navigating e-⁠residency: choosing the right business bank account for your company

Read this guest article from wamo about the essentials of choosing a business account as an e-⁠resident

This guest post about choosing the right business account was written by wamo, an online provider of banking services in Europe and a trusted member of the e-⁠Residency Marketplace.

As an e-⁠resident of Estonia, you’ve taken your first step towards establishing a digital business within the EU. Now, it’s time to tackle one of the most crucial aspects of your entrepreneurial adventure: selecting the perfect business account.

This article explores the key considerations you need to have in mind to make the right choice, as well as giving you a step-by-step guide to setting up your business account. By the time you finish reading, you should feel ready to make an informed decision that aligns with your business goals. Ready? Let’s dive in!

The essentials of choosing a business account

We’ll cover all the details of the different kinds of business accounts open to Estonian e-⁠residents a little later. First, the answers to these crucial questions will direct your decision.

What’s your business model?

Your business type and operational requirements will play a significant role in determining the ideal account for you. Consider:

• Transaction volume and frequency 
• International payment needs
• Multi-currency support requirements
• The levels of integration you need

What are your plans for growth?

Think hard about where you want your business to go over the next few years. You need to choose an account that can scale to meet your ambitions and support your plans, no matter how grand. 

Most e-⁠residents begin with an account provided by a fintech or neobank, favoring flexibility and ease of account opening over the big lending capabilities of traditional institutions. We’ve broken down the pros and cons of this kind of account below, but the key here is to think ahead. 

If you’re starting small, an account with a non-traditional fintech might fit you perfectly for now. Then you can reevaluate your bank account options as your business scales and your needs change. 

What’s your budget? 

While cost shouldn’t be the only factor you consider, it’s still essential to match up your business account with your budget. You should be seeking a business account that offers value for money, without compromising on the features you think will be most useful to your company.

There’s no point in saving money with a lower monthly fee if the account holds your business back further down the line. That’s why business accounts like wamo are designed to offer flexibility and support as your business grows — without the hidden limitations.

What regulations do you need to comply with?

Will you be operating entirely within Estonia? Entirely within the EU? Entirely within the Eurozone? Going fully global? 

You need to vet your potential providers to make sure they comply with every regulation you need them to operate within. Remember - your business account should make doing business easier and safer, not more difficult and more unstable. 

Different types of business bank account

Now you’ve got a better idea of your own requirements, it’s time to explore the different options for your business bank account. There are three routes you can take, and each comes with its own set of advantages and disadvantages. 

#1. Estonian bank accounts

Opening a business account with a local Estonian bank offers several benefits for e-⁠residents, including:

• Estonian IBANs for each account, which enhances your credibility in the eyes of local clients and partners
• Straightforward access to business loans and credit
• Online account management using your Estonian e-⁠resident card, which integrates seamlessly with other Estonian e-services

But there are also drawbacks in using an Estonian bank for your business account, including:

• The requirement for a strong Estonian connection, which can be challenging for non-residents
• Mandatory in-person visits to complete the account opening, involving travel costs and time
• Stricter requirements for account maintenance and minimum balances when compared with other options
• Potentially higher fees when compared with fintech alternatives
• Limited international presence, which may be inconvenient for global operations

#2. Banks based in other EU/EEA countries

This option is ideal if you’ve already got a solid relationship with an EU/EEA bank, or reside in another EU country. Benefits include:

• Easy access to business loans and credit, based on your existing relationship with the institution
• Familiarity with the bank’s systems and processes 
• More flexible requirements for account opening and maintenance when compared with an Estonian bank
• Wider and more convenient network of physical branches for any in-person services you need

But there are cons to using this option too, including:

• No Estonian IBAN, which may complicate local transactions or partnerships
• In-person visits may be needed for account opening or transactions, which may be difficult to coordinate remotely
• Potential language barriers if the bank doesn’t offer services in your preferred language
• The bank may have less experience with e-⁠Residency specific needs and requirements

To explore this option, you should reach out to your chosen EU/EEA bank directly. 

#3. Payment institutions and fintechs

For early-stage entrepreneurs, and businesses that frequently engage in international transactions, using a fintech solution offers several advantages, including:

• Flexible access to different IBANS, combining local credibility with fintech convenience
• Entirely online account opening, saving you time and eliminating travel costs
• Wide choice of providers, allowing you to find the best fit for your specific needs
• More competitive fee tiers, especially when it comes to international transactions
• Modern, user-friendly mobile and web interfaces
• Access to additional features, including expense management tools and API integrations

But there are also some drawbacks to using a fintech solution for your business bank account. 

