November 11, 2015
By: Stanislav Yurin

Tallinn affair

Opening the bank account for Estonian company, e-Residency round table and visiting Estonian Tax Office

A rather lengthy part which consists of the several smaller topics. I have decided to present them at once, rather than splitting on several notes, since all the things described here are the reflection of the experience of my single visit to Estonia at the beginning of November 2015.

17 November 2015 Update on LHV Bank

As most of you may know, opening bank account in Estonia remotely, even if you are holding iD or e-resident card is currently not possible, and even if slightly more curious explorer may have come across such offers from third-parties on the web, their price tag will be comparable with traveling personally. Having Estonia in the reach of the direct international bus lane, the decision of visiting Tallinn to continue my e-Residency affair was a no-brainer to me.

Note that, while Estonian government is looking forward to introduce remote bank account creation possibility somewhere near the end of 2016 (as far as e-Residency community rumours suggest), it will probably work this option out on country by country basis, starting from the most safe financial locations, and not opening unconditional remote banking gate to the whole world at once.

So why wait a year if you are already onto it? Also, as the headline of the post suggests, this is a chance to pay a personal visit to other notable places, on more of this read below.

Banks

Preparing for the visit, I have selected two banks for opening an account of my newly created OÜ: LHV Bank, self declaring itself as an innovation forefront and spotted in the number of IT-related news, being the main target, and Swedbank as a secondary "just in case" option. Ironically it turned out quite the opposite.

LHV Bank

After filing their preliminary online form, claiming to speed up upcoming branch visit, and subsequently receiving two follow up invitation emails while I was arranging my travel visa, I was almost sure this rendezvous will work like a charm. Instead, in their main office, decorated with trendy flat design banners, carefully selected receptionist and a library stuffed with large collection of business books (the type of literature generally used for bragging, not reading or writing purposes), I have found myself completing these and some additional forms again just to be told that they will make decision in several days, "or maybe sooner, considering the fact I am limited in my visit time". As for the time of writing this, 1.5 weeks later, still no response.

Swedbank

For them, I have arranged an appointment in the central Tallinn branch on Liivalaia street 8, a week before my planned visit. And 20 minutes after I have entered Swedbank office front door, I had a working private limited company account package in my hands.

Still with a downside: issuing the plastic card would take more than a week (I have booked Monday-to-Monday Estonia visit), so I'll have to either come again or authorize someone to pick up the card for me. Unfortunately neither Swedbank nor LHV were willing to send the card by mail anywhere, being it my Tallinn business address (provided by 1Office.ee) or my home address in Ukraine. Good news is that 1Office people have no problems with sending a representative to the bank and mailing the card after that, so the problem solved.


In fact, through their internet banking interface, one can remotely issue such authorization for any trusted person, if, by any chance, you have someone of this kind available in Tallinn (no matter whether he/she has Estonian ID or not).

Several hours later the first symbolic coin from Google Play Store was enlivening that boring initially zeroed state of a new account.

While I am the person who is feeling severe moral pain when entering any bank (I have personally experienced systemic failure of three banks in the past, and there is no evidence that any single bank can do much better), still quite amazed how the dinosaur have managed to be so agile.

Estonian Tax Office

By the pure chance (my trip to Estonia was meant to happen a week earlier at first), I was invited and able to attend First e-Residency services roundtable. At last being able to communicate in person with those people who are in charge of e-Residency project as well as with many other ones interested. Cheers to all of you who are reading this.

Finally being able to discuss some questions live (mostly tax and legal, since I am myself rather satisfied with the technical side), I have received very simple ond obvious for some, yet the most powerful advice from Ukrainian girl who studies in Estonia, Anastasia Okhrimenko: "For a good tax advice, visit the Tax Office. It is their job and they are doing it really well in Estonia".

A side note: coming myself from Ukraine, where it is not unusual to approach any tax and business regulation authorities with a pre-filled complaint and lawsuit templates in the folder, just in case you'll be threatening a bureaucrat or two with legal action before lunch (so they'd better be sure you are serious), I'd rather be prepared better than authorities instead of taking advice from them. Turned out, not this time.

The next morning after the roundtable I gave a Skype call to the Estonian Tax and Customs Board, where I was reassured that they are indeed helping even by phone, still I should certainly not miss a chance to visit them in person on Lõõtsa 8a, while I still have it.

NB: before doing any tax reporting, a contract between Tax Office and legal person should be arranged. This can be easily done in the E-Tax Board section of http://www.emta.ee site. Note that the contract for the natural person representing the company should be arranged before you'll be able to sign a contract for your legal entity.

Dictum factum, an hour later, in the new bright Tax Service Bureau office, I was receiving "Taxes 101" course from three nice ladies, whose names I wish I had written down to thank right here. Anyway, if anyone involved in the Office (and the making of) is reading this: you are doing your job right. Not only I have received the nice intro on Estonian taxes (yes, I have read the legislation, still nothing can beat hearing those things again from the Tax Office representative in person), but also an advice on how not to unnecessarily overpay them given my (as a natural person) non-resident status in Estonia, quick tutorial on using of e-TaxBoard (e-maksuamet) web GUI, an overview of available tax forms and more in-depth explanation of VAT reporting.

Upon leaving the building, I was moved almost to tears. While, of course, the modus operandi of any entrepreneur should be to never write off the chance of the worst, no matter how small it may be, and I am sure Estonia has its own horror stories, this was really, really good start of a relationship.

The only side note is that, given one does not know Estonian language, knowing Russian is currently an advantage over knowing English while communicating with Tax Office, and I have switched there to the former. Still I believe either should work on practice. As for the electronic tax forms themselves, they are equally functional and translated on all of three languages (with casual localization omissions which can and should be reported to e-residence team).

Also be aware that, while Tax Office staff will eagerly help you by phone, they are currently not able to identify you this way to dig your account numbers with you. The issue is worth noting and looks like they are also working on this (as their site suggests).


Adding an extra topping, I have not only discovered Tallinn for myself as a good place to spend a couple of days, but also as a hyperactive hub for Baltic Sea ferries, which can deliver you to Finland and Sweden for a bargain price with a top-notch service withal - the reason I have vanished from roundtable follow-up emails for a couple of days. Also a funny observation: Estonian ships are sailing under the Estonian flag, which may be the signal of really good tax climate; the topic which is certainly worth to be covered in my following posts. Stay tuned.


17 November 2015 Update

LHV demeanor is seriously distracting. After two weeks of silence I have placed a call myself, just to learn they have forgotten to call me back and "now forwarding my case". A day later I am receiving a call back which is inviting me to sign the documents in person again, claiming that digital signing via email by e-Resident card is not possible, contrary to what they were claiming during my visit at their office. (And the third invitation to Tallinn should have followed to pick up my card I guess?). Naturally I have informed them that "LHV case is now forwarded just in case I'll visit Estonia for some other purpose". 30 minutes later I am having an account renouncement in my mailbox from them in turn. Well done, at least I was right about having a backup option (more industrious person would probably like to have even a third one).

Tags: taxes legal banking general