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.

According to the cryptocurrency exchange CoinDesk, the bitcoin rate rose as high as $ 43,710.23. The rapid rise in price arose due to the fact that the company Tesla reported to the Securities and Exchange Commission on its investments in crypto-assets $ 1.5 billion. On the wave of this news, exchanges reacted to the growth of the currency.

Recall that Ilon Musk believes that bitcoin will soon become one with traditional currencies and will be recognized around the world. In a candid statement, the head of Tesla regretted that he had not purchased this cryptocurrency earlier at a more favorable rate.

In the description of his Twitter account, the entrepreneur added the hashtag bitcoin. This event caused the asset to jump by 15% on the same day.

Сообщение Bitcoin broke a new all-time record in February появились сначала на SOWANA.

If accepted, this proposal would allow other countries to increase their revenues from large corporations that are already operating in multiple jurisdictions but paying minimal taxes there.

The new U.S. tax model aims to accelerate negotiations on creating a more reliable international taxation system. It could halt the spread of domestic tax schemes and prevent multinational corporations from avoiding taxes and shifting profits to other jurisdictions.

The United States intends to raise the national corporate tax rate from 21% to 28% and is proposing a global minimum tax rate of 21%. Washington is collecting taxes to fund President Biden’s new ambitious $2.25 trillion economic plan. According to officials, the plan would pay for itself over 15 years through the proposed tax increases.

Recently, the International Monetary Fund proposed a temporary “solidarity tax” on corporations that made large profits during the coronavirus crisis. The idea is to introduce a tax on excess profits as a gesture of solidarity with those affected by the crisis and to replenish national budgets. According to the IMF, such a tax could replace or supplement the existing corporate income tax.

Sowana reminds that Secretary Yellen’s statement came just a few days after President Joe Biden announced an ambitious plan to revive the domestic economy. U.S. authorities are actively seeking new ways to increase budget revenues in this regard.

Сообщение The U.S. has proposed a new weapon against offshoring 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
Subscribe to our Telegram channel: @EstoniaSowana to stay updated on new articles.

We look forward to collaborating with you at Sowana.

You deserve accurate information and attentive specialists!

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

A request for an apostille on Russian official documents to be exported abroad can be submitted via the Unified Portal of State Services. The request must be signed with an advanced unqualified electronic signature. When verifying documents, the competent authorities will interact with each other via SEMS.

The electronic apostille will be issued by creating an electronic version with a two-dimensional barcode. Upon request of the applicant, the apostille will also be issued as a paper document. The apostille registry will also be maintained in electronic form. The decree will come into force on 01.06.2022.

Many countries already have electronic apostilled legal and other official documents: Georgia, Colombia, Andorra, part of Spain, New Zealand, Bulgaria, Belgium, USA, Moldova and some other states.

The very idea of electronic apostille is not only a convenient and modern innovation, but also guarantees a higher level of information security compared to the widely used paper apostille. The file is virtually impossible to forge, and any manipulations with it will make the created document invalid. In addition, the electronic apostille system allows for remote certification of official documents, as well as for tracking the facts of violations committed by notary bodies.

Сообщение Electronic apostille will be introduced in the Russian Federation 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.

The Concept of CFCs in Ukraine

A Controlled Foreign Company is a structure managed by a resident of another country. But how should one handle such a structure to avoid falling under constantly changing laws?

The concept of CFCs did not appear in Ukrainian law by chance. It stems from global practice. In all developed countries, it is assumed that if a person owns a non-resident company not subject to taxation in the owner’s country of residence, they must still declare that company and pay tax on its profits—even if the income has not been physically received.

The state is naturally interested in collecting taxes from a foreign company controlled from its territory. In today’s interconnected world, countries cooperate and exchange financial data. Asset movement is easily traceable, so hiding them is increasingly pointless.

The concept of a Controlled Foreign Company was only recently introduced into Ukrainian legislation. It refers to a legal entity or structure registered in a foreign country but controlled by a Ukrainian resident (individual or legal entity). Anyone with a non-resident company must understand that it is now subject to legal regulation, and therefore, this must be taken seriously.

By law, a CFC is any legal entity registered abroad but controlled by a Ukrainian resident. This broad definition allows lawmakers to interpret the CFC concept freely and prevent tax evasion through legal loopholes. Thus, this law cannot be ignored. Every controlling person must register their company to avoid sanctions and fines for failure to report a CFC.

Controlling Persons

Controlling persons are individuals who own more than 50% of a foreign company or those who own at least 10% provided there are other Ukrainian residents among the shareholders and their total combined share is at least 50%.

There are three criteria for identifying a controlling person. First, ownership of a non-resident company where one is a shareholder or beneficial owner via a trust. Nominee shareholders must disclose share quantities, allowing calculation of ownership percentages.

