Elpaso is a licensed payment system serving citizens of more than thirty EEA countries.

Account Opening

The service fee for account opening through Sowana is €300.

Corporate and personal accounts are available for opening.

The payment system only opens accounts for companies registered in the EU/EEA and Hong Kong (preferably without nominee structures).

Accounts can also be opened for IT and internet-related businesses. A company website is mandatory.

Elpaso does not serve politically exposed persons (PEPs) within the ownership structure, individuals on sanction lists, companies registered in offshore jurisdictions (except Cyprus), or companies with PO Box addresses.

Fees

Personal accounts are opened free of charge. The fee for opening a corporate account is €500.

The account opening fee includes assignment of a personal IBAN in euros.

The PS has no physical branches. Account management is done via online banking.

Transfer Fees

Account maintenance fees:

• Individuals – free of charge, if the account balance is up to €100,000;
• Companies – from €50 per month, depending on the average monthly account balance.

Incoming and outgoing payments within the Elpaso system are free of charge.

Note that the system only supports incoming payments in euros. Outgoing payments can be made in multiple currencies.

More detailed information about Elpaso’s fees can be found here.

Account Opening Requirements

To open an account, certain preparation is required. This involves compiling and submitting the necessary documents. The preparation time depends on the client. Account opening takes between 5 to 10 business days from the date of document submission.

The PS may request additional information or documents, which could extend the processing time. Applications may be rejected without explanation.

Staff communicate in English and Russian. Card issuance is planned.

Required Documentation

Originals of all incorporation documents are required. Additionally, you must provide:

• an extract from the company register (not older than 6 months);
• ownership structure diagram and registry declarations for each ownership level;
• documents confirming business activity and source of funds;
• if applicable, a bank statement from another bank for the past 6 months;
• proof of current business address (lease agreement, utility bill, or phone bill, not older than 3 months);
• company and shareholder identification numbers (if any);
• company website.

Documents required from the client relationship manager:

• original national ID;
• original passport;
• original tax ID code;
• selfie with passport;
• original utility bill (gas or electricity, not older than 3 months) for address confirmation.

Documents required from the company’s beneficial owner:

• original national ID;
• original passport;
• original tax ID code;
• selfie with passport;
• original utility bill (gas or electricity, not older than 3 months) for address confirmation.

You must also provide documents confirming the source of income (assets) of the beneficial owner. This package may include:

• employment certificate and bank statement confirming salary;
• tax declarations;
• documents confirming inheritance;
• documents confirming fund transfers and account balances;
• documents confirming the sale of movable or immovable property.

If the beneficial owner is a company founder, company-related documents, account statements, tax declarations, and documents confirming dividend payments must be submitted.

If the beneficial owner is a sole proprietor, an extract from the registry, tax declarations, and bank statements are required.

You may also need:

• a bank certificate confirming the deposit and documents verifying the source of funds;
• other documents verifying income sources.

The payment system may request additional documents/information during the application process.

Account Opening Process

A visit to the office is necessary for filling out the questionnaire and verifying documents of the company, director, and shareholder. The documents are then sent to the payment system for approval, after which the account is opened. Personal visit is not required. The payment system’s website is elpaso.co.uk.

For detailed information about opening an account in Elpaso, please contact us. We will answer your questions and assist with opening an account in Elpaso or another PS of your choice.

Call us via messenger: +372 552 00 78

Email us: info@sowana.ee

Subscribe to our Telegram channel @EstoniaSowana to stay updated with relevant articles.

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Сообщение Opening a bank account – Elpaso payment system (England) появились сначала на SOWANA.

The new law will enable the German government to take further measures against tax evasion and unfair tax competition from tax havens.

This legislative document includes protections for individuals and companies from continuing or entering into new business relationships with non-cooperative jurisdictions.

The German tax haven law goes beyond the minimum standards set by the EU. The draft law includes the following provisions:

• A ban on the deduction of business and professional expenses;
• Stricter rules for controlled foreign corporations (CFCs);
• Measures to tighten withholding tax regulations;
• Indicators related to profit distribution and share sales;
• An obligation to submit expanded information to the registry about beneficial owners, including details of all their citizenships.

The draft law provides for appropriate combinations of measures, carefully tailored to different situations. In this way, the bill is designed to ensure the application of the most suitable protective measures in each individual case.

If approved by both houses of parliament, the law will come into force on **August 1, 2021**. The transition period will last until June 30, 2022.

