It is no secret that the Estonian jurisdiction offers the most attractive tax conditions for the managers of alternative investment funds (AIF). That is why many fund managers seek to register their management company and all funds under that management company in the Republic of Estonia. However, they do not take into account one of the most important requirements of the Estonian regulator "Finantsinspektsioon". The essence of this requirement is that the investment activity (and other activities) of the management company must be beneficial for Estonia.
- The Board member of the management company must be an Estonian resident.
- The AML officer of the management company must be an Estonian resident.
- The management company must have a real presence in the Republic of Estonia – the real office place where the daily work will be carried out.
- The headquarter (the management center) of the management company must have physical presence in Estonia.
- This should be transparent how the Board of the management company will comply with the FATF recommendation of three lines of defense.
- The internal audit must be performed by the Estonian resident (person or company).
Thus, it is no longer possible to register the management company of the fund if there is no connection with Estonia and if the investment structure is not beneficial for the Republic of Estonia. Gone are the days when a management company of the fund was associated with Estonia only by having a legal address in the country.