Starting a business is an exciting endeavour, but before you can officially launch, you’ll need to set up a business bank account. This crucial step not only keeps your personal and business finances separate but also lays the foundation for financial stability and growth. In this guide, we’ll walk you through the process of successfully applying for a business bank account.
Research and Choose the Right Bank
Not all banks are equal, especially when it comes to business accounts. Take the time to research different banks, their offerings, fees, and services tailored for businesses. Consider factors like location, online banking capabilities, and special features like business loans or credit lines. Estonian E-residency team has done an excellent job on their website by compiling a comprehensive table of all available banking and fintech solutions. We highly recommend taking a look.
Gather Essential Documentation
Banks have specific requirements for opening a business account. E-Residency does not confer the entitlement to establish a personal bank account in Estonia. Typically, banks require a substantial connection to Estonia and may be hesitant to facilitate an account for non-residents. It is imperative to showcase your affiliation with Estonia. Given that the E-Residency program primarily aims to facilitate business banking options, we strongly recommend reaching out to the bank directly prior to making any arrangements to travel to Estonia. Typically, you’ll need:
- The application must be submitted in person by a company board member with the authority to act as a representative. If you have any queries, feel free to reach out to the 1Office legal advisor for guidance.
- Proof of Business Entity: This could be your Articles of Incorporation, Partnership Agreement, or a Doing Business As (DBA) certificate, depending on your business structure. 1Office is available to assist you with the necessary documentation. Contact us for a free consultation to initiate your business.
- Personal Identification documents
- Business License or Permits: Depending on your industry, you may need specific licenses or permits to operate legally.
- Business Plan: Some banks may request a brief business plan outlining your goals, target market, and financial projections.
- Initial Deposit: Some banks require an initial deposit to open the account.
Prepare for a Background Check
Banks perform a background check (KYC) on the business and its owners. This could include a credit check, especially for sole proprietors or small businesses without an established credit history.
Review and Understand Fees
Carefully review the fee structure associated with the business account. This may include monthly maintenance fees, transaction fees, and charges for additional services. Choose a bank with transparent and reasonable fee policies.
Establish Good Banking Practices
Maintain accurate records, reconcile your accounts regularly, and monitor your cash flow. Maintaining transparent accounting is crucial when dealing with banks. Our team of professional accountants is here to assist you in ensuring accurate financial records. This will not only help with day-to-day operations but also come in handy when it’s time to apply for loans or credit.
If you are connected to a country on the FATF list of high risk and other monitored jurisdictions, you will most likely have difficulty accessing any kind of business banking service even with a company registered in Estonia.
By following these steps, you’ll be well on your way to successfully applying for a business bank account. Remember, choosing the right bank and establishing good financial practices will set the stage for a successful and thriving business. Good luck!