• Most fintech business bank accounts don’t include lending as standard, requiring separate arrangements for loans or credit lines
• Limitations on cash deposits or withdrawals 
• Lower deposit protection limits versus traditional institutions, making them less suitable for holding large amounts of funds

By carefully weighing up the pros and cons of each option, you can make a more informed decision about which type of business bank account provider best suits your company’s needs. 

Remember that as your business evolves, you may find it most beneficial to use a combination of these account types to leverage the specific strengths of each option. Read more about business banking and payment solutions for e-⁠residents:

Balancing cost-efficiency and business-boosting features

When you’re busy choosing a new business account provider, it’s tempting to opt for the cheapest option on the market. But this approach may end up costing you in the long run. Here’s how to strike the right balance between budget and bang for your buck. 

#1. Prioritize your essentials

Identify the must-have features your business needs to thrive. These could include things like:

• Easy access to SEPA transfers
• Multi-currency accounts
• Instant virtual card creation
• Real-time transaction notifications

The must-haves for a business account will be unique to every enterprise. Take the time to isolate what’s really important to you, make a list of those features, and find a business account based on those needs.

#2. Evaluate the value-adds

Look for providers that offer additional business-boosting benefits, such as:

• E-commerce integrations that could boost your conversions
• Expense management tools that will smooth your accounts
• Custom integration capabilities with software like Xero 

Many business accounts will offer these kinds of value-adding features, either as standard or on their higher tiers. Take them into consideration when you’re choosing the account that suits your business best. 

#3. Consider long-term cost

While a provider might look like the best deal because of their low monthly fees, be careful of hidden fees that will add up once you start using the account. These could be things like:

• High transaction fees
• Currency conversion charges
• Withdrawal limits and other associated fees 

A slightly more expensive monthly fee account, equipped with features that save you time and make your team more efficient, could provide better value for you in the long run.

Look for a provider that offers a flexible tiered pricing structure (like wamo!). That way, you can choose the perfect tier for your business, and then upgrade as your business grows. 

wamo: business accounts that go the extra mile

As an e-⁠resident entrepreneur, you need a business account that understands your unique needs. Which is exactly what wamo was built to do. 

• wamo Connect: browse wamo’s explorable marketplace, filled with unbeatable partner deals that solve all the most common digital business challenges.

• Seamless setup: apply for your account in 10 minutes, get approved fast. wamo’s fully digital onboarding process aligns perfectly with the fast-paced e-⁠Residency ethos.

• Multi-currency support: manage EUR and GBP in dedicated IBAN accounts with wamo. Smooth, international transactions pave the way to global business success.

• Human-led customer support: wamo prides itself on human-led customer support and genuine customer connection. There’s always a real person ready to quickly solve any issue you might encounter.

• Easy team management: wamo allows you to issue physical and virtual debit cards for unlimited team members, and easily link cards to sub-accounts right in the wamo app.

• Real-time controls: stay on top of your finances with wamo’s instant notifications. Keep your finances clear with tracked transactions and the power to freeze, block or delete cards if you need to.

• Security first: with wamo, your funds are protected in a safeguarded account. All card payments are secured with 3D Secure authentication for added protection.

Beyond basic business banking: the wamo advantage

wamo doesn’t just offer e-⁠Residency business accounts; it provides a growth platform for e-⁠resident entrepreneurs. By choosing wamo for your e-⁠Residency business account, you’re not just opening a bank account. You’re partnering with a financial service provider that’s truly invested in your success. 

wamo accounts are available to sole traders and SMEs across a huge range of industries and offerings. They cater to every type of business, including:

• Digital entrepreneurs and freelancers
• Small to medium-sized businesses
• E-commerce companies
• Tech startups 
• Location-independent professionals and consultants

These businesses all benefit from wamo’s digital-first approach, multi-currency support and business-boosting features designed to facilitate international transactions and easy remote team management. 

From streamlined operations to enhanced security and dedicated support, wamo offers you the tools and features you need to take your new Estonian company to new heights.

Eligibility - while wamo welcomes a wide range of businesses, it’s important to note that certain industries and business types aren’t eligible for a wamo account, including: charities, cooperative companies, private foundations and companies in certain industries like weapons manufacturing or gambling services. Read this help center article to check your eligibility.

As you set out on your e-⁠Residency journey, remember that the right business account can be a powerful ally in your quest for entrepreneurial success. And, with wamo, you’re choosing a partner that understands your needs, supports your growth, and shares your vision for a borderless digital future.