Estonian banks and bank accounts
It became easier to open bank account in Estonia, but it is still overly complicated.
Some of us still remember those times, when an account in an Estonian bank could be opened in one day. Those times are long gone.
Now, you have more chances to marry a Swedish princess, than to open bank account in Estonian bank.
Estonian banks
There are total of 6 Estonian banks which open bank accounts as such:
They are pretty much all the same and mostly differ in speed of communication. Citadele is the slowest one to respond and make decisions. While SEB demands personal visit of company management to the bank branch.
In any scenario, when you apply for bank account in Estonia, you should apply to all banks and then hope for the best.
Estonian Resident Permit
Disregarding to which bank you are applying they will all ask for on little thing – Estonian residency of all key persons.
By Estonian residency we undestand: person holding residence permit in Estonia (elamisluba), Estonian citizen or EU citizen which registered permanent living place in Estonia and obtained Estonian ID card.
By key persons we understand: board members, shareholders and beneficiaries.
If at least one of key persons is not Estonian resident, you can kiss goodbye to your Estonian bank account dream.
From other perspective, if you do want Estonian bank account, and you are the only person in the company: sole board member, sole shareholder and sole beneficiary – so called “one-person-company” – the first thing you do is obtaining resident permit in Estonia.
The second thing you do (after obtaining the resident permit) – obtaining Estonian tax residency.
And the third thing you do – register your living address in Estonia. Even if you have never been to Estonia and you are currently practicing muai-thai in Phuket, Thailand. You would need to rent an appartment in Estonia (or even purchase one).
After you made this humble home work you can apply for bank account and be assured that your application will be considered by Estonian bank.
It does not guarantee opening bank account, of course.
Connection with Estonia
The main and basically only reason to deny opening bank account is absence of so called “connection with Estonia”.
Banks do not specify much, what they understand under “connection with Estonia”. From our own experience and communication with bank representatives, by connection with Estonia banks mostly consider the following:
- All key persons in a company are Estonian residents with registered living address in Estonia (see above).
- Assets located in Estonia (real estate, equipment, inventories ect).
- Licenses issued by Estonian authorities.
- Successfull participation in Estonian state prokurements.
- Transactions with clients, which are Estonian residents (companies or private persons).
- Goods moving and stored onto Estonian custom territory.
In other words an applicant company needs to prove that it is established and managed exclusively by Estonian residents and that it performs actual business activity in Estonia with Estonian residents.
This is pretty interesting approach, given that most of major Estonian local businesses are only able to conduct their activity if they expand internationally. Since Estonian market is pretty small and will only be shrinking.
Process
Applying for bank account in Estonian bank is pretty simple process. Representative of a company files application on the website of a bank or pays a visit to a local branch. In case of SEB it can be only done by personal visit of board member of a company.
After submitting initial application, bank would normally take 2-8 weeks to process it and return to you with decision or with request for additional documents and information.
It is worth mentioning that before applying for bank account in Estonia, a company is expected to have prior accounts with other banks or fintech companies (Wise, Paysera, Revolut etc), so that during application company could present account statements showing past transactions.
In request for additional information bank will normally address some specific transactions from account statements and ask to clarify the nature of those transactions and provide documents (contracts, invoices, specifications, orders, certificates, custom declarations etc) used to perform such transactions.
Bank can send several requests to clarify different transactions and it normally takes weeks between such requests. So a normal processing time, from the moment of submitting initial application till final decision can easily take several months. The undeniable winner here is Citadele, who processed one application for about 10 months (and still denied to open bank account).
Payoneer
Taking all written above to thorough consideration, applying for bank account in Estonia may literally take years and cost thousands of euros. Particularly if you are non-resident and you start your bank account saga from applying for residence permit in Estonia.
Reasonable alternative to any Estonian bank will be opening a receiving bank account with Payoneer.
Payoneer offers bank accounts in top internetional banks: City, Barklays, Circle etc, depending on the currency of account.
Besides that Payoneer has highly professional support team, which manages to process all requests in reasonable time, making Payoneer a reliable and solid partner for handling international money transfers.
It is not an advertisement it is our practical experience based on long term cooperation with Payoneer.
Just contact us here if you want our support with opening bank accounts.