Сообщение Germany’s tightening of transparency requirements for companies появились сначала на SOWANA.

Cryptocurrency trading is becoming increasingly popular, prompting users to ask: do you need to pay taxes on cryptocurrencies, and if so, when? Generally speaking, there are three situations where tax obligations arise: when cryptocurrency is converted into fiat currency, when it is exchanged for another cryptocurrency, and when it is used to pay for goods and services.

When it comes to cryptocurrencies, only income-generating transactions are subject to taxation, and each case must be assessed individually. For example, if a person buys one bitcoin for €18,000 and sells it for €10,000, they do not need to declare the transaction because there was no income. Conversely, if someone buys one bitcoin for €10,000 and sells it for €18,000, the €8,000 gain must be declared and taxed at 20%.

Thus, the income earned is the difference between the purchase price and the sale price of the cryptocurrency. The purchase or sale price or income must be converted to euros based on the exchange rate on the date the income was received or the expense was incurred. If the transaction was made under market conditions, the prevailing exchange rate can be used. If the transaction does not involve euros, the income must be converted accordingly.

When exchanging one cryptocurrency for another, the market value and income (i.e., profit) must also be calculated. For example, a person buys two litecoins for €260, and a few months later exchanges them for 0.2 ether. At the time of exchange, the market price of the two litecoins had increased to €500. Thus, the person earns €240 (€500 – €260) in profit, which must be declared and is subject to income tax.

When paying for goods or services with cryptocurrency, the income is the difference between the purchase price of the goods or services and the acquisition cost of the cryptocurrency used. For instance, a person owns one bitcoin bought in June 2017 for €2,500. In December 2020, they use it to buy a car when the market price of bitcoin is €30,000. Thus, the person earns €27,500 (€30,000 – €2,500) and must declare this income and pay tax on it. This calculation applies to the purchase of any goods or services (e.g., food, electronics, beauty treatments, etc.).

It is important to note that converting income already taxed (e.g., salary, dividends, director’s fees) into fiat currency or using such income to buy goods or services does not incur additional tax obligations. For example, if a person receives a February salary of 0.05 bitcoin from OÜ X, which has been declared and taxed by the company based on the market rate, the person does not have to declare it again in their crypto wallet. If the person uses that 0.05 bitcoin to buy goods or services, it does not need to be declared again.

If an individual develops cryptocurrency, the income must be declared as business income. Cryptocurrency development is considered entrepreneurship and is treated as the production of goods for tax purposes. Tax liability arises from any gain made through the disposal of cryptocurrency via sale or exchange. A person who regularly develops virtual currency must register in the Commercial Register and operate either as a sole proprietor (FIE) or through a legal entity. A registered FIE may deduct and declare business expenses incurred (e.g., equipment, electricity, etc.).

A private individual cannot deduct expenses when earning income from cryptocurrency development. FIEs must also keep in mind that cryptocurrencies cannot be transferred to a special deferred tax account. Investments in cryptocurrency can also be made through business associations, which are subject to separate tax rules.

Functions of the Estonian Tax and Customs Board (ETCB)

The goal of the Estonian Tax and Customs Board (ETCB) is to maintain transparency in the cryptocurrency community and identify individuals and companies conducting fraudulent activities. Since most crypto transactions are cross-border, international cooperation is key in sharing information about crypto-related risks.

Today, we can say that information exchange with foreign countries is effective, and nations understand that successful cooperation helps identify those who have moved their operations abroad and do not follow exemplary tax practices.

At the same time, the ETCB continues to improve its practices in handling cryptocurrency tax matters. The number of consultations and investigations into tax evasion related to various cryptocurrencies is increasing monthly. In addition to our own experience in crypto development, there are legal precedents—such as a case where a trading company benefited from an unjustified VAT deduction. We have also examined a case involving information received from a foreign crypto exchange and a person’s account with a foreign credit institution. We continue to advise and investigate individuals and business associations, and the number of cases is steadily growing.

Consequences of Tax Evasion

What happens if you don’t pay taxes? The ETCB can retrospectively assess tax liability for up to three years, and up to five years in cases of deliberate tax evasion. In addition, interest is charged on unpaid taxes.

