Tag: Business

Investment in the Future, or Why and How to Trade on Amazon

[vc_row][vc_column][vc_column_text]

While mass media is riddled with updates on Amazon physical store opening around the world, we find it relevant to go through the key advantages of online trading on Amazon. Over the years, e-commerce has swiftly taken over the modern business market. And there are several reasons for that.

Amazon, founded by Jeff Bezos in 1994, referred to as the world’s most influential economic and cultural force is the world’s largest online marketplace. The brand versatile logo hasn’t changed since 2000, whilst the big brand itself has indeed transformed the world’s economy, thereby contributing to the development of online trading.

So, let’s consider under which circumstances it is worth to start selling on Amazon whether building your online store.

The problem of the choice

Plenty of e-Residence holders at the beginning of the online trading journey wondering if they should have an in-house platform, or it is more reasonable to offer goods on Amazon.

The development of your own trading platform is relevant as long as the brand is already known on the market. When it comes to launching a brand-new company and fresh product, it is worth the money and time to join the existing marketplace. And later, in the case of company success, an entrepreneur begins to invest in building oneself an online platform.

This decision is explained by the need to test market demand, and if relevant, it also provides an opportunity to consider possible variants to stimulate the demand.

Why to choose Amazon

Without a doubt, in the next stage, every enterprising business person would have questions regarding which platform to choose. Speaking of Amazon advantages, we highlight the sustainability of big brands. Time-tested Amazon has firmly established itself on the market becoming a standard among online trading platform; therefore, joining Amazon enables a businessman to shape the market in a way. And that’s something incredible inherent in nowadays online trading.

On top of that, selling goods on Amazon simplifies the process of reaching potential clients. If a company decides to represent its product on such a popular platform as Amazon is, buyers won’t have to look for a specific company using search engines. Instead, while looking for a product, they are most likely to come across the same product on the most popular online store.

Amazon engages more than 180 million users in a month and offers a huge range of more than 500 million goods. This represents another big advantage of trading online on Amazon — a multi-million client base. Amazon users from all over the world are looking for products in a variety of fields. Also, the loyalty and trust of Amazon clients, resulting in higher conversion rates, increase trafficking while maintaining low cost. Cost- and time-effectiveness in this case, comparing to another way of starting own online store, is evident.

e-Estonia: why to go online

Turning to the friendly nature of online trading conditions, we should consider the vast opportunities Estonia offers to entrepreneurs.

As the European enterprising hub and concurrently the world’s most advanced digital society, Estonia is a perfect place for starting an online-based business. Innovative programmes such as e-Residence, as well as open access to funding including EU finances, attract more and more entrepreneurs.

Smart people and smart money — well-describing characteristics of Estonian business environment. Estonian relatively small market is full of talents and ambitions. Starting a company in an enthusiastic environment contributes to its successful development.

More about the advantages of having business in Estonia here.

Putting together, where to open an online business rather than in the world’s most digital country? The answer is clear.

LKS Consult OÜ is happy to help by offering a wide range of services for those who intend to trade on Amazon in Estonia.[/vc_column_text][/vc_column][/vc_row]

Coronavirus (СOVID 19) and the Impact it is Having on the Estonian Economy

[vc_row][vc_column][vc_column_text]

The worldwide pandemic has spread rapidly and seems to affect more or less every individual, inevitably, putting the global economy in a vulnerable situation. Causing economic mess coronavirus has led to a recession, where even the most sustainable orders undergo changes. While looking into pandemic consequences and accessing effect they are having on the economy of Estonia, it is essential to consider the country’s every distinctive economic feature.

The Estonian economy is regarded as open and stable and seeks to maintain the status. Characterised by innovation and adaptability, it can stand up against the virus. Nonetheless, since the pandemic rapid growth during the last spring, local media authorities are transmitting rich diversity of data regarding the Estonian market’s stability. In such a way, there arise questions concerning the subjectivity of an economic forecast. Whether the situation on the market is indeed that disastrous or is it about a certain perspective?

The first wave, or falling numbers

Data gathered for spring 2020 evidently indicate negative implications of the virus, nevertheless, not every business was affected. Statistics show that compared to 2019, the year 2020 first-quarter GDP has dropped by 0,7 per cent and stopped at 6,5 billion euros. For its most part, the virus affected energy, processing and industrial sectors, which could be explained by the decline in trade growth and household consumption. During the spring analysts were not so sure about the power of virus impact, they, however, empathised a decreasing trend in most fields of economic.

