The Investment Funds Act of the Republic of Estonia (IFS) enables an investment fund to be established as a common fund, a public limited company, a limited partnership (usaldusfond) or a defined-benefit occupational pension fund. The provisions of the Estonian Commercial Code and the provisions of the Investment Funds Act shall apply to the establishment, operation and termination of an investment fund.
Among the distinctive advantages of this structure, the following can be highlighted:
A trust fund established as a limited liability company is a neutral legal entity from the point of view of Estonian tax legislation, to which the principle of “look-through tax treatment” is applied.
The fund distributes profits to investors without paying taxes; each of the investors pays taxes by the taxation applicable to it in its tax jurisdiction, which contributes to the tax transparency of the fund.
However, we note that a trust established as an LLC is required to keep accounting records and file an annual report for the fiscal year with the commercial registry.
Depending on the complexity of the structure and the scope of work, the timeframe for registration may vary. In our experience, the procedure usually takes approximately 2 ‑ 3 months. However, it should be noted that this is an approximate timeframe and may vary depending on the specific circumstances. When applying for the registration of a trust fund, it is important to deem possible delays related to the verification of documents and necessary activities.
The cost of implementing this project is 15,000 EUR + VAT, but this amount may vary depending on the circumstances of a particular case.
Please be advised that the legislation regulating the activities of a trust fund in Estonia may change over time, therefore, in order to fulfil all legal requirements of the regulator promptly, you will need the advice of specialists experienced in the implementation of such a project.
The COREDO team is ready to help you overcome the thorny path by providing qualified advice, customised solutions and continuous support at all registration stages.
A trust established as a limited liability company may manage its assets independently. In this case, the assets are managed by the general partner (täisosanik) in accordance with the terms and conditions set out in the limited liability company agreement. He may also enter into a management agreement with a third-party manager. A trust fund established in the form of a limited liability company may be managed by a small fund manager registered with the Estonian Financial Supervisory Authority (EFSA) – the body that supervises the registration and reporting of trust funds – or by a fund manager with a licence from Estonia or any other member state of the European Economic Area.
Under § 3 (6) IFS, a small fund manager is a person who:
As part of the process of setting up a trust fund, we can help you through the following steps:
Your success is our priority!
COREDO – EU Legal & Compliance Services Expert legal consulting, financial licensing (EMI, PSP, CASP under MiCA), and AML/CFT compliance across the European Union. Headquartered in Prague, we provide seamless regulatory solutions in Germany, Poland, Lithuania, and all 27 EU member states.
