When a loan from a bank or a licensed creditor goes into arrears, the work of collecting it, renegotiating it and handling the borrower's complaints is regulated in Estonia. A company whose main business is this work is a credit servicer (krediidiinkasso) and needs an activity licence from the Financial Supervision Authority (Finantsinspektsioon) under the Credit Servicers and Credit Purchasers Act (krediidiinkassode ja -ostjate seadus, KIOS), which transposes Directive (EU) 2021/2167. This guide explains what counts as credit servicing, what the licence requires, the capital, the documents, the rules on borrowers' money and complaints, and the state fee. Our prices, including each document as an add-on, are on the credit licensing page.
The rules below are those of KIOS in the wording in force from 30 June 2026 (Riigi Teataja). The guide is general information, not legal advice.
What a credit servicer is
Under KIOS § 3(1), a credit servicer is a company whose main and permanent business includes credit servicing activity: it manages a credit agreement of a credit institution or a creditor that is in default, either for itself or on behalf of a credit purchaser. Credit servicing activity means one or more of the following in relation to such a defaulted credit agreement (§ 3(2)):
- collecting or recovering payments due from the borrower;
- negotiating with the borrower about the claims or the terms of the agreement, including on the credit purchaser's instructions;
- handling complaints related to the agreement or the claims; and
- informing the borrower of changes in interest rates, charges or payments due.
A credit servicer may also acquire or manage claims arising from agreements other than credit agreements, and may outsource parts of its servicing activity to a credit servicing service provider (§ 3(3)). It may operate only as a public or private limited company (aktsiaselts or osaühing).
The definition is narrower than "debt collection" in everyday language. It concerns defaulted credit agreements granted by banks and licensed creditors. A company that collects, say, unpaid utility or telecom invoices is not a credit servicer within KIOS, though other rules apply to it. On our licensed companies page, "Debt collection company — corporate structure only, no FSA authorisation" is such a company without the licence.
Credit purchasers
A credit purchaser buys the creditor's rights under a defaulted credit agreement. KIOS regulates credit purchasers too — for example their right to information from the selling credit institution before the purchase (§ 61) and the duty of a third-country purchaser to appoint a representative in a Member State (§ 62) — but the activity licence in § 6 is for the credit servicer. In practice a credit purchaser appoints a licensed credit servicer, a credit institution or a creditor to service the credit agreements it buys.
The licence
To operate as a credit servicer a company needs an activity licence (KIOS § 6(1)). The licence is issued for an unlimited period, is not valid for subsidiaries and cannot be transferred (§ 6(2)–(3)). It is granted and revoked by the Financial Supervision Authority (§ 6(4)). The authority may refuse the licence, among other grounds, if the applicant does not meet the requirements of the Act, its share capital is not fully paid in, or its managers, auditor, internal auditor or qualifying shareholders do not meet the requirements (§ 11).
The Financial Supervision Authority states that it decides on the licence within three months of receiving all the required documents and information, and in any event within six months of receiving the application (fi.ee — credit servicer licence). These are the authority's periods, not a promise about your project.
Capital
A credit servicer's share capital must be fully paid in and must be at least 25,000 euros (KIOS § 46). The capital belongs to the company; it is not a fee and not part of our price.
What the application contains
KIOS § 7(1) lists the documents. In summary:
- the articles of association;
- a business plan meeting § 8 — the nature, organisation, management structure and internal control of the business, the planned services, customers and competitors, the rights and obligations of the persons involved, and financial plans and forecasts;
- the amount of share capital and proof that it has been paid in, and the address of the head office;
- information on the management board and supervisory board members, and extracts from criminal records for managers and qualifying shareholders;
- the information on qualifying holdings set out in § 29;
- internal rules meeting §§ 41 and 42, including accounting rules and the procedure for the internal control system;
- internal procedures for registering and resolving borrowers' complaints under § 60;
- where relevant, the outsourcing agreement with a credit servicing service provider, and information on the auditor and internal auditor;
- a description of the organisational structure and of the IT systems and other technical means needed for the services;
- whether the applicant intends to receive and hold borrowers' funds — and if so, the details of a payment account meeting § 47 (§ 7(2)); and
- proof of payment of the procedural fee.
Each document on this list is an add-on line on our credit licensing page, so that a client who already has some of them pays only for the rest.
Borrowers' money
If borrowers pay the credit servicer, the servicer must keep the funds paid for the fulfilment of their obligations on a separate payment account and may not use them in its own business, even where it has an agreement with the credit purchaser (KIOS § 47). The payment account is opened by a bank or payment institution at its discretion. Our guide to a bank account for a licensed company explains why this step needs planning.
Complaints
A credit servicer must set up, by internal rules, a procedure for registering and resolving borrowers' complaints that allows complaints to be resolved quickly through an effective and transparent process (KIOS § 60). For consumer borrowers this is a central part of the supervision and one of the first documents the authority reads.
State fee
The Financial Supervision Authority charges a procedural fee of 3,000 euros for a credit servicer licence application (Financial Supervision Authority Act § 45³(2), in the wording in force on 29 September 2026; also stated on the Financial Supervision Authority's page). Supervision fees follow after authorisation. See our guide to state fees and capital for EU licences.
How we work
We start by checking whether your business is credit servicing within KIOS at all — who the creditors are, whether the agreements are in default, whether you will hold borrowers' money. Then we prepare the business plan, the internal rules and internal control system, the complaints procedure, the IT description and the qualifying-holding information, coordinate the fit-and-proper information about the managers, submit the application with you and manage the authority's questions. Every project starts with a written quote by email. Our fee is our professional fee for the work described; the licence is granted or refused by the Financial Supervision Authority, and we cannot promise the outcome or its timing.
Outsourcing to a service provider
A credit servicer may outsource part of its credit servicing activities to a third party, a credit servicing service provider, to perform its obligations better (KIOS § 3(3)). Where it does, the outsourcing agreement is part of the licence application (§ 7(1)), and the servicer remains responsible for complying with the Act. Outsourcing is common for call centres, letters and payment processing; it is not a way to operate a credit servicing business without a licence.
Frequently asked questions
Do I need a licence to collect overdue invoices?
A KIOS licence is needed for servicing defaulted credit agreements of credit institutions and creditors as a main and permanent business. Collecting ordinary overdue invoices is not credit servicing within KIOS, although other rules apply. We check your model in the quote.
How much capital does a credit servicer need?
Share capital of at least 25,000 euros, fully paid in (KIOS § 46).
Can a credit servicer licence be transferred to another company?
No. The licence cannot be transferred and does not apply to subsidiaries (KIOS § 6(3)).
Must borrowers' payments be kept separately?
Yes, if the servicer receives them: they must be held on a separate payment account and not used in its own business (KIOS § 47).
What is the state fee?
3,000 euros under § 45³(2) of the Financial Supervision Authority Act, in the wording in force on 29 September 2026.