By the time of the second wave, the consequences of the first one became clearer. The tertiary sector, in particular, tourism, suffered income loss and approached decline. During the spring-summer of 2020 the decline in the prices was caused by lower demand. A range of leisure limited by the pandemic served as a reason for lowering prices of services, while rising unemployment has worsened the situation. Still, some businesses stayed strong.

News and analytics demonstrate the resilience of large construction companies and exportation. Meanwhile, some experts considered the Estonian market’s dependence on foreign demand, empathising the government’s limited ability to stimulate its own economy.

The second wave, or adaptation

At this stage, the government strived a lesson to be learned and prepared for the second wave. The forecast, however, was disappointing and predicted a stronger impact in the last quarter. GDP has dropped by 1,2 per cent comparing to 2019 and was 7.3 billion euros. The economic decline for its most part resulted from a decline in the first sector. Things were not getting better in hospitality, thereby compromising the market’s stability.

The economy of Estonia, however, has maintained its status and started to stabilise. The decline has decelerated and stopped pretty much in every sector. The processing sector and logistics were the first ones to recover. Despite limited export, the level of trade has increased due to electronics and chemical products.

All in all, for the past year Estonian economy, has fallen by 2,9 per cent. Considering the scale of the pandemic, it may be said that the Estonian government has shown its ability to an efficient adaptation.

Private sector situation

Speaking of attention the Estonian government paid to the private sector, it is essential to note that the first half of the year was a challenge for both small and medium enterprises. Moving towards the end of the year, the government started to financially support such businesses. Having European commission approval, the government aimed to help the socio-cultural sector. Every willing could fill an application online.

Last but not least is the remarkable and independent success of Estonia start-ups worldwide at the height of a pandemic. For instance, Pipedrive, the leading CRM platform, has signed an agreement to receive a majority of investment from Vista Equity Partners, a leading global investment company focused on enterprise software. Similarly, Estonian based Tesla-rival Skeleton Technologies, received more than 40 million euros of investment last year. And also, three Estonian companies, specialised in IT, have joined their forces and signed a contract with the European Space Agency to fight against cyberattacks.

The global success of local companies along with the government’s successful stabilisation of a crisis proves the fact that there are no hopeless situations and highlights the necessity of competent decisions.

There is no wrong time for setting up a business, but you have to be sure you are in the possession of the right information, thereby ready to act. LKS Consult OÜ will sort it out for you. Our professionals are happy to assist you in becoming part of the Estonian business environment and help in setting up the company in Estonia.
[/vc_column_text][/vc_column][/vc_row]

Blockchain Technologies in Estonia

[vc_row][vc_column][vc_column_text]Estonia is one of the countries with the highest level of e-Government development. Blockchain is considered to be a key technology in the development of the Estonian e-Government because of its undeniable advantages and potential. From a technical point of view, blockchain technology improves the efficiency, security, and transparency of transmitted data.

Data transparency aims at equality of public access to information, while ensuring the clarity, consistency and reliability of the data provided. In the context of democracies, transparency and accountability often take precedence over confidentiality. However, prioritising confidentiality while ensuring transparency requires complex security protocols, which somewhat complicates the process.

In 2001, Estonia developed its own decentralised distributed system – X-Road, and has been using the KSI blockchain platform since 2008 in the registries of codes of healthcare, judicial system, law, security and Commercial Code, among which are e-Police, e-Law, e-Justice, as well as private sector e-services such as digital ID, e-Residency, e-Governance, e-Tax, i-Voting and e-Health.

Why does Estonia use Blockchain technology?

Many believe that Estonia is at the forefront of blockchain and decentralised technology by implementing the projects like KSI and X-Road, starting its digital transformation journey over 20 years ago. Estonia is currently the leading country in the development of e-Government, as it has taken many measures to support the digital society at the beginning of the 21st century. Accordingly, the policy of our country is aimed at increasing the efficiency and transparency of the state apparatus, as well as at developing the economy and improving the general welfare of citizens.

According to the “one-time principle” – the main principle of the Estonian legal framework, all information records are entered in the system once, and any updates must be made in the master record. This is necessary to ensure the integrity of the data and allows you to check the update history of this very data, as well as request records of confidential access.

The transparency and immutability functions of the blockchain (chain of blocks with information) allow detecting all kinds of data manipulation. Information stored in a blockchain-based ledger is nearly impossible to steal, alter or delete, which in turn ensures data integrity at rest. For this reason, it becomes clear why the Estonian government is using the blockchain platform to protect its own servers.

KSI: Keyless Signature Infrastructure

As mentioned earlier, the blockchain platform used in Estonia is called KSI Blockchain (Keyless Signature Infrastructure) provided by Guardtime technology. KSI is designed to protect networks, servers, and databases in Estonia from attacks; detect any deliberate or unintentional data changes; and ensure data integrity at rest.

