Estonia’s Tough KYC Requirements: What You Need to Know to Sell Services Legally
Selling services in Estonia comes with a set of strict requirements known as Know Your Customer (KYC) procedures. These procedures are designed to prevent money laundering and terrorist financing by ensuring that providers identify their clients and collect reliable customer data.
Understanding KYC Procedures in Estonia
In Estonia, institutions must identify customers and collect, verify, and update customer data on a regular basis, as required by the Estonian Money Laundering and Terrorist Financing Prevention Act and other European Union legislation. This means that customer data must be reliable and up-to-date to comply with these regulations.
Required Documents for Individuals
To enter into a customer agreement, individuals must submit the following documents:
- First name
- Surname
- Passport number
- Identity number
- Address
- Email address
- Phone number
The company reserves the right to request additional documents if necessary.
Requirements for Legal Entities
Legal entities must provide documentation confirming their legal capacity, including:
- An extract from the commercial register or registration certificate
- Additional documents may be required to determine the legal capacity of the entity and its legal representative
Determining the Beneficial Owner
The company has the right to ask additional questions and request information to carry out the KYC procedure. According to Estonian law, a private individual can only be considered as the beneficial owner if they directly or indirectly own more than 25% of the share capital or control the enterprise in another way.
If the beneficial owner cannot be identified:
- The member of the highest management body is indicated as the beneficial owner
- In the absence of this information, all members of the management board or supervisory board may be considered as the beneficial owner
Conducting KYC Procedures
The company’s KYC procedures are carried out at the time of entering into a service agreement and regularly thereafter according to Estonian law and internal principles. If it appears after purchase that the selected service cannot be provided, a credit will be applied to the customer’s original method of payment within a certain timeframe.
Summary
Estonia’s KYC requirements are strict and designed to prevent money laundering and terrorist financing. Providers must identify their clients and collect reliable customer data to comply with these regulations. Failure to do so can result in legal consequences and damage to one’s reputation. By understanding Estonia’s KYC procedures, providers can ensure compliance with these regulations and avoid potential risks.