It is a well-known fact that requirements arising from different regulations have made the process of opening an Estonian bank account for your business more complicated and expensive. Luckily, it is not a requirement to have your business’ bank account at an Estonian bank, as all EEA and PsP accounts are accepted by the Estonian governmental authorities. This has greatly simplified the situation of obtaining a business bank account for many e-residents and solving one of the greatest issues with managing an Estonian company.
Also, in case your business will not be operating in Estonia but somewhere else in the EU, it might be more reasonable for your business to open a bank account where the primary business takes place. This is because you will most likely need to pay local taxes in that country, thus it can make relations with the local tax authority easier.
Many of our clients by default wish to open an Estonian bank account, although it has its own benefits, the situation around opening one is complicated because of strengthened client acceptance rules as mentioned before.
According to the Estonian banking sector’s KYC (know your customer) procedures, at least one face-to-face meeting is required with a non-resident client and the local bank. In addition, the success of opening a bank account for the company will depend on the data and information provided by you, as the banks have to verify the origin of the assets and background of transactions of their non-resident customers. As a prerequisite, the applicant’s business must have direct ties to Estonia, and the applicant must explain in detail how the business activity/owner/management of the company is connected to Estonia. The bank needs to see a logical reason for the company to operate in Estonia and to have a bank account in Estonia.
Now, if you can provide enough evidence that your company should have an Estonian bank account, you can do it at any local bank that offers a business account. Many of those banks need you to go to the bank in person just to start the process. One exception here is LHV, where you can start the process online, submit them all the documents, and then you need to visit one branch in person to sign the agreement within one month if your application is approved - this saves you time and money!
Again, as an alternative to traditional banks, it is possible to use other EEA banks to create your business account. This included payment service providers, where you can create a business account. More about that below!
In case you take part in the Estonian e-Residency programme and have ties to Estonia, or are an Estonian resident, you are most likely eligible for an Estonian bank account and an Estonian International Bank Account Number, also known as the IBAN number. Having an Estonian bank account is a big plus as with the e-Residency card or with the local ID-card, all transactions can be done online and with zero bureaucracy.
Below you can find a typical list of documents that local banks can ask or may need from you when you are going to open a business account with them for your company in Estonia:
Once you have gathered all the documents that the banks may ask for, you should start considering the best local bank you would like to use. Some might be more suitable for you and your business than others. Here is a list of top banks in Estonia that provide business accounts for companies:
As mentioned before, it is also allowed for your Estonian bank to have a business bank account at a bank located in the European Economic Area, where the share capital can be paid in. This is also the best way to go if your business will be mainly operating in another country in the European Union where you might be a resident already, as this can make your life a lot easier – you might already have a relationship with a local bank.
It is most likely that in other EEA banks have very similar documents that you must present them during the within the application process, and probably the same goes for the entire process. Although, it is certain that they will need notarised and apostilled company documents that provide them with all the necessary information that Estonian banks would get from the Business Register.
We always suggest asking and finding out about the requirements that the specific bank has set to be eligible and what documents they need before starting any process. Doing this could save you time and money.
If your company will not be operating in Estonia nor has any connection to it, it might be also a good idea to think about obtaining a digital bank account for your business, as they are more flexible than the traditional brick and mortar banks. Digital bank accounts can be made at several providers, who also provide an IBAN number, debit cards, and similar, or even better, security measures as the traditional financial institutions do.
One of the biggest differences between digital and traditional bank accounts and their creation process is that with digital banks the creation process is 100% online, which translates into no need to travel or any personal visits.
Second, some “old school” banks might not have all the features that the digital banks offer. For example, you might have to go to the bank to perform some certain decisions or actions, while with digital banks, you can do everything online.
Many online banking platforms are built with specific client needs in mind – some of them are designed to be used by cryptocurrency companies, some of them work better for freelancers and digital nomads, and e-commerce stores, etc. This means that some digital banks might suit your business better than others and are optimised for those needs.
One of the biggest differences here is also that digital banks offer multi-currency accounts that enable you to hold, receive and to make transfers in different currencies and with lower service fees.
PsP’s enable better payment integrations that enable to perform a faster purchase/checkout on your website than traditional banks. For example, most Estonian banks only offer a link to their site to perform such an action.
Finally, online banks are not able nor allowed to lend out the money that you have on your account. That ensures that your funds belong to you and only you. In turn, this means that many Fintech banks do not offer loans to businesses or private individuals.
The documentation that different international payment service providers may need from your business during the application may differ from one provider to another, but these are the typical documents that they ask:
There are many digital solutions that enable you to open business bank accounts. Here are a few popular ones that e-residents and our clients tend to use:
In case you would like to get some extra information or help with setting up your business bank account – we are here for you!
Our experienced advisors can look at your unique situation, analyse it, and make suggestions based on the information that you provide. In case you have a good chance of opening a bank in Estonia, we can review the conformity of your documents to ensure that you have the best potential outcome. In addition, we can help to find you the best digital banking solution that suits your business’ needs.
Without a doubt, if you are an e-Resident and you do not have ties to Estonia, the best solution for you is to use a virtual bank or a payment service provider. If that is the case, we suggest new Estonian business owners to open an account at Payoneer, Stripe or Wise, as they are the most flexible and reasonable option.
The timeframe it takes for you to open a bank account for your Estonian business largely depends on what bank have you chosen to use, and at which bank will you to be even able to open a bank account.
If you have sufficient ties to Estonia (local employees, local partners, local office, etc.), then you may succeed in opening a local bank account. The timeframe here depends more on when you have time to visit the bank, as according to their know-your-customer rules, at least one visit to a bank is needed, sometimes even two.
Choosing to use a non-traditional bank might be, and in almost all cases is, much faster as everything can be done remotely. This includes solving any problems where you might need to present some additional documents – you can send them over the internet. The process should not take any longer than a week or two.
Absolutely not! You do not have to have an Estonian bank account for your Estonian company, as European economic area bank accounts are accepted by the Estonian authorities since 2019. In fact, if do not operate in Estonia and you really do not have the need to have a local bank, then it would even make more sense for your business to have a foreign bank account. PsP accounts are the most popular for this kind of setup, as they often are more flexible than traditional banks.