How to start a company account for Bondora?

For years I’ve been investing as a private person in Bondora, so today when I finally got to registering my business account, then I realised that I didn’t actually know how to do that since there isn’t an easy button somewhere and quickly glancing through the informational material didn’t give me the result (the guide is actually accessible here).

I’m assuming that at least one person has had the same problem as me, so here is a short overview of how it goes: (I just e-mailed investor@bondora.com and they were nice enough to hold my hand through the whole process).

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Step 1: Must have a verified personal account

I actually registered with Bondora such a long time ago, that I had never gone through the whole verification process as a private person. It’s just two easy steps – they want to see a photo of your ID (legible, has all relevant details) + a copy of a bill that’s listed to your address and includes your name (this might be a problem for people who rent, or who don’t have a lot of bills to pay, to substitute this you can also order a PIN to be mailed to you).

After you’ve presented the relevant documents you have to verify your bank account – I didn’t need to do that anymore, but a 1€ deposit will do it. Verifying the documents took like 15 minutes – maybe because I e-mailed them beforehand, so I’m not sure how representative this is of the general user experience.

Step 2: Provide information about your company

This step just means e-mailing relevant information to Bondora, there is no easy “send into here” button, you just e-mail them all the details about your company (owners, registration number, address, data from the business registry (RIK in Estonia) and info about the beneficiaries).

After this you just have to wait until they have looked over the documents and add a business account to your ordinary account. You can access the account afterwards in the top right corner (where your name is) and easily switch between different accounts. You just have to log in and out to make it work.

Step 3: Invest!

Once your account is registered, you can add money to your account (remember business account for the business profile!) and start investing when the money is there. Overall it was a reasonably easy process, customer service was pretty helpful and I’ve already made my first bids from my business account.

25 thoughts on “How to start a company account for Bondora?

  1. Much interesting is the process of registering company account with Interactive Brokers. I am going through the process at the moment, it has lasted about 3 days now and just sent some more interesting information and documents to them that are apparently required 😀

      1. Depends. As I do some freelance, I have some money to invest as a company. Till now I invested it mostly into P2P, however it is time to move into other asset classes to diversify my portfolio.

        I lose only on tax when I take the money out from the company, however I don’t plan to do it in a near future. The compounding effect will do it’s job until then and one might even win, not lose thanks to it. (Have not done the exact math yet, but paying the salary (and even dividends in this case?) is always the worst thing to do).

        Also some index funds (probably etf’s also) in EU (not common in US) will not pay the dividends out and will reinvest them, therefore there is no loss in sense of dividends.

      2. What taxes are you referring to exactly here? And compared to what? (I have Estonian company account on IB as well)

        1. If you invest into dividend stock in Estonia as a private person using an investment account your dividends don’t get double taxed – the business pays taxes on dividends you get and you can take them to use.
          If you invest as a business and receive dividends, then to take money out of the company you have to pay an addition al 20% tax to take out dividends from your own business, meaning double taxation (you can take out earned dividends tax free only if you own more than 10% of the other business, so never going to work as a business.) This means double taxation if you invest into dividend stock as a business.
          Example 1: (private person) Earn 1000€ in dividends – taxes paid, all fine.
          Example 2: (business account) Earn 1000€ in dividends – pay extra 20% if you want to take it out of the business – leaving you with 800€. Of course if you plan to reinvest for a long time you won’t take the tax hit for a while, but you will in the end.

          1. Got it – didn’t realize this was in reference to dividends specifically. Does this exemption only apply to dividends paid by Estonian companies?

            However, if you, as Taavi, have company income to invest, shouldn’t it be more or less a wash since you can invest 20% more as a company than you could if you took the money out from the company first?

            Assuming a stock that pays 5% dividend:

            Company earns money and invests directly into stock and subsequently re-distributes these dividends to private person, at which point they get taxed at 20%:
            fully taxed dividends received = company money x 0.05 x 0.8

            Company earns money, distributes money to private person and pays 20% tax on entire amount, after which private person invests net amount into same stock and received dividend tax free:
            fully taxed dividends received = company money x 0.8 x 0.05

            Am I missing something?

