concerning internal rules if the business plan expects investment services to be provided;
- Internal rules or proposed rules for bookkeeping;
- The statutes or proposed statutes of the internal audit unit;
- Information on the members of the management board and supervisory board, the head of the internal audit unit and the chair of the audit committee, including their first and family names, personal ID codes or date of birth if they have no ID code, place of residence, description of education, complete list of jobs and positions held, and for members of the management board a list of their areas of responsibility, together with any documentation that the applicant considers relevant for demonstrating their trustworthiness and compliance with the Credit Institutions Act;
- Information on the auditor of the applicant, giving name, place of residence or location of operations, and personal ID code or date of birth or registry code if there is no ID code;
- A list of the shareholders or members of the applicant showing the name of each shareholder or member, their registry code or ID code, or date of birth if they have none, and details on the share or equity holdings of each shareholder or member and the voting weight given to them;
- Documents showing the material wealth for the past three years of any person who will be a shareholder or member of the applicant, if their share is more significant than 2% of the equity capital or the voting weight of the applicant;
- The statutes of a legal person who will be a shareholder or member of the applicant and their annual reports for the past three years together with the auditor’s report and a list of their shareholders, with details on their share in the equity of the business if the legal person has a share of more than 5% of the applicant’s equity capital or voting rights;
- The data required by the Credit Institutions Act for people who will hold a significant share of the applicant, which include:
- The name or description of the owner, their place of residence or of operations and the registration code if there is no such place, an approved copy of the registry entry for a business, and a copy of the statutes if any;
- Details of the members of the management board and supervisory board of the owner;
- The annual reports for the past three years, if such exist, together with the auditor’s report;
- For an owner that is part of a consolidated group, a description of the structure of the group together with details on the equity participation of the businesses in the group and the annual reports of the group for the past three years together with the auditor’s reports;
- Documentation certifying the material wealth for the past three years of a physical person as owner;
- Data and documentation on the origin of the financial and non-financial funds that are planned to be used to acquire the significant participation;
- Data on businesses in which the applicant or its managers have a participation of more than 20%;
- A document in which the applicant undertakes to make the one-off payment to the Deposit Guarantee Sectoral Fund as required by the Guarantee Fund Act and the one-off payment to the Investment Guarantee Sectoral Fund if the business plan expects investment services to be provided.
Setting up a branch
Following the legislation, a credit institution can set up a branch:
- in a country in the European Economic Area
- from the European Economic Area in Estonia
- in a foreign country
- from a foreign country in Estonia
In every case, the credit institution must inform EFSA and comply with its regulations. More information on the website.
Credit institution can also provide cross-border services in Estonia and the countries of the European Economic Area. EFSA must be notified and consulted in both cases.
Company in Estonia OÜ can help a business obtain a license required for the operation of a credit institution. Do not hesitate to contact us and request a consultation.
Licensed credit institutions in Estonia