It is also a criminal offense to provide false information in a tax declaration. A private individual can be fined up to €1,200, while a legal entity can be fined up to €32,000. Providing false information to reduce tax liability, thereby concealing a tax obligation of €40,000 or more, is a criminal offense punishable by a fine or imprisonment for up to five years. Concealing a tax liability exceeding €400,000 can result in imprisonment of one to seven years.

Contact us:
Messenger: +372 552 00 78
Email: info@sowana.ee
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We look forward to collaborating with you at Sowana.

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Сообщение Sowana explains how to pay taxes on cryptocurrency in Estonia появились сначала на SOWANA.

Legal Basis

Applicant Requirements

Cross-Border Activities

Submission of Applications

State Fee Payment

Application Review

Modification of License Conditions

Revocation of License

Supervision

Cost

Contact Information

You should apply for a license if you intend to operate in the following areas:

• Activities as a non-bank financial institution (excluding sectors licensed by the financial supervision authority, where licenses are issued by the financial supervision authority);
• Provision of trust and business partner selection services;
• Provision of virtual currency services.

The license is issued by the Financial Intelligence Unit (FIU) indefinitely.

The activities of financial service providers are regulated by the Money Laundering and Terrorist Financing Prevention Act (MLTFP Act).

Сообщение Financial service provider license (cryptocurrency) in Estonia появились сначала на SOWANA.

If your company intends to carry out international transportation using vehicles weighing
over 3.5 tonnes, you must obtain an EU Community License.
This license confirms that your company meets the standards established by
EU Regulation No. 1071/2009 and No. 1072/2009.

For vehicles weighing between 2.5 and 3.5 tonnes, an EU regulation requiring a license
came into effect on May 21, 2022, but its enforcement in Estonia began
from January 1, 2023.

Important: You do not need an international license for driving in
Latvia, Lithuania, and Finland if the vehicle does not exceed 3.5 tonnes
and you are not transporting goods for third parties.

The international license is issued by the Estonian Transport Administration and includes a
main document and certified copies (one for each vehicle). These copies must be
kept in the cabin of the corresponding vehicle and presented during inspections.

Сообщение Community license for the carriage of goods in Estonia появились сначала на SOWANA.

There are two ways to obtain the card:

• The application and all required documents can be submitted online via the government portal. It takes about 15 minutes to complete, and the state fee is 100 euros (payable by card).
• If you are in Estonia, you must visit the police and provide the application along with the full set of documents.

A decision will be made within 30 days. There is a chance of rejection if the applicant has a criminal record, negative background, or if Estonian authorities find no valid reason to grant e-residency.

In case of rejection, you can reapply.

You can collect your e-resident card in Estonia within 2–3 weeks. Or you can collect it from one of 34 countries at an Estonian embassy or consulate in 3–5 weeks. Along with the card, you will receive an ID card reader and PIN codes that can be used to confirm your actions.

The e-Resident Card is:

• Not citizenship in the usual sense. The holder has no right to reside in Estonia, obtain a residence permit, or enter the country. It is also not tax residency. Foreigners can obtain tax residency only after staying in Estonia for more than 183 days in a year.
• Not a substitute for a visa or passport.
• The card allows you to register a business in Estonia online and use Estonian online banking services.
• Interact with the Tax and Customs Board, submit declarations and applications online.
• Use a digital signature for documents, including contracts. This enables you to open companies, manage them, and submit tax declarations remotely from anywhere in the world.
• Access other Estonian services that require electronic identification and submission of applications, including the start of business activity.
• Receive and use a personal identification number in Estonia.
• Obtain licenses online.

In general, having e-Resident status opens the following opportunities:

• Access to the internal market of the European Union.
• The right to open a bank account in any Estonian bank. However, in practice, this can be difficult without a reliable intermediary, as the EU imposes strict requirements on e-residents due to previous cases of financial fraud.
• Access to all Estonian electronic services.

Who is this service for?

• Foreign entrepreneurs and startup founders who want to enter the European market.
• Travelers who want to simplify their stay in Estonia or the EU.
• Anyone planning to build and grow economic ties with Estonia.

How can we help?

We’ve gathered all the most useful information in our Telegram channel: @EstoniaSowana

Subscribe to make sure you don’t miss the latest updates and articles.

Contact us to learn everything about becoming an e-Resident!

Messenger: +372 552 00 78
info@sowana.ee

You deserve accurate information and attentive specialists!

Сообщение E-RESIDENT CARD (Estonian electronic residence), what is it? появились сначала на SOWANA.