On the 5th of December the Estonian Parliament accepted an important change to the Commerical Code which will come to force at the start of the new year. Starting from January 1, 2019 the establishment of privated limited companies in Estonia no longer requires opening a bank account in one of the Estonian banks.
According to the amendment, an established private limited company (hereinafter PLC) has the right to use any account of a bank or financial institution that is located in a member state of the European Economic Area (EEA). This means, that for example, you may use an account opened at Transferwise or Monese. This change greatly simplifies the life of e-Residents who want to start a business in Estonia and it also provides the possibility to involve more foreign investments into Estonian start-up companies. To this date, the current legislation has made it difficult for non-residents to open a bank account on behalf of a company in Estonia. Mainly due to banks refusing to open bank accounts because of strict anti money-laundering regulations. An account is necessary, as the monetary share capital contribution (a minimum of 2500 EUR) will have to be transferred there when establishing a company.
The bill does not affect the establishment of Public Limited Companies that still require you to open a securities account in one of the Estonian banks.
The head of the Estonian e-Residency program, Kaspar Korjus, commented that this is good news for entrepreneurs worldwide – it helps more people benefit from the e-Residency program in a trustworthy way and promotes foreign investments into Estonian PLC-s. He also added: ’’There will never be a single payment solution that is suitable or available to every company. This is why we must offer a wider selection of payment services’’.
In addition, the ways in which you can make monetary contributions will expand to both PLC’s already registered/established and to PLCs that will be registered in the future. From now on, the monetary contribution can be made at foreign credit institutions/financial institutions, whereas previously it could only be made at Estonian credit institutions. This has an important impact on involving more foreign investments into Estonian companies.
There was also another minor change to the commerical code: the entry and changing of the business-owner's email address to the Commercial Register has been made exempt from state fees. Up until now making changes to this entry involved €18 in state fees.
Doing business via PLC’s in Estonia is one of the major reasons why foreigners consider becoming an e-Resident. The Estonian banking sector so far has clearly been conservative in opening bank accounts for non-residents. The reason being it is much more difficult to go through the Know Your Client procedure (KYC) - to identify the client’s actual origin of assets/property and other aspects that are important from the standpoint of anti-money laundering regulations. On the homepage of the European Banking Authority you have the chance to familiarize yourself with the credit institutions register that has information on credit institutions and their subsidiaries of EEA state members and information on the credit institution subsidiaries of third-world countries.
Get your Estonian company without a local bank account today!