When invoicing your customers, paying your providers, distributing salaries, and lots more you need to open a bank account for your Estonian company. In this blog, we will explore which solution could suit your business best: opening a traditional bank account or an EMI account (fintech digital solution)? Eresidents has already helped many clients with the process of setting up a business. We are confident in our experience and are ready to help you – let’s start!

Traditional bank account in Estonia

If you want to open a traditional bank account for your Estonian company, there are two possible ways for you to do it. The first one is to open a bank account in Estonia.

Estonian banks – there are three main banks to choose from including LHV, Swedbank, and SEB. The main detriment of doing so is that you need to travel to Estonia. This is due to the strict compliance measures put in place for conducting their due diligence in order to abide by their KYC (Know Your Customer) policy.

Therefore, opening a bank account with an Estonian bank requires that the client meets with the bank representative personally. Keep in mind that you need to book an appointment in advance with which you will describe your situation. Estonian banks, thanks to the e-Residency program, are used to work with foreigners.

If you want to open a traditional bank account for your business in Estonia, but you don’t want to open it with an Estonian bank, from 2019 this is possible! Indeed, you can be able to use any bank account from the European Economic Area (EEA). You can do your financial operations with your Italian, French, or Spanish bank account. Remember that the main disadvantage of this solution is that there are specific documents you will have to gain, notarized, with an apostille, and maybe also translate. But this is neither a problem since Eresidents already offers these services.

Overall, the main advantage of opening an Estonian or, in general, European traditional bank account for a business, is that it gives you more security than a fintech solution, both in a psychological and effective way. Indeed, all traditional banks comply with the European deposit guarantee fund, which provides you up to one hundred thousand euros if the bank goes bankrupt.

Digital (fintech) solutions

But the question is: do you really need a traditional bank account for running a business in Estonia?
And the answer is: No!

Indeed, you can manage your business finances completely online, through one of the several fintech alternatives (Revolut Business, Wise, N26, …). You could just download an app and (in some cases) wait for a debit card to be delivered to your place. But keep in mind that if there are a lot of advantages to choosing a digital solution, such as the comfort, on the other hand, there are also some disadvantages. With a fintech bank account, you will not able to apply for loans or earn interest for the money your company earns. Plus, not all digital banks are protected by the European guarantee fund, so pay attention and make the right choice!

Conclusion

From our experience, we can advise you that a digital (fintech) solution is perfectly fine. That’s true unless you have a good reason for preferring a traditional bank account. Keep in mind that if you start operating with a digital solution, you can always switch to a traditional one. However, Eresidents is always ready to help you, whatever is your decision.