Second, to prevent circumvention of the 50% threshold by dividing ownership among several persons, another rule applies: a person with over 10% ownership is deemed controlling if other Ukrainian residents also control the company. All such persons must report their involvement.

This second criterion is controversial. For example, a person might not know the other shareholders, or shareholder composition might have changed, making it unclear who holds more than 10%. Such cases require individual legal assessment.

Third, if a person exercises de facto control (alone or jointly with others) over a foreign company, they are considered controlling. Even without shares or beneficial ownership, if a person manages or controls the company, they fall under the CFC law and bear responsibility accordingly.

This third criterion applies, for example, to officials banned from owning non-resident companies or businessmen hiding company ownership behind third parties.

Media investigations that expose such control are now reviewed by legal departments in banks, which are tasked with identifying real beneficial owners. Yet, determining the true controller is often complex when documents list one person and journalists another. This topic is still under discussion at banking conferences and behind the scenes.

What Is a Share in a CFC?

What constitutes ownership in a foreign company? The law defines it as a portion of corporate rights, granting the holder benefits and powers, such as voting rights, profit entitlements, and claim to assets upon liquidation. There are also tax benefits associated with income and liquidation proceeds.

De Facto Control in CFCs

Now that we understand what a CFC is, let’s address a critical issue: de facto control. The Tax Code defines this broadly, significantly limiting ways to avoid liability.

De facto control means influencing key company decisions—asset and profit management, contract signing, and liquidation. It includes giving orders to company management. For example, if someone can call and issue binding instructions, that constitutes legal control.

Negotiating on behalf of a company, even without formal authority, also qualifies as control.

One key legal criterion is a power of attorney for major transactions valid for more than one year. This nuance offers an interpretive loophole—most powers of attorney are issued for a year or less, potentially exempting the holder from being deemed in control. However, executing bank transactions from the company account confirms control and falls under the CFC law.

Another indicator is listing a person as founder or beneficiary when opening a company bank account. Ukrainian banks are now required to update data about the ultimate beneficiary of companies that include foreign entities as shareholders. If the listed nominee is not the true owner, banks may request trust declarations or conduct in-depth reviews to identify the real controller.

Banks use directories of known nominee shareholders. When someone is listed as a shareholder in dozens of companies, it’s hard to argue they are the actual owner. In such cases, Ukrainian residents are often listed instead. This information is now available to tax authorities, and failure to report CFCs may result in fines.

Exceptions to de facto control exist. For example, individuals managing assets under a power of attorney—lawyers, auditors, trust managers, protectors, guarantors, insurers—are exempt. The law also curiously lists “enforcers,” a vague term that raises interpretive issues. A Google search suggests “bar bouncer,” which obviously does not fit in this legal context, creating room for manipulation.

Thus, every law-abiding owner of a non-resident company must now report it. First, they must notify their resident legal structure. Then, they must pay tax on the income earned by that entity. The Tax Code details the procedures and deadlines for doing so.

There are two tax options for individuals:

• Standard rate: 18% tax.
• Reduced rate: 9%, plus a military levy.

There are also two taxation strategies:

• Pay taxes on hidden ownership, bypassing the beneficial owner.
• Or formally declare yourself as a shareholder and pay 10.5% tax on dividends (9% + military levy).

What Income Is Not Taxable?

Not all CFC income is taxable. This is one of the most discussed topics in international company taxation. Let’s look at the available exemptions:

• CFC profits are not taxable if Ukraine has a double tax treaty with the relevant jurisdiction and one of two conditions is met. First: the CFC pays effective profit tax at a rate not less than 18%, or the shortfall is within 5 percentage points. (Cyprus, for example, falls slightly below this threshold.) Second: the CFC’s passive income does not exceed 50% of total income. This is to prevent abuse through “wallet” companies that generate income solely from passive sources (stocks, bonds, funds, etc.).
• CFC profits are not taxable if the total income of all a person’s CFCs from all sources does not exceed €2 million by the end of the reporting period. This raises the question: does €2 million refer to income or profit? Income might be considered total turnover, while profit is income minus expenses.

The general formula for taxable profit is: income minus expenses. The result is then taxed. However, international accounting standards sometimes equate income with profit, so clarification is still being debated.

• If a company’s shares are publicly traded on recognized stock exchanges, its profits are not subject to tax. The term “recognized exchanges” is not legally defined but implies that the organization holds a relevant license.
• Another exemption applies to CFCs involving charitable participants. These companies do not distribute profits among shareholders but instead transfer funds to NGOs, which allocate them for specific needs.

Sanctions for CFC Law Violations

If a controlling person fails to report their CFC, they face a fine of 100 subsistence minimums. As of January 1, 2020, this is UAH 210,000.

Thus, penalties should make CFC owners think carefully. There is a long list of sanctions for failure to notify and pay taxes. Avoiding liability is nearly impossible under these provisions.

