Banking for startups can be sometimes hard and overwhelming when opening a new account in the heavily regulated European market.
The focus of this article will be business accounts in the EU zone, as it is fairly hard to define these recommendations of the other European countries outside of the EU zone.
The list is not ranked in any way and as always, these recommendations are based on experience and general comments.
How does it usually work
The process of opening a bank account varies a lot from country to country - and this depends on where their banking license is coming from. For example, opening an N26 business account, that is based in Germany, means that you have to condone the German regulator rulesets, which are highly bureaucratic as opposed to, let's say, Lithuanian.
Assuming that you are interested in the digital bank account opening process, here are some of the cornerstones:
- You have to sign-up. (obviously). They will usually ask for a bunch of documentation. Maybe articles of incorporation, VAT ID's etc. Usually, the digital banks have this process fairly streamlined so it should not take much assuming that you have most of your data already.
- You will have to verify yourself. This is a process called Know your customer (KYC) and different countries have different regulations. This process has a couple of rulesets that basically assure the bank that you are the one that is opening this bank account. You will need an ID with you and depending on your nationality, the ID type will differ.
- They will manually approve/reject you. So if you expect to have an account ready in a couple of minutes, think again. Plan ahead a couple of days.
Obviously different digital banks have different features. You should research them accordingly.
Revolut (freelancer + business)
I find Revolut to be the most flexible out of them all. They have both business and Freelancer accounts with very competitive pricing points. Both cases have free accounts as well, which I highly recommend as it covers most of any startup needs.
They grow as you grow approach is fairly positive and very well thought out.
Revolut in Europe is a Bank, licensed by the Central Bank of Lithuania.
N26 (freelancer only)
I don't think that N26 would have made it to the list. It is here just because it is a very well-known bank, regulated in Germany. Their offering is a bit "different" for businesses, and it is limited to freelancers only.
Obviously, if you have a personal account you may consider it, but the other members on this list have better and more flexible solutions. Also - you can only have one account - either personal or freelancer - so think again.
They have a free entry-level account.
If you need a german banking solution, you also have other alternatives.
Qonto (freelances + business)
Qonto is a french based bank that only offers business accounts. I think of Qonto as more of an account for SMEs. So a bit more advanced than a startup solution - they do offer freelancer and startup approaches as well, but you know - not as geared towards them.
They do not have a free entry-level account. Even their lowest featured account is more expensive than the pro accounts of Revolut.
You can open a Qonto account in Spain, Germany, France, and Italy.
Penta is a German company, whose Banking license is powered by Solaris Bank, a german Banking as a Service institution. They comply, similarly to N26, with german regulatory rulesets so they tend to be a bit more "bureaucratic" than anyone else.
They offer a lot of different "add-ons" to their pricing point without upgrading a tier. They do not offer a free tier either.
Wise, formerly known as TransferWise is an electronic money institution licensed in Belgium. The reason why it made it to this list is that Wise is very well affiliated and supported by Estonian digital residency - so if you are starting a startup and you likely will incorporate in Estonia, Wise is supported by them all.
Pricing-wise, they have a different approach (and somewhat cheaper) than any of the banks listed above, with the limitation that they are not a Bank.
If you can disregard this fact, then wise is a formidable pay-as-you-go solution - especially with the alternatives that it offers.