Opening a Business Bank Account in Estonia

Prabhat Nigam

30 Sep, 2022

The process of opening a business bank account in Estonia has become complicated and expensive due to a number of regulations. Fortunately, it is not mandatory to only have a business bank account at an Estonian bank. Moreover, the Estonian regulatory authorities accept all the European Economic Area (EEA)^[1] bank accounts and Payment Service Provider (PSP) bank accounts. This has relieved many e-residents from obtaining a business bank account and allowed them to manage their Estonian companies. This article discusses the conditions, documents required and the procedure for opening a business bank account in Estonia. 

How can a non-resident open a business bank account in Estonia?   

Many non-residents wish to get a business account opened in an Estonian bank. However, the procedure has become complicated due to strengthened client acceptance rules. The Estonian Know Your Customer (KYC) requirements require at least one face-to-face meeting with the non-resident client and the local Estonian bank. Additionally, the success of opening a business bank account depends on the data and information furnished by the applicant, as the bank has to check and verify the origins of the assets and the background of transactions of their non-resident customers.

For a non-resident to open a business account in Estonia, the client has to demonstrate that his company has direct ties with Estonia and explain further how the company’s management/ owners/ commercial activities are connected with Estonia. The bank wants to know a substantial reason for the company undertaking operations in Estonia and the need to have a bank account opened in Estonia.

Suppose the applicant successfully demonstrates that his company should have an Estonian bank account. In that case, the applicant can open a bank account at any local bank offering a business account. Some banks provide the facility for online submission of the application form and the relevant documents. In such cases, the applicant has to visit the bank only once to sign the agreement and within one month from the application’s approval date. 

The EEA banks also provide an alternative to traditional banks where the applicant can create a business account. Additionally, the services offered by PSP accounts can be availed to create a business account.

Business bank account in Estonia for e-residents 

Suppose the applicant has taken part in the e-residency programme and consequently has ties with Estonia or has become an Estonian resident. The chances of obtaining an Estonian business bank account number and International Bank Account Number (IBAN) are relatively high compared to that of a non-resident. An e-residency allows the making of applications online without any bureaucracy to obtain a business account from an Estonian bank. 

Documents required for opening a business bank account in Estonia

The banks will seek the following documents at the time of opening a business account for a company registration in Estonia:

1. Any official exhibit showing connection with Estonia such as residence permit, real estate ownership documents, employment contracts, actual office address in Estonia or having Estonian business partners.
2. Documents related to the applicant’s business or business partners in Estonia. These documents may include business activity and its operations, a well-drafted business plan providing information about business activity and partners etc.
3. Applicant’s e-Residency ID. 
4. Identification documents from the applicant’s country of origin or residence, along with a CV of each board member of the company.
5. Where the applicant is venturing into a business that requires necessary capital, the applicant has to furnish a document or statement proving the existence of those funds to be invested.

Procedure for Opening a Business Bank Account in Estonia

The following steps must be followed to open a business account at the desired Estonian bank:

1. Gathering the required documents: It is advised that the applicant should gather all the necessary documents required to open a business account with the Estonian bank. It is recommended that the applicant’s business should have some previous business activity with a proven record of income generation and trade. As businesses without any track record of operational activity or their partners, it is highly probable that the bank may refuse to open the business account.
2. Submission of the form in person: It is recommended that the person fill and submit the form in person at a suitable bank offering the best available services according to the needs of the applicant’s business. Certain banks provide the facility to file applications online.
3. Wait for the bank’s feedback and additional documents required: After submitting the form, wait for the bank’s input or some additional documents for additional details. If the bank rejects the applicant, the applicant is free to make a new application to another bank.
4. Visit the bank to sign the agreement: In case the bank approves the application, the applicant can visit the bank in person to sign the agreement. Some banks also offer an option where the applicant can authorise another person to complete this step.
5. Registration with the Estonian Tax and Customs Board: once the applicant gains access to the business bank account, the final step is to get the same registered with the Estonian Tax and Customs Board.

Conclusion 

There is a misconception that possessing an e-residency in Estonia entitles the residency holder to the right to open a business bank account in Estonia. It is not just the possession of an e-residency but also a demonstration of the company’s connection with Estonia required to open a business account. A business bank account is not provided to companies that have exclusively been carrying their business in their own country or outside the Europian Union. To know more about the ingenious ways of opening a business bank account in Estonia as a foreigner, get the consultation offered by global incorporation experts at Enterslice.

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