At the end of 2016, Estonian banks announced new restrictions for non-residents hoping to open a bank account. These changes are mainly to combat money laundering. We would like to explain the new procedure to you.

Although the changes have made some e-residents wary of establishing their company in Estonia, we can assure you there is no reason to be worried. None of our clients has been rejected by the banks. There are plenty of bank service providers to choose from, but you definitely have to think through what you actually need in order to succeed.

E-residency gives you the option to control many things online – sign documents, establish a company, declare Estonian taxes, etc. – all without ever having to leave your apartment. At the moment, there is still one occasion when you will probably have to show up in Estonia – when you want to open a bank account. E-residency does not guarantee a bank account because the decision to extend or deny banking services to a client is made at the sole discretion of the bank.

Before you buy your ticket to Estonia though, it makes sense to find out if your company really needs an Estonian bank account. You will need an account in an Estonian bank if your business has ties to the country – if your clients, partners, employees and/or suppliers are in Estonia. If the main part of your business is in another country, it makes more sense to use a local bank, or an online service provider such as PayPal.

If you do need an Estonian bank account, we recommend that you get some advice before planning your trip. It’s good to have all the documents ready for your application and we can recommend the best banking service provider for your needs. Some banks still allow you to open an account with notarised power of attorney, so in some cases you might be able to avoid travelling and save time.

Banks in Estonia generally expect you to be serious about your business. They expect you to have a solid business plan and a business connection to Estonia. Again, we strongly advise you to contact a business service provider. Every business and every case is different and by contacting us beforehand you can save time and money. We can help you to choose the right banking service provider to meet your company’s needs and provide any additional business services you might need when applying for an account, such as a legal address, a virtual office and a contact person.

For some banks, you can fill out the account application form and send us a copy of your passport first and only travel to Estonia if the bank makes a positive decision. For others, you must fill out all forms in the bank’s office. The bank will make its decision about your account application within about ten business days and will send you the result by e-mail.

The bank might ask you for the following information and documents, so it makes sense to have them ready when you apply:

• business plan
• reference letter from your home bank
• proof that the accounting books are in order
• CVs of directors and beneficial owners
• passports of directors and beneficial owners (copies)
• list of clients or description of potential clients.

You have a good chance of receiving a positive answer from the bank if your company:

• has clear business goals and action points
• is small to medium and provides services or products
• is doing business in the EU
• is doing cross-border business with services accessible to Estonians
• has owners from countries with Estonian embassies
• is directly owned by e-residents as private persons.

Some common reasons for being rejected by the bank are if your company:

• does not have a solid business plan
• has no real connection to Estonia
• acts as intermediary (agent) for selling the services of others
• is only doing business in your home country or outside the EU
• is a large company involved in manufacturing or wholesale.

Please contact us to find out which banking service provider your company needs and we will help you to apply for the business bank account that’s best for you.

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