The KSI uses a “once-only principle” to ensure the integrity of the present digital data. In simple terms, all data entered into the system will be hashed into a string of keys called a hash value. The hash value, access time, and signer are then entered into the KSI blockchain, which creates a “signature” that proves the uniqueness of the document. Thanks to such a data storage system, the source information never leaves the server, allowing the state apparatus to track any changes in the blockchain. It makes it possible to check the “signature” of a document without referring to the original document, hence the literal components of the name of the KSI – keyless signature infrastructure.

X-Road: Data Exchange Layer (DXL)

X-Road is a centrally controlled distributed layer of data exchange between information systems. Simply put, X-Road is a platform that connects different interfaces, servers, and services in Estonia, creating a common level of data exchange between systems. Without exception, all digital systems of state institutions in Estonia are connected to the X-Road platform.

X-Road provides a relatively robust information security platform. However, the platform can only protect data in transmission, but cannot guarantee the safety of data at rest. This is where the features of the KSI blockchain come into play.

Today, blockchain-based systems are practiced in many states as the implementation of digital functions in the government, namely in Estonia, Switzerland, China, Japan, America, Great Britain, and other countries aiming to optimise public administration processes. The use of blockchain technologies still involves some difficulties, but the potential of this technology cannot be ignored. The KSI blockchain in Estonia is a vivid example of the successful use of blockchain for the implementation of e-Government in state processes.

FinTech companies in Estonia using Electronic ID and Blockchain

Over 100 Estonian FinTech companies, ranging from innovative startups like TransferWise to blockchain leader – Guardtime, make Estonia a global center of FinTech excellence.

The following is a list of Estonian FinTech companies that target local or larger markets, but remain in touch with the Estonian back office or management:

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text css=”%7B%22default%22%3A%7B%22margin-top%22%3A%2220px%22%7D%7D”]The specialists of LKS Consult OÜ will be happy to assist you in obtaining a cryptocurrency license in Estonia and offer full support when registering Estonian companies.[/vc_column_text][/vc_column][/vc_row]

Nominee Service in Estonia

[vc_row css=”%7B%22default%22%3A%7B%22margin-top%22%3A%220%22%2C%22padding-top%22%3A%220%22%7D%7D”][vc_column css=”%7B%22default%22%3A%7B%22margin-top%22%3A%220%22%2C%22padding-top%22%3A%220%22%7D%7D”][vc_column_text css=”%7B%22default%22%3A%7B%22margin-top%22%3A%220%22%2C%22padding-top%22%3A%220%22%7D%7D”]

Risks related to the appointment of nominee Board
members and owners for an Estonian company

Nominee director (Board member) is a person who registers a company in one’s own name with the Estonian government authorities, while the company is actually managed by other people. The nominee director is usually not involved in (and often has no idea about) the actual business activity of the company.

Board member of an Estonian company is a person who manages the company and is responsible for all of its activities. The details of the Board member are specified in the Certificate of Incorporation of an Estonian company and are publicly available. The management Board of a company may have one or more board members. It is the Board member who has the authority to sign on behalf of the company and have access to the company’s bank account.

Beneficiary owner of an Estonian company is a person or several persons who directly or indirectly own a legal entity (at least 25% of its equity capital) or significantly impact its decision-making. From September 1, 2018, all legal entities registered in Estonia are obliged to publish data on beneficiary owners in accordance with the fourth anti-money laundering directive (Directive (EU) 2015/849, officially named Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing).

According to the Estonian law, a Board member shall be appointed by the owners of the company’s by drawing up a minutes of the general meeting of owners. If the nominee Board member and the nominee owner are the same person, the actual beneficiary of the company has no right to change the management Board of the company and may have no right to access the company’s accounts without the consent of the nominee director. Company share ownership can only be transferred to a new owner under a notarised company purchase agreement – otherwise it shall not be considered legal.

In view of the above, the fate of an Estonian company registered to a nominee director/owner is completely in one’s hands, and, in case of disagreement with the actual beneficiary, the latter may completely lose control over the company.

When you become a client of LKS Consult OÜ, you can receive all the necessary services in one place: setting up a company, accounting services and advice, assistance in obtaining the necessary licenses and permits, legal support for your Estonian company, advice on opening an account and all amendments to legal and tax regulations of Estonia.

P.S. Beware of fraudsters offering nominee services and highlighting only the benefits that your company can get without highlighting the high risks and the fact of violation of Estonian law.[/vc_column_text][/vc_column][/vc_row]