1Office advices customers to convert Estonian company share capital to euro nomination within year 2010.

6th of September 2010

As Estonia is set to start using euro on 1st of January 2011, companies have to convert their previous kroon based share capital to euro. Conversion is not an automatic process compared to money on bank accounts for example. Shareholders and board have to do a number of procedures.

To have euro based share capital and shares there has to be an amendment to the articles of association and recalculation of share nominal values with precision set by the law. Upon the conversion of share capital and shares into euro, shareholders shall be treated equally and the rights of shareholders shall be preserved pursuant to existing proportions. Changes to the articles of association and nominal values of share have to be documented in shareholders decision, based on which board can make proper petition submitted via company registration portal or notary. 1Office can assist its customers with necessary procedures.

There is no deadline set by state, but 1Office advices customers to do necessary amendments within year 2010. In that case company can have annual report of 2010 where share capital and earnings/loss are shown in adjusted numbers. Starting from 1st of January 2012, state registers shall not register any amendments to the articles of association if the data in the articles of association if the data in the articles of association is not changed into euro at the same time.

To have a share capital in accordance with commercial code, there has to be a legally correct shareholders decision stating the increase/reduction of share capital. The resulting difference will be recorded under the item “Retained earnings from previous periods”.

Amendments to articles of association are allowed starting from 1st of July 2010 and companies are exempt from the obligation to the pay state fee for entry of the amendments until 1st of January 2012. The following actions will be exempt from the state fee: entry of the amendments of the articles of association into the commercial register, including changing of the share capital of the company and entry of the changes of the share capital of a public limited company or private limited company into the commercial register.

Estonian Center of Registers and Information Systems has developed a special calculator, which can help to find closest possible full-digit share capital. Most commonly used private liability company has to have a minimal share capital of 2500 EUR and 1 euro will be the minimum nominal value of a share.

Calculator in Estonian is available here.

Veronika Kimsen

info@1office.ee