Once you have registered your business in Estonia, the next step is opening a bank account to be able to invoice your customers, pay your suppliers and distribute benefits.

In this article, we talk about the different banking solutions available, and how you can open a bank account for your company in Estonia. If you are our customer, we will guide you through the whole process.

First things first. Do I need to open a bank account in Estonia?

Your company needs a bank account, but this bank does not need to be an Estonian bank. It does not need to be a traditional bank at all.

There are many banking solutions you can use to transfer money, invoice, distribute benefits and operate seamlessly without the need for a traditional bank account. One of them is Wise. The main advantage of these fintech solutions is that you don’t need to visit Estonia to open the bank account. It can be done completely online.

So, why open an account in a traditional bank instead? We are going to see some advantages and disadvantages to both approaches:

Bank account

There’s the perception that a traditional bank offers more security and trust that a fintech solution. Also, all traditional banks adhere to the European deposit guarantee fund, covering you up to 100.000€ if the bank goes bankrupt. That may be important for some entrepreneurs or companies.

There are three main banks to choose from in Estonia: LHV, Swedbank and SEB. Since 2019, it’s perfectly fine if you want to use a traditional bank from the EEA (European Economic Area). So you may open an account for your company with a French, Italian or German bank. In that case, there are certain documents that you will need to obtain, notarized, with an apostille, and probably translated by a sworn translator.

The main disadvantage of using an Estonian traditional bank is that you will need to travel to Tallinn, the capital of Estonia. That’s because traditional banks have a KYC policy (Know Your Customer) that requires them to meet their customers face to face in order to open a bank account for them.

One important point to consider is that most traditional Estonian banks will require that you or your company proves certain bond or attachment to Estonia beyond being an e-Resident. This is quite subjective, and proving that may not be straightforward.

However, all things considered, Estonian banks are more open to work with non-residents and understand the e-Residency program and the fact that many of their customers are digital nomads.

We, however, recommend you to open a bank account in one of the many digital solutions available.


Digital solutions

On the other hand, there are fintech alternatives such as Revolut Business, LeoPay or Wise. In this post we talk about these digital solutions in more detail.

As a summary, the main concept behind those digital banking solutions is that they offer a bank account (sometimes one per currency, such as in the case of Revolut Business, where you may have an IBAN for your euro account, a US account number for a dollar account, etc.) that you can manage online. All of them also offer you a business debit card.

As a result, you can use these banking solutions to operate with your business as you would do with a traditional bank account: receive payments from your customers, pay your service providers, and even use your card to pay business expenses.

It’s basically like having your own real bank account (or even one bank account for each currency), with some important differences :

  • You can not apply for loans
  • You will not earn interest for the money your company has
  • Some of them have a banking license and are protected by the European guarantee fund, but others may not have it. In general, however, your money is protected, in one way or another, in the most important online banking solutions, such as Wise or Revolut Business.

On a personal level, there are also alternatives that allow you to operate with your personal finances without having a bank account, such as Revolut, N26, or Monzo. We’ll talk about them in another article.

The verdict?

Unless you have a good reason to opt for a traditional bank account, fintech solutions such as Wise or Revolut Business are perfectly valid alternatives for your business.

You can even open a bank account initially with a digital solution, such as Wise, try it, and switch later to a traditional bank account if you need it for some reason. However, that shouldn’t be the case in most scenarios. You can receive money from your clients, invoice them, pay your customers, distribute salaries and dividends… everything most businesses need.

However, if a digital banking solution is not enough for you for a very specific reason, and a trip to Estonia is not a big problem for you, our recommendation is opening a bank account with LHV or SEB. Remember to contact the banks beforehand, describing your situation and making an appointment to visit their offices.

Next, let me tell you the story of how Ignacio opened the LHV bank account for his business in Estonia.

Opening a bank account in Estonia

Opening a bank account in Estonia: the story of Ignacio.

As I was living in Riga, Latvia, at the time, which is just a four hours trip to Tallin by bus, we decided to take the chance to visit the beautiful Estonian city and open our bank account at LHV. Our plan was to take the first-morning bus, open the bank account and get back home the same day. In my case, my company was not even registered yet, but the LHV representative told us that it was ok visiting them beforehand to comply with the KYC protocol.

Once we arrived at the Tallinn bus station (picture above), we had to go to the LHV office. Luckily, there is not only Uber in the city but also Taxify, a local equivalent operating in the Baltics. We opted for Taxify because their fees are super cheap, and the service is quite good. Highly recommended.

We had agreed on an appointment with the staff of LHV. They were waiting for us, and the whole process was quick and smooth. All we had to do was answer some questions about our business, where we came from, and why we had chosen Estonia and LHV.

The result? Our visit to open the bank account and comply with the KYC regulations was solved even before I had my company registered. Personally, I found more problems to open a bank account for the company I had back when I lived in my home country.

In addition, we took the chance not only to visit and get to know Estonia and Tallinn, but also to meet potential partners, find new customers, and open new business lines. Overall, it was a visit well worth the bus trip, and an example of how you can make the most of your visit to Estonia.

So now that?

When you have your bank account, you are ready to start invoicing your customers for your products or services. You can also pay your providers. As soon as you start earning money, you are ready to distribute salaries. If you are our customer, with your IBAN number, we can then apply for the VAT number for your company, and register you as an employee.

In the case of LHV, they don’t give you a debit card right away, but you can ask for one. That can be done completely online later, and LHV charges you a small monthly fee of 2€, which is really not that much. 

You already have everything you need to run your business. And best of all, you do not have to worry about paperwork, taxes or red tape. Let us do the hard work and focus on making your business grow.