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LEXTAL has acted as a local advisor in Estonia in the issuance of senior bonds by IuteCredit Finance SA for a total amount of EUR 40 million

LEXTAL has acted as a local advisor in Estonia in the issuance of senior bonds by IuteCredit Finance SA, the wholly owned subsidiary of IuteCredit Europe established and operating in Luxembourg, for a total amount of EUR 40 million, due 2023. The bonds are secured by claims arising from the Group’s loan portfolios and by guarantees of subsidiaries or equivalent securities. The bonds (ISIN: XS2033386603) are listed on the Open Market of Frankfurt Stock Exchange.

The task of LEXTAL was to assist in the preparation of Estonian legal documents (collateral agreements, legal opinions, etc) necessary for the bond issuance. As the previous local bond program was terminated in connection with the abovementioned bond issue, LEXTAL also advised the client on legal questions related to the bond program termination. AS IuteCredit Europe was advised by partner Ants Karu, partner Kristi Sild and attorney Henri Ratnik.

IuteCredit Europe is an international consumer credit company established in 2008. IuteCredit Europe is headquartered in Estonia and operates through subsidiaries in Moldova, Albania, Northern Macedonia, Kosovo and Bosnia and Herzegovina.

 

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LEXTAL advised Skandinaviska Enskilda Banken AB in EUR 500,000,000 syndicated finance transaction

LEXTAL advised Skandinaviska Enskilda Banken AB (publ), other banks and number of institutional investors in a EUR 500,000,000 financing to Adven (syndicated loan facility and notes’ issue).

Adven is the leading provider of energy and water services across the Nordic and Baltic countries. LEXTAL worked in cooperation with Allen & Overy (lead counsel) and Castren & Snellman (Finnish counsel).

LEXTAL team was led by partner Ants Karu.

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LEXTAL advised Santander Bank Polska in EUR 120,000,000 syndicated loan facility

LEXTAL advised Santander Bank Polska and other banks in connection with a EUR 120,000,000 syndicated loan facility to plywood manufacturing group Paged.

Advice was provided in cooperation with the lead counsel White & Case. LEXTAL team was led by partner Ants Karu.

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Is Estonia a crypto heaven? LEXTAL’s video blog

There’s been a great surge of international interest in establishing a cryptocurrency-based business here in Estonia from foreign investors. Investors are active both in the wallet/exchange side of crypto as well as the ICO side. So we figured we will give a short introduction into both of these here.

First – In Estonia there are two types of permits for operation in the field of cryptocurrencies:

  1. a permit for providers of a service of exchanging a virtual currency against a fiat currency and vice-versa (the so-called exchange permit); and
  2. a permit for providers of a virtual currency wallet service (the so-called wallet permit).

The scope of both of these permits is quite self-explanatory – one allows you to exchange crypto to fiat and vice versa and the other allows you to provide a wallet service to customers.

Acquisition of these permits will usually take around a month or two, though we have gotten a wallet permit registered recently in only two days as of issuing the application, so exceptions may occur (in both ways).

Second – It is possible to conduct an ICO in Estonia. For instance LEXTAL was closely involved with the Agrello project which raised nearly 31 million dollars in 2017 for a blockchain based smart contract project.

However, it is not possible to say in this short video what license (if any) you will need to conduct an ICO in Estonia. The variables are to great. It is possible that the token will be qualified as a security, a share of an investment fund, a donation or a number of other instruments. It may well be a combination of several different instruments.

In any case, the first step will be to analyse your token. What rights will it give to the token holders and how will it be used. Once the token structure is in place any lawyer worth their salt will be able to tell you what licenses you will need and what steps you must take.

Attorney Rauno Kinkar

rauno.kinkar@lextal.ee.

 

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The International Conference „Current Challenges of Estonian and European Insurance Law” sponsored by LEXTAL

Join the International Conference „Current Challenges of Estonian and European Insurance Law” held in Tartu (21 – 22 March 2019)!

It is the first international conference focused only in insurance law that is organised in Estonia. Acknowledged European experts of the insurance law, Estonian legal researchers and insurance practitioners (including Olavi-Jüri Luik from LEXTAL) will give speeches at the conference.

