Many foreign nationals doing business in Estonia recently received an unpleasant surprise: they are unable to submit their annual report for their company to the Business Register, since they failed to renew their digital ID by the deadline. Meanwhile, the Estonian Police and Border Guard Board (PPA) has imposed additional conditions on applying for a new digital ID.
What’s going on? Grant Thornton Baltic has received inquiries from foreign e-residents whose companies received a deletion warning from the Business Register for not filing an annual report. Now that the e-residents prepared the annual reports and started the process of submitting them to the Business Register, it turns out that some of the foreign entrepreneurs have also neglected to apply for a new digital ID and no longer have a valid one.
Based on legislation, the PPA has imposed new requirements on issuing a new digital ID: that the company has filed its annual reports, paid its taxes and so on. There have been cases where the PPA has set an additional condition on e-resident applicants for a new digital ID before that digital ID can be issued: the businessperson has to confirm that they will file the outstanding annual reports for previous years by 1 June 2024, for example. Yet the Business Register’s deadline comes earlier – it demands that the reports be filed by e.g. 13 April 2024 at the latest. Now entrepreneurs are facing the question of which deadline to proceed from – the PPA’s or the Business Register’s.
More broadly, it also raises the question of why frustrate entrepreneurs by forcing them into a corner and causing confusion? Yes, admittedly the foreign-national businesspeople in question failed to comply with their obligations by not filing annual reports at the right time, and not renewing the digital ID also can mainly be chalked up to nothing more than carelessness. Yet e-resident businesspeople should not be given such contradictory information. After all, we want the Estonian state to be able to offer solutions that are attractive for both locals and foreigners.
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