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Xolo currently only supports setting up companies with an individual as a shareholder and only an Estonian e-resident can be added as a shareholder once the company set up is finished. This limitation comes from legal and practical concerns.

Namely, since Xolo is an Estonian FIU licensed service provider, we're obliged to detect the ultimate beneficial owners of any company we accept as a customer. While it's easier to achieve this when a company has only one shareholder and he/she is an individual, it's a much tougher task if a company has a legal entity as a shareholder, and the entity is registered outside Estonia.

Unfortunately, we don't have sufficient access to relevant databases to check the background of the legal entity and the people (or other legal entities) involved as the ultimate beneficial owners. And if there are any changes among the shareholders of the company who controls our customer, we have very limited ways to be informed of it. The possible risk vs reward don't match here, and it's better for us not to support companies owned by other companies/entities.

Our banking partner LHV, and the Estonian tax authorities, follow a similar logic - having a legal entity registered outside Estonia as a controlling shareholder in a company registered in Estonia usually raises a red flag. We don't claim it's a total blocker, but it raises more questions automatically, even if everything is legitimate. It's simply a question of transparency.

From a practical point of view, if all of your company's shares belong to another legal entity, it means the so-called parent company has to consolidate the financials of the Estonian company. This means there might be country-specific requirements/expectations towards the accounting and reporting of the Estonian company.

In contrast, Xolo has taken a commitment to make sure your company's accounting and financial reporting meet the requirements of Estonia, but we don't have the knowledge nor willingness to comply with other rules in parallel. Again, the limitation comes from the standardised nature of Xolo's service. Since it would be an exceptional request, the possible reward wouldn't justify such a tailored approach.