The working language will be English and Estonian. The first day speeches will be in English. The second day speeches will mainly be in Estonian with the simultaneous interpretation into English.

To register for this conference, please fill out the form (https://lnkd.in/dVJaDkb) by 28th of February.

There is a fee of € 50. The invoice will be sent to you after registration.

Program: https://lnkd.in/dYsuaga

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LEXTAL elected one of the most attractive employers for law students in Estonia

LEXTAL was elected as one of the most attractive employers in Estonia among legal students. LEXTAL ranked third!

The employer’s branding agency Instar conducted a study of job prospects and the brands of employers among undergraduates across Estonia. Over 5400 respondents participated in the study this year.

“This is a great honor for us. We are very proud for that achievement. We believe that the key to our success was our internship program. Our goal is to provide every year internships that focus on inspiring young colleagues. We have given students the promise that if they do their internship in LEXTAL, they can deal with substantive legal matters and try out the practical aspects legal work. Figuratively speaking, we do not send our young colleagues to just arrange the archives or to deal merely with technical work. What we have learned is that our young colleagues want personal approach and mentoring. An internship program cannot be merely a machine for the firm aimed at finding potential employees – we have rather focused on inspiring and mentoring our interns as young colleagues. This focus made our internship program very popular among Estonian law students,” explained Marge Männiko, the Managing Partner at LEXTAL.

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LEXTAL ranks high in Legal 500 EMEA

We are proud to announce that LEXTAL has been ranked by Legal 500 among other best Dispute Resolution, Tax, Commercial, Corporate, M&A and IP, IT and Telecoms teams in Estonia!

Legal 500 highlighted the following:

LEXTALs ‘efficient’ team is ‘proactive and takes the time to get to know its clients’. Ants Karu provides ‘very detailed advice tailored to each client’s individual circumstances’ and Margus Reiland ‘thinks outside the box’.

LEXTAL’s ‘fast and professional’ team is known for its experience in self-driving vehicles and cybercrime. Associate Rauno Kinkar is ‘very experienced and knowledgeable’.

The ‘diligent and responsive’ Ants Karu at LEXTAL ‘combines a good knowledge of tax and corporate law while keeping a clear focus on what is important and what is not’. Recent work highlights include advising Sevenoil and three other sellers on the sale of seven gas stations.

LEXTAL’s ‘excellent and quick team’ is experienced in both litigation and arbitration. The ‘thorough’ Olavi-Jüri Luik has ‘deep knowledge of contentious insurance contract matters’ and Urmas Ustav heads the team.

You can find further information on the Legal 500 website.

 

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Chambers and Partners ranked Oliver Nääs among the best Dispute Resolution attorneys in Estonia

International legal dictionary Chambers Europe 2018 ranked Oliver Nääs from LEXTAL among the best Dispute Resolution attorneys in Estonia.

According to Chambers LEXTAL has a well-regarded team known for acting on a spectrum of civil and administrative proceedings and white-collar crime cases. Experienced in restructuring and insolvency and insurance-related disputes, as well as commercial issues. Oliver Nääs enters the rankings in recognition of his strong market presence. Commentators recognise him as “one of the most renowned” criminal disputes lawyers, who is active in “high-profile white-collar crime” mandates.

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New regulation on registration of true beneficial owners in Latvia

On 9 November 2017, amendments to the “Law on the Prevention of Money Laundering and Terrorism Financing” have entered into force. The main purpose of amendments is to prevent money laundering and terrorism financing and provide a free access to a correct, actual information on the true beneficial owners of legal entities. Consequently, the amendments provide an obligation for all legal entities, registered in the Register of Enterprises, to provide the information on their beneficial owners.

New regulation on registration of true beneficial owners

The amendments provide that the true beneficial owner of the legal entity is a natural person:

  • who owns, or who directly or indirectly controls at least 25 per cent of the legal entity capital shares or stocks with voting rights, or;
  • who directly or indirectly controls the legal entity in any other way.

We would like to draw your attention to the fact that each situation is individual and provided border of the 25 per cent is the minimal border, which requires the identification of the true beneficial owner. Whereas the total amount of participation is less than 25 per cent, it has to be evaluated whether there is another way to identify natural persons who actually control the legal entity according to the real situation (for example, concluded contracts, other mechanism of control).

