When using Xolo Leap, investment activities are supported in Pro and Premium service plans and your Estonian company is allowed to make the following investments:
- Buy-sell shares in publicly traded companies and funds (LEI code requirement)
- Buy-sell cryptocurrencies for investment purposes only
- Invest in start-ups or other private companies registered in the EU, UK and US based on an agreement (incl. parties' details, investment structure, financial terms) either a convertible loan or equity, receiving a minority stake and no controlling rights (less than 20%)
- Lending via internationally recognized crowd-funding platforms if they provide you with a business account
- Lending to/from start-ups or other private companies registered in the EU, UK and US based on a loan agreement (incl. parties' details, loan amount, market interest rate, payment deadline)
This means the following investments are not allowed (not an exhaustive list):
- Buying real estate, land, a car, or any other physical assets
- Buying physical gold/silver
- Buying a controlling/majority share in another company
- Lending to yourself (as a shareholder/board member of the company)
Also, investment and financial activities that require a regulatory license in Estonia and are subject to supervision by the Financial Supervision Authority (or other competent authorities) are not allowed:
- Offering investment advice
- Investing other legal and/or private persons funds as a service
- Payment and e-money services
- Crypto and virtual asset services
- Credit and lending services
- Lending to/from a friend or any other individual directly
Please note that for investing and lending via platforms you first need to open a business account for your company on that certain platform. Not all service providers have this option available, so please make sure that the partner you choose can open a business account for you. Deposits and payments to accounts that are not registered on the name of your company are regarded as transactions for private benefit (which are taxable). It means that even if you personally have an investment account open with a service provider you cannot use that account to invest your company's money, because the assets on that account would legally belong to the individual, not the company.
For accounting purposes, you would need to provide us with a balance report or statement with the total value of the investments on a yearly basis. Please make sure that the platform/marketplace that you use can provide you with this data or that you are able to compile the report yourself. For reporting purposes, it is the sole responsibility of the board member to review and confirm the balance of the assets (what type of investments, where, and how much) that the company had at the end of the financial year.
From the taxation perspective, the gains/losses from investment activities are treated in the same way as gains/losses earned from your core business activities. If you don't take any money out from your company, there's no obligation to pay corporate income tax in Estonia.
Advice regarding investment opportunities is beyond our competence, but there are other professional service providers you can turn to. For instance, LHV is also known for its investing capabilities. You can read more about it on their website.
You can lend money to your company for investing, but the funds must come directly from the shareholder's account to the company's bank account. It means that you are not allowed to invest anyone else's money in the name of your company, because otherwise the company will be required to have a separate activity license in Estonia. To comply with the rules set by Xolo, you may transfer funds from your personal account to your business account, using "Loan from Shareholder" as the transfer description. If the total loan amount exceeds €10 000, additional documentation is required to explain the source of the funds and how they were acquired.