A few weeks ago, I was in the Estonian capital Tallinn for two days. I decided to use this opportunity to open an account in one of the country’s many easy-going banks.
After some research, I found that Swedbank had the most interesting services. Banking fees in Estonia are relatively low. As of writing, you can get a EUR currency current account with a debit and a credit card for less than 2 EUR per month. Other currencies are also supported.
On a windy afternoon, I walked into a Swedbank branch, where I was greeted by a woman who barely spoke English. Not a great first impression but I took a queue number and sat down.
After a few minutes, it was my turn. I walked over to a counter and sat down opposite a woman with a Russian name. She spoke perfect English.
The way it works at Swedbank for non-residents is that you first go to the bank, fill in application form, show them your passport, and then they call or e-mail you within five banking days with a decision. If they have approved your application, you need to return to the bank within 30 days to collect internet banking device and cards. From what I have been told, all the major banks have similar procedures. As luck would have it, I was returning to Estonia again in just two weeks.
The teller at the counter helped me fill in the form. It was very straight forward and basic information, such as name, address, contact details, purpose of account, and estimate turnover/usage. I asked specifically about the last two. The teller assured me that it was mostly indicative and exceeding the turnover is not a problem.
I left the bank less than half an hour after entering.
As of writing – I am currently awaiting their phone call. By the time this blog post goes online, I should have heard back.
In the meantime, let’s discuss why I decided to open an account in Estonia and what you should keep in mind when doing it.
While Estonia has strict enough banking secrecy that OECD in October 2011 complained about it and that Estonian banks don’t always know the UBO of corporate accounts, the purpose of the account is not to hide money.
Estonia is a good way to invest money into the Baltic and Russian region.
Furthermore, income earned outside of Estonia are not taxed.
Add to this that fees and minimum balances are low compared to many other jurisdictions (including neighbouring Latvia), and you have a pretty attractive banking jurisdiction.
Something to keep in mind is that even though the banks are lenient to non-resident client, they will ask for a reason for opening the account. Unless you are bringing significant capital, the banks will – I am told – require that you have a connection to the Baltic region.
Update #1 – I received an email from Swedbank asking for some further details. Fingers crossed!
Update #2 – The day after I replied to the aforementioned email, I got a reply to my email saying that an account has been opened for me. I am to return to the branch to complete the account creation within the next 30 days.
Update #3 – I have visited the bank and received bank token device and my debit card. Apparently the account is multi-currency, supporting virtually all conceivable currencies.
The Swedbank Estonia internet banking has a lot of features and is very easy to use.
Since originally writing this post, I have returned to Estonia and opened bank accounts wither other banks. SEB Estonia is especially worth mentioning. You only need to visit the bank once. They ask a few more questions than Swedbank but nothing too intrusive. SEB Estonia issues virtual cards, which you top up with a specific value and which are only valid for a few weeks. This is excellent for online shopping, particularly if you do not trust the merchant with your real card details.