New disclosure obligations

New disclosure obligations applies to legal entities, registered in the Register of Enterprises, including, but not limited to, general partnerships, foundations, co-operative societies, limited partnerships, trade unions, limited liability companies, association of trade unions, joint stock companies, permanent trade unions, associations of political parties, European companies.

Amendments provide only two exclusions from the obligation to provide information on the beneficial owner:

  • if information about the true beneficial owner has already been submitted to the Register of Enterprises according to other laws and the way how the control is performed rises from the status of the shareholder, owner, founder or member of the management board;
  • if the beneficial owner is a stockholder in a joint-stock company, stocks of which have been introduced to regulated market and the way how the control is performed rises from the status of stockholder.

We would like to note that there is an obligation to submit information on true beneficial owners to the Register of Enterprises before 1 March 2018. However, in any case, if legal entity submits an application to the Register of Enterprises before 01.03.2018, for registration (foundation) of a legal entity, or changes in composition of shareholders or management board, it shall be provided the information on the beneficial owners.

It is very important to remember that currently both administrative and criminal liability is applicable for such violations. In accordance with Section 1663 of the Latvian Administrative Violations Code, failure to submit the information or documents specified by regulatory enactments on time to the Register of Enterprises, will result in a warning or a fine for an amount from EUR 70 up to EUR 430. If the same violations occur within a year after the imposition of an administrative punishment a new fine shall be imposed for an amount from EUR 210 up to EUR 700.

According to Section 272 of the Criminal law, for failure to submit information stipulated by the law or for submission of knowingly false information, sanction goes from a fine to short-term detention, or community works.

Furthermore, regarding commercial legal entities, the management board may be held liable for failure to provide the information about the true beneficial owners, if the company will suffer damages as a result of the violation, and if the management board could not be able to prove that it acted as a good and proper owner

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New corporate regulation in Estonia: contact person

As from 15 January 2018 Estonian company must designate a “contact person” if its management board is located outside of Estonia. If the management board of is located in Estonia, appointment of a “contact person” is optional.

What does “contact person” mean?

Estonian company (EstCo), as well a foreign company that has a branch in Estonia (branch), may appoint a contact person to whom the procedural documents of EstCo and the declarations of intent addressed to EstCo may be delivered in Estonia. Upon delivery of a procedural document or declaration of intent to the contact person, the respective procedural document or declaration of intent is deemed to have been delivered also to EstCo.
Contact person will be registered in the commercial register.

What are “procedural documents and declarations of intent”?

The procedural documents may be court documents (for example lawsuit filed against EstCo), communication from tax office or other state institutions, etc. The declarations of intent may be letters from business partners (for example notification of renewal or termination of a contract) or any other similar business correspondence.

Do I need to have a contact person?

If the management board of EstCo is located in a foreign state, EstCo must designate a contact person. This obligation also applies to a branch, unless the residence of at least 50% of branch managers is in Estonia, in another EEA member state or in Switzerland.

If the management board of EstCo is located in Estonia, appointment of a contact person is optional.

The location of the management board is undefined vague term. It is generally understood as a place where the management board of EstCo carries out the everyday management of EstCo.

Who can act as a contact person?

If EstCo’s management board is located in a foreign state, then:

a) only a notary, notary’s office, attorney, law firm, sworn auditor, audit firm, tax representative of a non-resident for the purposes of the Taxation Act or a trust and company service provider specified in § 8 of the Money Laundering and Terrorist Financing Prevention Act. The address of such contact person shall be considered the address of EstCo; or
b) if management board member, shareholder or procurator of EstCo has a residence in Estonia, anyone of them.

If EstCo’s management board is located in Estonia, then contact person can be anyone having Estonian address.

How can I appoint a contact person?

First step is to agree the appointment with the contact person and then submit a notarised or digitally signed application to the commercial register, accompanied with the contact person’s consent.

Can I replace a contact person?

Yes, EstCo can replace contact person anytime. In addition, the contact person can resign – how and when shall depend on the agreement between EstCo and the contact person.

Can LEXTAL act as a contact person?

Yes.

If you have any questions about the topic at hand, please do not hesitate to contact partner Ants Karu.

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