The biggest issue for entrepreneurs registering a company in Estonia is opening a bank account. Or rather, it used to be that way. Nowadays, there are several alternative options for Estonian businesses, which we will discuss below.
Why is it difficult to open a bank account in Estonia?
Any corporate account, whether in Ukraine, Poland, or Estonia, is subject to detailed supervision by the tax authorities. However, in Estonia, as in the UK, the procedure for opening a bank account by a non-resident of the country begins with ‘interesting’ formalities, which may make the viability of such an account questionable.
Before opening an account in an Estonian bank, a non-resident should familiarise themselves with possible problems and requests and carefully prepare for them in advance:
- Documentation requirements. In some situations, in addition to the mandatory documents, the bank may request additional certificates: contracts with counterparties or memoranda of cooperation, your company’s website, utility bill, business plan, etc.
- Personal presence. Estonia practices the offline format, although this country is among the top digitalized countries in the world.
- Additional verification of sources of income. Almost all European banks are regulated by international anti-money laundering, anti-fraud, and anti-terrorism laws and regularly initiate double checks of company income.
- They have limited financial services. If you pass the check and get the green light to open a bank account, remember that European financial institutions provide non-residents with a limited range of services and transaction limits.
- Minimum turnover requirements. For a financial institution in Estonia, your company’s annual turnover may be important as proof of its stability. Therefore, some banks refuse to open a corporate account for companies that do not meet the minimum turnover requirements.
- Tax liabilities. An important criterion when choosing a bank to open an account with is the tax system of the country in which it operates. Most European countries have signed agreements with each other to avoid double taxation of business representatives. However, domestic tax rates are high.
- Time. Which always turns into money. If you choose the format for opening a bank account for business in Estonia, expect the opening process to take several months. And no one can give you a 100% guarantee that the account will be approved.
Opening a bank account in Estonia can be a challenge for non-residents, mainly due to strict banking regulations and documentation requirements. In this context, payment systems are an ideal alternative for non-resident entrepreneurs.
Bank account in another EU country
Another alternative is to open a bank account in another country, but all the issues mentioned above may arise in another jurisdiction. From our experience, Poland is one of the more or less affordable options for opening a bank account. The likelihood of a bank’s approval to open an account varies depending on the case and involves a long compliance process, even in several stages. You need to be ready to show your business as much as possible, and it is better to have it already active. Therefore, always remember the possibility that the bank will refuse to open an account without any explanation.
Another option for Estonian businesses is an account with a Swiss CIM bank. It also has certain requirements for company verification, minimum account balances, and substance confirmation.
Payoneer for Estonian companies
Why Payoneer? Because it is a time-tested, clean, and legal partner with whom our team has been cooperating for over five years.
90% of our clients who have registered a business in Estonia have accounts with this payment system.
Moreover, Payoneer is registered with FinCEN (Financial Crimes Enforcement Network, a bureau of the US Department of the Treasury). Therefore, it is required to comply with the Bank Secrecy Act (BSA) and other relevant anti-money laundering (AML) laws and regulations applicable to MSBs in the US. Payoneer files SARs regularly as part of its regulatory responsibilities and is subject to regular audits.
Payoneer is an online alternative to a traditional bank. With Payoneer, companies can easily access banking services, including receiving and sending international payments, managing currency risks, and making currency conversions at low fees. Non-residents do not need to travel to Estonia to open a Payoneer account. You can open an account online and get immediate access to business services.
Payoneer with Stripe for e-commerce
If your business is related to e-commerce, you will need
- a gateway through which payments will be processed;
- a financial institution that will accept funds to the account.
In this context, a payment system like Payoneer, as an alternative to a bank, is a perfect match for a service like Stripe Payment System and provides good opportunities for e-commerce.
You can find more information about Stripe in this article and our YouTube video.
Discover the advantages of using Payoneer for business registration in Estonia and explore the myriad possibilities it opens up for your business. Our working hours are 9:00-19:00 from Monday to Friday. Send a request through the form below or a message on Telegram bot/Viber, Whatsapp chat for consultations.
