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The Buzz in Estonia: Interview with Merit Lind of Deloitte Legal

The Buzz in Estonia: Interview with Merit Lind of Deloitte Legal

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“The Estonian market faces a combination of challenges on how to boost the economy and attract business,” says Merit Lind, Partner at Deloitte Legal in Estonia. “However, some of the initiatives clash somewhat with anti-money laundering prevention policies,” she says, referring to the e-Residency program famously introduced in the country at the end of 2014.

“The traditional commercial banks are applying stricter AML and KYC related rules to non-residents wishing to open bank accounts in Estonia.” Lind says. “As they do not on-board non-residents easily, it has put the future development of the e-residency program under rather serious pressure.” Lind, herself a member of the think-tank organized by the Estonian President for e-Residency 2.0, says that the group is currently working on finding solutions to balance “ambitious and novel ideas” with “the potential risks associated with granting privileges to people whose backgrounds and intentions are not easily determined.”

However, Lind says that Estonia is currently pushing some amendments in the Estonian Companies Act through the legislative process that should ease the situation for foreign investors and non-residents — including e-Residents — to establish a private limited company in Estonia, as well as allowing them to use foreign banks or other payment service providers to do business in Estonia. According to her, the amendments are expected to come into effect on January 1, 2019. “I very much hope that the legislators and administrators can keep up with the process and introduce reasonable changes in law also in the future,” she says, noting that the changes will provide more tools to smoothly operate businesses from afar, which is particularly beneficial for what she calls “digital nomads.” In addition, the simplified process will, she believes, improve the competitive situation of the Estonian business community. "With the amendment it would be acceptable to use an account opened with a European Economic Area credit institution or payment institution or their branches for an Estonian private limited company."

Finally, Lind says that the changes in the business market are affecting the legal market as well, leading the firms that have “reached the limit of growth” either to consolidate with other law firms or to look for “alternative options to grow business organically,” for example by finding ways to add interdisciplinary consulting elements that she says are increasingly “expected by the clients.” Lind, who appreciates the benefits of the second approach for the clients, argues that “you cannot really resort to being a pure traditional legal service provider for future purposes; you have to figure out how to have something extra to be a valuable partner for clients.” Ultimately, she believes the Estonian market has room for both approaches.