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.
Why Estonia?
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.
Updates
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.
Other Banks
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.
I’ve heard several having trouble with the whole needing to have a strong connection to Estonia. Any tips you want to share in how you were able to slide by at SEB Estonia & Swedbank? Is being tied to an Estonian broker (currencies or stocks) a way to do it? Or real estate?
It’s not as easy as it was when I first wrote this post. Versobank, LHV, and BigBank are still quite receptive but the Scandinavian banks are much more selective. Having a brokerage account in Estonia is probably not going to be sufficient for the likes of SEB and Sweden if it’s your only tie to Estonia.
Hi Streber. First off all. I have so much love and respect for you (or is it more than one behind this blog?) who write this blog and reply so much comments on a daily basis. Sharing your knowledge like this.. not charging anything.. not even profiting via ads/affiliates….. Much love. Great person.
With the above said, I don’t expect you to answer the following… Since it’s maybe nothing you support and I respect that. BUT! I would like to hear your experiences at least :)) Since you obviously have some deeeep knowledge & experience in how all this works.
Haha anyway. Here is my questions:
1) I have a fake passport. It’s really solid with lots of details, UV-stamps etc. Looks like the real one really (a EU passport from Lithuania). On top of this, just to convince the bank clerk, I’ve ordered some custom stamps, special made stickers etc from China to fake a notary public document to prove my passport is “real”. Short: I am kind of a genius when it comes to faking stuff Photoshop. It sounds silly but I know these proofs looks veery good.
I’ve also got a faked document to prove my address (with a government-ish stamp aswell). Looks legit too.
*****
I was planning to open a bank account in Poland (saw someone opened a bank account there in 5 minutes with just their passport – sweet) until I saw it’s an instant 5 years jail for using fake documents so I will probably chose Estonia or some other EU-country hehe.
But. How pecky are they when they inspect the passport? Do they make any calls? Or just scan it in and you are good to go? I mean. Afterall.. Its just a bank (who want to profit). Do they even have the right connections to control passports like this instantly?
I guess its a lot about psychology aswell. If they think I look “legit”, clean clothing, the documents seem legit etc. Do you think they will go any further anyway just to be sure its not a fake one?
Is the machines to read RFID chips (like the ones on airports) common in banks?
TL;DR:
What type of verifications are made in order to verify its a 100% real passport? EU passport, opening an account in a EU-country.
Any experiences with bank clerks who are pecky/nosy?
2) Do you have any idea of any banks that allows non-residents to open a bank account + debit card remotely? With the above documents. Will probably be able to get an address in that specific country aswell if needed (rent an address)
.
3) lpoffshore.com/en/services-view/offshore-bank-account/ is option 1 really legit? Seems to be good to be true. Maybe that would be an option for me… But if they can do it I guess I can do it myself or how does this work really? Google didnt showed me any swiz banks that will allow me open a personal account remotely.
So many questions and a really messy text. Hope you understood and hopefully you can help me out a bit. Hope you dont get offended by these questions. I respect your work anyway.
Thanks in advance!
Cheers,
<3
ps. I am sure I want an EU-country. This is some money I can't tax for that will be used for daily life spendings (rent, food etc).
Ah – fake passports. I spent time early in my career doing menial compliance work, which involved looking at KYC documents from clients. After a while, it becomes very easy to spot fake ones especially ones made by self-proclaimed Photoshop experts since they tend to get cocky and sloppy. Not saying that you would; just that most of your peers do. Unless you work with passports and document review for a living, you will always run a risk of being outsmarted by someone who spends their 9-5 looking for falsified documents.
Do you speak fluent Lithuanian without an accent? If not, that might end up being a problem.
Using fake documents is considered fraud in all jurisdictions and will land you in jail if caught. If you are doing it for financial gain (which is the case here), it also becomes money laundering.
Now, to answer your questions:
Most banks will have the ability to with high accuracy verify passports. When they go away to scan your passport, they subject it to all sorts of tests to verify the legitimacy of the document. Your document is scanned using a special device (similar to what’s used at airports) and the data on the passport may also be sent for validation against passport authorities or central repositories. See for example Au10tix and LexisNexis. This can be done even for remote account opening but less accurately so.
To speed up the account opening procedure, the initial clerk just takes and scans your documents and issue you an account number and debit card while your documents are queued for later review. You won’t always know immediately if you passed the controls.
Some smaller banks may lack this control although it is becoming increasingly easy and cheap to perform these controls. You’re looking at a few thousand EUR to set everything up and one or two EUR per each passport you check, which is a lot cheaper than the repercussions for the bank if a police investigation were to occur.
I don’t open accounts with fake documents. However, there are banks with highly questionable KYC procedures in eastern Europe. Opening remotely might be difficult there, though. Croatia, Romania, Bulgaria, and Hungary have severe lapses in many cases.
Sounds like CIM Banque. It’s a pretty dreadful bank, from what I’m told. I recently wrote in a forum thread here that I no longer open accounts with CIM Banque for clients, but I help a lot of clients move away from that bank.
You could just open an account with them directly if you want. No need to fork over 605 EUR to LP Offshore.
It is not an anonymous debit card. It is a reloadable, prepaid card. Sure, it won’t have your name on it but it’s not exactly difficult to find out who’s behind it.
Hi!