Preferential Liquidation of CFCs

When an individual realizes they must file reports and pay taxes on each of their foreign companies, they may consider liquidating those assets. Legal complexities and unanswered questions often lead to this decision. A preferential liquidation rule previously allowed the first liquidation (before 30.06.2020) to proceed without including the assets received during liquidation in taxable income.

Сообщение How to get the most out of a CFC in Ukraine while remaining within the legal framework? появились сначала на SOWANA.

Most often, this choice is made by those who aim to work with the European market and also seek tax optimization. Since 2004, Estonia has been a member of the European Union, and the country offers enough benefits and incentives for foreign investors to consider becoming its resident.

So, if you’ve decided to choose Estonia — you’ve made the right decision. What’s next? After registering your company and business, the next step is opening a corporate account.

To save your time and effort, we offer a bundled business registration package:
“Company registration in Estonia + account opening in a UK payment system” – €1300.

Owning an Estonian Company Is Profitable!

Russian language. Estonia was once part of the Soviet Union, and the Russian language is widely spoken here. Along with Estonian and English, Russian is commonly used in business circles.

Low bureaucracy. The country faces practically no corruption, and bureaucracy is kept to a minimum thanks to modern technologies.

IT technology. Estonia has an advanced digital infrastructure. Documentation is predominantly handled electronically.

Close to Moscow and St. Petersburg. A flight between the capitals takes only about 1.5 hours.

Registering a Business in Estonia Is Easy

Registering a company in Estonia is easier through specialized legal service providers. We will help you quickly complete all necessary forms and documents online. Contact us at info@sowana.ee and we will register your company remotely within one day!

Taxation in Estonia

Estonia offers one of the most business-friendly tax systems in the world. The country has never appeared on any blacklist, even though it provides considerable tax flexibility to companies. Estonia has agreements with other countries to avoid double taxation.

The main tax is income tax, which is 20%. However, if a company reinvests its profits into the business, this tax does not need to be paid. Tax is only applied when profits are distributed and dividends are paid. In 2018, a reduced tax rate of 14% was also introduced, which applies under certain conditions.

VAT Number for Estonian Companies

A company registered in Estonia does not need to deal with customs documents. Its goods are not subject to customs control within the EU. Moreover, when selling goods between EU countries, turnover tax is not applied.

Not every company needs a VAT number. Whether it is required depends on several key factors: the type of transactions, type of goods and their movement (import/export), logistics and supply chain, and resale schemes. Generally, having a VAT number indicates that the company is engaged in intermediary activity focused on purchasing goods within the EU. Therefore, such companies must obtain a VAT number.

Simplified Reporting Scheme

Estonian companies submit annual reports. They are not required to report monthly. For annual reporting, the accounting department will need contracts and invoices (primary documents).

The available forms of business in Estonia include:

• FIE – sole proprietor (individual),
• AS – public limited company,
• UÜ – limited partnership,
• OÜ – private limited company,
• TÜ – general partnership.

Foreign residents and investors most commonly choose private limited companies (OÜ).

How to Register a Company in Estonia?

• The registration process begins with gathering the necessary documents.
• You must choose a company name. It must be unique, so it’s better to come up with several options.
• The minimum share capital is €2500, which does not need to be paid up immediately at the start.

For more information about registering a company in Estonia, contact our experts via messenger at +372 552 00 78.

Corporate Account for EUR and Crypto Payments in the UK

UK banks treat foreign clients with particular attention. For foreign companies choosing the UK for a corporate account, local payment systems are the best option. These systems are licensed and well-established.

We offer cooperation with a payment system that, in addition to standard banking services, provides unique tools. For example, it allows active operations with cryptocurrencies.

Why Open a Corporate Account in the UK?

We’ve selected a user-friendly payment system accessible to non-resident companies. The requirements are standard.

Key advantages of the payment system include:

• International payments via blockchain networks, SWIFT, SEPA, ACH, Faster Payments.
• The latest security systems for storing crypto assets.
• Multi-currency accounts supporting up to 8 cryptocurrencies.
• 24/7 online access to accounts via a mobile app.

Perhaps the most important benefit of this payment system is the ability to open a fully secure corporate crypto account — a service rarely available elsewhere globally.

How Expensive Is It to Use a UK Payment System?

The service offers a choice of three tariff plans. During the first month, service is completely free, regardless of the chosen plan. After that, monthly fees, transaction limits, and payment commissions depend on the company’s turnover indicators.

Want to register a company in Estonia? Don’t miss the opportunity to open an account with a UK payment system! It’s both advantageous and secure!

We’ve collected the most useful information in our Telegram channel:
@EstoniaSowana
Subscribe so you don’t miss the latest updates.

Call us on messenger: +372 552 00 78
Email us: info@sowana.ee
You deserve accurate information and attentive professionals!

Сообщение Registering a company in Estonia and opening a UK account for euros and cryptocurrencies? появились сначала на SOWANA.