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Open an Investment Fund in Estonia

Investment Funds in Estonia

In 2017, the Investment Funds Act came into force in Estonia, adopted in accordance with Directive 2011/61/EU. Thanks to this, the investment market in the country became significantly more attractive for investors and more competitive. This has led to increased attention from entrepreneurs wishing to open investment funds in Estonia and profit from the activities of such a structure.

What is required to set up an investment fund in Estonia

To register an investment fund in this jurisdiction, two structural units are required. The first is the fund itself, and the second is a joint-stock company that will own the assets. This can be replaced by a contractual fund.

To manage the investment fund, a legal entity acting as the manager is required. It must obtain a license in Estonia granting the right to carry out the relevant activities. The license allows the provision of one or more of the following services:

  • investment in fund assets;
  • purchase of shares;
  • trading in units;
  • accounting;
  • determining the net asset value of the investment fund;
  • profit distribution;
  • compliance monitoring according to legal requirements;
  • other actions directly related to fund management.

All required services must be listed in the application.

Steps

01

Company Registration in Estonia

Creating a fund usually starts with registering a management company. A private limited company is typically used, but other legal forms are also possible. The management company is registered in the same way as a regular operating company.

02

Opening a Bank Account

The company must open a bank account to deposit share capital and receive future investments. Account opening is a complex process best entrusted to professionals. A full set of documents must be prepared, and negotiations conducted properly.

03

Contribution of Share Capital

The exact amount of share capital depends on the type of fund. If required, the beneficiary must provide documents confirming the source of the funds contributed as share capital.

04

Hiring Key Staff

The company must employ staff in key positions, some of whom must be local. We assist in recruiting and selecting employees.

05

Preparation of Investment and Other Policies, and Investment Agreement

The main focus of the investment fund is defined by its policy. Investors contribute funds under an investment agreement. Additionally, AML and other policies are required to establish the fund.

06

Application Submission

After preparing the company and documents, an application must be submitted to the regulator. After submission, you should be ready to respond to additional questions. We ensure timely and well-prepared responses.

07

Registration of the Investment Fund

After successfully completing the previous steps, the fund is registered. Once registration is complete, the fund can start accepting investments, which must be used strictly in accordance with the investment policy and agreement.

How Investment Funds Are Established in Estonia

The process of registering an investment fund consists of several stages. First, you need to:

  • appoint an auditor;
  • prepare a package of founding documents;
  • open a personal bank account as well as a securities account;
  • register a joint-stock company, which will later be licensed and operate as an investment fund;
  • open a corporate bank account into which the entire share capital is deposited.

To establish an investment fund in Estonia, its structure must include at least 5 individuals — three on the board of directors and two on the management board.

After this, documents required for licensing must be collected and submitted to the Estonian Financial Supervision Authority. The list includes the articles of association, business plan, internal policies, details of management board members, and more.

Requirements for Investment Funds in Estonia

The activities of such companies registered and licensed in Estonia are strictly regulated. In particular, fund units may be offered:

  • only to professional investors;
  • to no more than 150 individuals from one EU country;
  • at a minimum price of EUR 100,000 per unit;
  • in an amount not exceeding EUR 2,500,000 per year — this is a general EU requirement.

Investment Fund in Estonia: Licensing

To operate legally, investment funds must obtain a license issued by the Financial Supervision Authority. In the case of small alternative funds (SAF), management may be carried out under a license issued by the Estonian Anti-Money Laundering Bureau.

This second license has less stringent requirements, making it suitable for companies just starting out in the investment field. However, it comes with several restrictions on Estonian investment funds:

  • only SAFs in the form of limited partnerships may be managed;
  • the total value of assets may not exceed EUR 100 million.

If you are interested in setting up an Estonian investment fund, contact our specialists for a detailed consultation. They will handle all matters related to the registration and licensing of your company so that you obtain an investment fund under the conditions you need.

Free initial consultation on legal issues, related to the daily activities of the business

Additional services

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Registration of investment funds in Malta

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Registration of investment funds in Switzerland

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Frequently Asked Questions:

To create an investment fund in Estonia, it is necessary to prepare a business plan and policies, register a legal entity, open an account and deposit share capital if required, and confirm that the fund manager has sufficient experience. The fund must establish conditions for attracting participants. All new participants must be registered in accordance with the fund’s rules and the legislation of the country of registration.
The exact list of documents for opening an investment fund in Estonia depends on the type of fund. Typically, you need to submit personal documents of the founders, a draft investment agreement, fund rules and terms, and an AML policy.
The time required to open a fund in Estonia depends on its type and usually takes several months.
The final cost of opening an investment fund in Estonia depends on the planned investment areas, the type of participants, and other factors. You can find out the exact cost of opening an investment fund in Estonia by contacting our specialists.

Contact
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+85281926676

info@incluence.net

Rm 7B, One Capital Place, 18 Luard Road, Wan Chai, Hong Kong

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