You seem either to be extremely lucky or to know magic words. Just got a no from Swedbank, here is their quote:
The irony is that I applied for e-residency card just on the very same day, and usages of that card include banking. But mentioning “plans to open a local business” didn’t help me at all… If any, I used an ozzie passport.
Cheers,
Michael
Hi Streber,
can you advise on the pros and cons of Estonia’s virtual residency program?
http://www.newsweek.com/2014/11/07/estonia-attempts-boost-economy-introducing-virtual-residency-280571.html
Thanks!
It doesn’t really have any real-life impacts other than issuing ID cards to non-residents, which can make it easier to open a bank account online, file taxes, form a company, and other administrative tasks. However, banks can still treat you as a non-resident.
There have been indications that e-residents be given the right to vote or otherwise voice their concern about topics that relate to the Estonian business sector which would be a truly remarkable achievement.
Dear Streber, I love your way of sharing intelligence to people!
I am planning to incorporate a non-resident company in Gibraltar, to have its administrative office in Malta, and the offshore company bank account in Estonia or Singapore. I would prefer Estonia because is cheaper for me to travel there to visit the bank, I am European.
Could you confirm to me, that in my particularly case, if the income earned outside of Estonia by my company, will not be taxed at all if I will keep the company money and profits in an Estonian bank? This company of mine will not have any business in Estonia.
Or is better to open the offshore account in Singapore, instead of Estonia? My clients will be from Europe, my businesses will be made in Europe.
Thank you and best wishes!
Andy
Hi Andy,
Thanks for your comment and feedback!
Unfortunately, I can’t really answer your question. I mention frequently that I cannot give tax advisory questions and this would be one of those.
If you do not conduct business in Estonia or incorporate there, I don’t see a reason Estonian tax authorities would care about you. You’d just be another non-resident banking customer. The bank might deduct withholding tax on interest and other passive incomes, though, under the EU Savings Directive.
You should always speak to a tax adviser who takes your entire situation into consideration.
Depending on how your company is structured, managed, and operated, you may or may not be subject to Maltese corporate tax. If you pay yourself a director’s fee, salary, dividends, or similar you may become subject to Maltese personal income tax.
Malta’s tax code is equal parts attractive and convoluted. It’s highly recommended to not make assumptions and instead speak to a tax adviser. There are a myriad of them in Malta. Chetcuti Cauchi Advocates and CSB Advocates are some good ones.
Dear Streber, thank you for your feedback! I have some more curiosities 🙂
1) I would like to know if it is possible for a Seychelles private foundation to receive sponsorship (money) from foreign companies.
2) I have a slavic double surname and a hard to remember family name (I live in Eastern Europe). I want to relocate to Malta and there to change my full name, I will choose an international surname and family name, easy to write, easy to remember. Here in my country it’s not possible to change it, maybe you know how easy is to change the full name in another country. If it won’t be possible for me to change my name in Malta, I will buy a Dominica passport by investment, case in which I think it would be easier to change my full name.
3) What do you think about Bank of Cyprus? I don’t see it in your List of offshore banks. I know this bank has some financial problems, but it remains the biggest bank in Cyprus, it offers offshore corporate accounts, debit cards, credit cards.
4) How about Hellenic Bank? Do you agree that it to deserve the title of the Safest bank in Cyprus, by Global Finance Magazine 2014?
5) On wikipedia I see that Alpha Bank group and Piraeus Bank group have big profit for the year 2013. What is your opinion for Alpha Cyprus and Piraeus Cyprus? Are they good enough for offshore baking?
I’ve read all your blog, twice 🙂 You deserve all our appreciation.
Andy
Hi Andy,
Your questions touch on financial stability and legal matters which is something I cannot comment on. Properly doing so is a time-consuming and risky endeavour. So my answers might be a bit brief.
1. I can’t answer this since there are legal nuances to when it would or wouldn’t be permitted. Not so much because of the company’s country of incorporation as to other underlying factors that could be seen as diluting the integrity of the foundation.
2. Never had to do this but if I’m not mistaken, Malta only allows surname changes and only for marriage unless you have a court order permitting it.
3. Looking at Bank of Cyprus purely as a bank without considering financial troubles, it’s a pretty decent bank. Haven’t had a lot to do with them, though.
4. Hellenic Bank recently failed ECB’s stress test. Results were bad but not entirely as atrocious as feared. http://blogs.wsj.com/moneybeat/2014/10/26/a-country-by-country-breakdown-of-the-stress-test-fails/
5. Both are quite popular with offshore companies. If they are good enough is up to you to decide, though.
I was looking forward to your “Upcoming Post” and checked close to when you said you would post. Good idea!
Are you opening these accounts as a personal account, or as a corporate account? If personal, the person is a resident of the EEC (I really don’t want to know who, I am from the Americas) or elsewhere (does that effect the opening process?)?
Your posts are one of the only sites which are informative instead of ‘give-me-your-money-first” sites all over the net. Your spot on regarding intermediaries, regarding the fact they should be willing to share their banks with you. I”m currently checking into doing research in the EU, and your site has helped.
Glad to hear my blog is of value to you!
These Estonian bank accounts have been both personal and corporate accounts. When I have spoken to the banks, they don’t make much of a difference between EU/EEC residents and other for personal accounts but they are skeptical about non-EU corporate accounts. I’d suggest calling them to confirm in advance about your specific situation.