If your company earns fees by backing other businesses’ obligations — performance bonds for contractors, payment guarantees for suppliers, advance payment or rent guarantees — Estonia lets you do it as a non-bank guarantor. Providing guarantees and commitments to companies runs under a financial institution license from the Financial Intelligence Unit (FIU): a simplified permit built around anti-money laundering compliance rather than prudential banking rules.
Application documents, the state fee and processing time are covered on our financial institution license service page.
Quick answer
Guarantees and commitments offered to legal entities as a regular business require an activity license from the FIU (Rahapesu Andmebüroo). Consumers, insurance-type products or handling client money can bring the model under Finantsinspektsioon. The FIU license is national and carries no EU passport.
Does Your Guarantee Business Need a License?
Estonian law lists security and guarantee transactions, along with other deals that create binding future obligations, among regulated financial services (Credit Institutions Act § 6(1) point 6). A company becomes a financial institution when this is its main and permanent activity (§ 5). In practice that covers performance, advance payment, bid, payment, warranty and commercial rent guarantees issued for a fee to third parties.
Every guarantee has three parties: the principal (your client, for example a contractor), the beneficiary (the project owner, supplier or landlord it protects) and the guarantor (your company).
The Law of Obligations Act distinguishes a surety (käendus), which depends on the underlying debt, from an independent guarantee (garantii), which is payable on its own terms. International practice calls the latter an on-demand guarantee and often issues it under the ICC’s URDG 758 rules; a conditional bond pays only once the principal’s default is shown. Whichever form you use, the license depends on who your clients are and how the product is built:
| Your model | Regime to look at |
|---|---|
| You issue performance bonds or payment guarantees to companies for a fee | FIU activity license |
| A platform guarantees B2B buyers’ payments to suppliers | FIU activity license |
| You combine guarantees with loans or leasing to companies | One FIU license covering all three services |
| A parent company guarantees its own subsidiary’s debt | Usually not a service to third parties — review the arrangement |
| Your guarantees are sold to private individuals | Consumer rules may apply — check with Finantsinspektsioon |
| You pool many clients’ risks against premiums | Insurance activity — insurer license from Finantsinspektsioon |
| You also hold or transfer clients’ money | Payment institution or credit institution regime |
When the FIU and Finantsinspektsioon could both be relevant, the FIU’s own guidance advises asking the authority before applying. A wrong choice of regime leads to a refused application or to operating without the correct permit, so a legal opinion on the product structure is a sound starting point.
Which Regulator Licenses Guarantee Providers
Two authorities issue permits for financial services in Estonia. Under the Money Laundering and Terrorist Financing Prevention Act (§ 70(1) point 1), a financial institution needs an activity license, and the FIU names providers of security and guarantee transactions among the businesses it licenses, alongside B2B lenders and lessors. Banks, payment institutions and insurers are authorised by Finantsinspektsioon instead.
For a non-bank guarantor, the difference lies in the type of supervision. The FIU checks anti-money laundering and sanctions compliance, meaning who owns and runs the company and how it knows its clients; it sets no capital ratios, liquidity rules or conduct requirements of the kind Finantsinspektsioon applies to banks and insurers.
A lighter license does not mean lighter risk. A guarantor that cannot pay when a guarantee is called faces claims from the beneficiary and questions from the regulator, so careful underwriting and sufficient own funds remain a commercial necessity even without a statutory ratio.
Limits of the Non-Bank Guarantor Route
The FIU route suits a clean business-to-business guarantee model. Check three limits before you build the product around it.
Consumers and Insurance-Type Products
Once private individuals become clients — for example, through a guarantee attached to a consumer’s loan or lease — the product may qualify as consumer credit. The Creditors and Credit Intermediaries Act defines credit broadly to include other forms of financing, and consumer credit needs a creditor license from Finantsinspektsioon. A product that pools many clients’ risks against premiums, as surety insurance does, is insurance activity regardless of its name.
Cross-Border Clients
EU passporting exists for licenses based on EU directives: credit institutions, payment and e-money institutions, investment firms and insurers. A guarantee license from Rahapesu Andmebüroo is a national permit, so each target country’s rules must be checked separately.
No EU passport
In Germany, for example, assuming guarantees for others is classified as a banking business, so actively targeting German clients can trigger a local authorisation requirement. Some other member states do not regulate B2B guarantees at all.
Bank Guarantees, SBLCs and Beneficiary Acceptance
A guarantee is only useful if the beneficiary accepts it. Many private counterparties accept one from a licensed non-bank guarantor, but public procurers, some large corporates and landlords insist on a bank guarantee or an insurer’s surety bond. Confirm acceptance with your target beneficiaries before launch.
A guarantee issued by an FIU-licensed company is its own undertaking, not a bank guarantee or a standby letter of credit (SBLC), and should never be marketed as one. Offers to lease or monetise bank instruments are a well-known fraud pattern, so business plans that resemble them draw close scrutiny from the FIU.
What the FIU Checks in a Guarantee Business
A guarantee provider is reviewed like any other financial institution, with the focus on people and controls; the document list is on our financial institution license page.
- No valid convictions for offences against the state, money laundering or other intentional crimes — for the company, its management board members, procurators, beneficial owners and owners.
- Good business reputation of the same persons. It is presumed unless something casts doubt on it, such as having caused a supervised company’s bankruptcy or license revocation, a business ban or international sanctions.
- A qualified contact person (money laundering reporting officer) with suitable education, experience and impeccable reputation; the appointment is coordinated with the FIU.
Once licensed, the guarantor is an obliged entity under the Money Laundering Act: client due diligence, a written risk assessment, suspicious activity reporting and a contact person in place at all times, which an outsourced MLRO can cover. Repeated non-compliance leads to precepts and, in the end, to revocation; see how FIU supervision works in practice.
Eesti Firma is itself licensed by the FIU as a trust and company service provider. We review guarantee business models, confirm the correct regime and prepare license applications for founders who want to start a guarantee company in Estonia, together with the AML framework the regulator expects.
FAQ
No. Guarantees and commitments provided to legal entities as a regular business, from performance bonds to payment guarantees, fall under a financial institution license from the Financial Intelligence Unit. A bank license becomes relevant only if the business also takes deposits or other repayable funds from the public.
Yes. Nationality is no bar: as with any company, a foreigner can own 100% of an Estonian company. The FIU verifies that owners, beneficial owners and board members have no valid convictions for the relevant offences and a sound business reputation. The procedure runs in Estonian, so foreign-language documents must be filed with Estonian translations.
No. It issues its own guarantee or surety bond. A beneficiary that asks for a bank guarantee or a standby letter of credit expects a bank as the issuer.
Not by itself. The license is national and has no EU passport, so the rules of each target country must be checked; in some of them guarantee business is reserved for banks.
Usually not. An intra-group guarantee is not a financial service provided to third parties, and the license targets companies whose main and permanent activity is issuing guarantees. The specific arrangement should still be reviewed.
