How to check the background of an Estonia-established business partner

In uncertain economic conditions, it is wise to conduct a background check when selling or buying goods/services to or from a new business partner. It's important to understand the financial situation of the transaction partner to ensure their solvency. This is crucial from both the seller's perspective - whether the client can pay for the purchased services or goods, and from the buyer's perspective - whether the company has the real capability to deliver the necessary goods in the required volume and time.

It would also be advisable to occasionally re-conduct background checks on long-term cooperation partners, especially if payments or deliveries have started to be delayed. In situations with long payment terms, thorough background checks on clients are especially important, as the response time to potential problems is long. Under conditions of inflation, it is advisable to keep payment terms as short as possible, and in case of any doubts or problems, to settle with advance payments. Offering a quick payment bonus could also be a solution to motivate the transaction partner to pay quickly for goods/services under inflationary conditions.

Payment and delivery capability is only one aspect to focus on today. In addition, in today's foreign policy conditions, it is important to know who is in the potential client's or supplier's ownership circle. For some types of companies, legislation defines what information must be collected before entering into agreements with a client or supplier. Thirdly, ethical questions should not be forgotten, as fair trade and sustainability issues are increasingly important to potential consumers.

For conducting a background check on a business partner, it is wise to use multiple different channels. In case the potential customer or vendor is from another country, it may be difficult to understand what information is available and which are the best channels. One of the main channels for searching information remain the different search engines, which are supplemented by newer artificial intelligence-based solutions such as Bing, Gemini, newer version of ChatGPT, and others. The public information space can provide initial information about a potential business partner, but it is worth checking other channels too. Here is an overview of some of the main channels through which it is possible to check an Estonia-based business partner's background and financial position.

Business Register

A very good primary source is the e-Business Register portal, which provides an overview of business and entrepreneurship prohibitions and the fulfilment or non-fulfilment of various reporting obligations of the company, including whether annual reports and necessary tax declarations have been submitted, taxes paid, etc. The Business Register also provides insights into the company's ownership and actual beneficiaries. However, it's important to remember that this information may be added with a time lag. Additionally, the portal allows for checking the involvement of key personnel of the company with other companies. If there are public announcements related to the specific company of interest, this information is also displayed in the portal. Companies can be searched by name, registration code, or VAT number here: https://ariregister.rik.ee/eng

Tax and Customs Board Debt Inquiry

If a company owes taxes to the state or has not submitted declarations, it can generally be assumed that there may also be problems with payments to suppliers. Through the Tax and Customs Board's debt inquiry, information can be obtained on whether the company has debts, for what, and when these debts were incurred. It also provides information on whether the company is actively dealing with the debt: whether the debt is scheduled for payment or disputed. The debt inquiry can be performed here: https://apps.emta.ee/saqu/public/taxdebt?lang=en

Paid Information Portals

In Estonia, there are several paid portals that compile information from the Business Register and the Tax and Customs Board and add data collected from other sources, such as possible other payment defaults. The main environments used are e-Krediidiinfo, Infopank by Äripäev and Inforegister. All of these have information available in English as well.

Other Public Registers

In Estonia, there are various other registers where information can be obtained about the company or individuals associated with it: · Official Announcements https://www.ametlikudteadaanded.ee/eng/index In Official Announcements portal, other important information about the company is listed, such as possible mergers, liquidation or bankruptcy proceedings, etc. Information is available in English only partially; therefore, translation engines would be needed to see the details of the announcements.

  • The Consumer Protection Blacklist is maintained by the Consumer Protection and Technical Regulatory Authority, which lists companies that do not comply with the valid decision of the Consumer Disputes Committee. The Blacklist is only available in Estonian: https://jvis.ttja.ee/modules/tarbijavaidluskomisjoni-otsused/mustnimekiri
  • Inquiries about a company or individuals associated with it can be made through the Criminal Records Register, inquiries are paid, and it is necessary to have local ID or EU e-ID to access the service, translation is needed with browser: https://www.rik.ee/en/e-file
Tax and Customs Board Guidelines

The Estonian Tax and Customs Board has also provided detailed guidelines on conducting background checks on business partners:

  • https://www.emta.ee/en/business-client/e-services-training-courses/advice/how-check-background-business-partner
  • https://www.emta.ee/en/business-client/e-services-training-courses/advice/monitoring-your-tax-affairs