Business is a severe environment, where you always must be ready for fight and unexpected turns. The case is that many people deny fair competition and transparent work principles, giving preference to dirty tricks and dishonest manipulations. It would be no exaggeration to say that every entrepreneur faces similar negative situations during his or her professional life. Finding him- or herself in such a situation, a person seeks assistance from the state, but sometimes such shady transactions are conducted in such a delicate way that the state is powerless.
Similar situations happen all over the world and in European countries as well. Estonia is also among the countries included in such statistics, though the level of fraud here is less than in other countries. Nevertheless, one should exercise caution in certain nuances, otherwise consequences can be extremely negative – up to a loss of business.
How to Lose Control over Your Business: a History to Consider
Non-residents of Estonia, who launched a business in this country, can be involved in a very unpleasant story, which can be easily avoided by observing certain precautions. We will give a real and vivid example.
One entrepreneur, who is not a resident of Estonia, registered his company and made a resident of the country his partner. Perhaps, the man wanted to have a constant control over all processes of the company that is why he relied on his acquaintance and appointed him as a co-founder. Having completed all necessary procedures, after expiry of his visa the business owner with peace of mind returned back home and looked forward to future profits which his promising enterprise would generate for him. But later it turned out that his companion simply stopped to communicate with him, he didn’t provide information about activities of the company and used his position to get all income, dividing it among employees at his discretion. As the result of such manipulations the affected entrepreneur can’t come to Estonia, because his own company doesn’t send an invitation to him (business visa is not issued), and he can’t enter the country for tourist purposes because he is a member of the board of an enterprise.
Thus, business owner comes to a standstill, because he will have to bear all debts a company may have due to his partner’s fault and he can’t influence his company. And what is even worse, there are no opportunities to do anything on legal grounds. According to the law, a dishonest companion violates nothing, because he is an owner of the enterprise. As the result, the foreign entrepreneur lost his business, though he is still its owner.
The case is that the entrepreneur made a fatal error while registration of the company – he appointed as a co-founder a person who has constant access to administration of the enterprise, when he is abroad.
Having analyzed the situation and having identified one of the errors which led to the collapse, we can also identify other factors which can affect conduct of business.
How Not to Get in Troubles, When Registering a Business Abroad
There are a lot of situations which lead to the collapse of business, registered abroad, in Estonia as well. It is quiet easy to avert such situation, you just need to take into account several nuances and always remember that prosperity of business or its cheating depends only on entrepreneur’s care.
LumoTrust has highlighted the following theses, which will ensure protection of a company registered abroad:
- As we can see from the provided example, one shouldn’t take as a co-founder a person who will have access to the company and have equal share with a foreign founder. Of course, it applies not to all situations, but if you don’t have an absolute confidence in your companion, it’s better to refuse his services and open your business independently
- It’s necessary to seek advice of professionals who can not only explain all legal nuances, but also possible risks for a new company. Specialized assistance ensures understanding of the situation and security of the launched business
- Never transfer control over your company to third parties. An entrepreneur should always have influence on his or her business, even if he or she works from abroad. Of course, you should appoint a contact person, who will be responsible for work processes, but at that such person mustn’t control fundamental processes – payments of dividends, salary etc.
The are other issues one should consider while registration of a company abroad, including Estonia, but the listed theses will form the knowledge base thanks to which it’s possible to avoid cheating of a company by fraudsters.
Services of LumoTrust ensure owner’s complete control over its business with qualified assistance of specialists
Information provided in the article will definitely make every entrepreneur to pay more attention to the selection of partners for registration of his or her business in Estonia and other countries. You can be confident in future success only if you work with a reliable company which will ensure qualitative service of an enterprise, while the owner is abroad. LumoTrust provides such guarantees and this is confirmed by many positive testimonials from our clients.
With the help of our services every business owner will be able to manage his or her company from abroad, while our specialists resolve all tasks in Estonia. Such relations will ensure qualitative development of a company without any risks.