Estonia: Company formation possible without Estonian bank account

A change in the law of 1.01.2019 enables foreigners to establish a private limited company in Estonia without an Estonian bank account.

Starting a business in Estonia is generally quick and easy. Since 2014, foreigners have been able to start and run businesses online in Estonia thanks to e-residency ‒ a digital international “ID-Card”. An obstacle was opening a bank account in Estonia. Especially in recent years, the banks had tightened their opening requirements for accounts and this often made opening an account almost impossible for foreigners.

The aim of the amendment is to remove this obstacle. From 1 January 2019, setting up a private limited company in Estonia is possible using a payment account which has been opened on behalf of the incorporated company by a credit institution or bank established in the European Economic Area (EEA).

Undoubtedly this measure will make it easier for one or another foreign investor to set up a business in Estonia. On the other hand, the inevitable question is whether a foreign bank is willing to open an account for a newly-established Estonian private limited company.
If the foreign company founder is well known to its bank in a positive sense, this can open up new perspectives. In any case, the question must be clarified if possible beforehand with the bank concerned.

Additionally, under certain conditions an Estonian private limited company can be established without contributing share capital. In practice, this gives the founder time to find a willing bank.

Conclusion: it remains to be seen whether the change in the law actually works and makes starting a business for foreigners in Estonia easier.

Establishing a public limited company, still requires a securities account at an Estonian bank.

Source: Estonian Commercial Code

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