Any profit earned by the fund will be treated as the profit of the investors (i.e. This means that the LPF is not a person liable for tax in Estonia. Taxation and liabilitiesĪll LPF-s registered in Estonia are tax transparent. The General Partners that are registered with the FSA are required to submit once a year to the FSA the data on its managed funds and the fund’s investment policies. (2) the fund manages less than EUR 500M total assets if all managed funds are unleveraged and any investments made into any funds do not allow exits within 5 years as of the date of the investments made. (1) manages less than EUR 100M total assets (incl. This means that the General Partner either: This option can be used if the General Partner only manages small funds. In practice, most General Partners use the third option as it comes with the least supervisory obligations for the activities of the fund, including no requirements to the share capital, to the own funds of an GP and fewer reporting obligations. registered its activities with FSA and acquired an authorisation from the FIU.obtained an activity license of a fund manager from FSA, or.obtained an investment fund manager activity license from an EEA state.The General Partner can manage an LPF if it is an investment fund manager that has either: Hedman attorneys will provide you with end-to-end services, including representation upon request (power of attorney). Step 3: General Partner submits an application together with the statement by the FSA to the Estonian Commercial Register to establish the LPF. Step 2: General Partner applies for a registration or an authorisation from the FSA as a fund management company. Step 1: Registering a General Partner in Estonia (or using a pre-existing legal entity). The registration process of the fund can be divided into three steps: fast registration process – up to 5 working days for the LPF to be entered into the registry, up to 12 months if the General Partner needs to register or authorise its activities with the Estonian Financial Supervision Authority (“FSA”) and, where applicable acquire an authorisation from the Financial Intelligence Unit (“FIU”).considerably lower cost of establishment compared to the UK and Luxembourg.no requirement to publish the amount of the investments made by each investor.no requirement to publish the identity of its limited partners (investors).There are multiple benefits to establishing and running an Estonian LPF: This regime enables high net worth investors to easily set up a VC / private equity fund in Estonia and allows the partners to shape the relations between themselves in a flexible manner within the Limited Partnership Agreement (“LPA”). To request a consultation, please contact us:įollowing the UK’s and Luxembourg’s lead on designing attractive investment schemes for closed-end collective private equity and venture capital investments, Estonia has implemented the Limited Partnership Fund (“LPF”) structure (similar to the Private Fund Limited Partnership or PFLP in the UK, and to Société en Commandite Spéciale or SCSp in Luxembourg).Hedman Law Firm, an experienced partner. Flexibility of the Limited Partnership Agreement (“LPA”) terms.Legal obligations of the General Partner.
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