            1. Yes, you are correct, which is why Taavi pointed out that since he would have to get money out of the business to invest as a private person it’s a net gain for him. However, if you have money in your hands as a private person already – if you are a salaried employee, then there isn’t much point in moving the other way.
              I’m currently not planning to switch over (since I just don’t have that much free money in my business account, since I bought an apartment and am moving over P2P investments), however in the future it might end up being a net gain indeed.
              Any dividends you earn in Estonia as a private person are already taxed before they reach you, both Estonian and foreign companies. (The rate might be different though than the 20% you have for Estonian dividends).

            2. Yes you are right. It also important to note that usually it is risky to take all the money out from the company as dividends (if the company did not earn it passively). You are expected to pay salary for the active work, therefor one can risk with charges from tax office.

              There is no law that forces you to take the money out (dividends or salary), so you can invest it with no problems. This makes investing as company even more effective (compared to dividends or salary of cource), if you do everything by the book.

      1. What API solution did you use? I am trying to use beeplus.me, but it is not working. I have completed all the steps, but it won’t bid. “Wait until BeePlus makes bids on Bondora and check out bids done for each auction.” How long do I have to wait? I have two rules set. One of them found 5 auctions. I also have 5 euros to bid.

      1. Tänan vastamast. Aga miks peaks inforuum olema ingliskeelne? Siin blogis räägitakse ju peamiselt Eesti asjadest ja eestlastele pakuks sisu hoopis rohkem huvi ja oleks ka palju vajalikum kui juhuslikult pealesattunud välismaalastele.

        1. Mu blogi lugejatest on 40% välismaalasi, sellest ka inglise keel. Kes soovib eesti keeles lugeda ja arutleda, selleks on eestikeelsed blogid täiesti olemas :)

          1. Ingliskeelseid blogisid on ju veelgi rohkem. Mida veel üks selline juurde annab, kuidas teistest blogidest eristub?

            Blogi lugejate profiil on tekkinud ikkagi keele järgi, mitte keel lugejate profiili järgi. Kuna välismaalasi on määratult rohkem kui eestlasi, siis annavad ka juhuslikult siia sattunud kokku päris suure lugejate osakaalu. Kui palju on siin blogis välismaalase jaoks reaalset sisulist väärtust meelelahutusliku kõrval? Samas eestlase jaoks oleks küll.

  2. Kass, vast on igaühe enda otsustada, mis keeles ja millisele auditooriumile ta oma vabast ajast sisu loob. Kui sulle tundub, et eestikeelseid fin.blogisid on liiga vähe, siis on sul viimane aeg anda oma panus selle tühimiku täitmiseks. Kuluta oma energia ikka sihtotstarbepäraselt. See sinu teemaarendus siin on pehmelt öeldes imelik.

  3. Hi!

    If I invest to Bondora as private person, then when do I pay the taxes? (It’s my first year) Do I pay them only when I whidraw money fom there or do I pay taxes for the interest earned, that is still in Bondora as well?

    Thanks,

    Erki

    1. Hey, Erki!

      Sadly you have to pay taxes based on when it’s earned not when it’s used. Meaning if you earned interest this year (2014), then you have to declare it in February and pay taxes. You do this every year, no matter whether you took out any money or no.

      (Tauri and I are having a training course about important things in social lending, if you’re interested in things such as taxes: https://www.facebook.com/events/541362179360735/ )

  4. Hey, Kristi! For some time now, I have been trying to understand the effects of the law for credit institutions (krediidiasutuste seadus). As I understand, if the primary activity for a business in Estonia is investing, that company has to file for a licence (tegevusluba), starting March 2016 *.

    How are you planning to manage it?

    Is investing the main activity of your business or does it have another primary source of income (as in, do you inject primarily your own money as a private person into the business, thus enlarging its capital, and then invest it or does the business earn its capital itself and then it invests it)?

    Aargh, trying to put the last paragraph into a normal sentence has been … . :-)

    To rephrase everything: do you have any more knowledge about the (legal) mysteries of using a business for investing? I am almost at the point of moving my own finances under a legal entity as well.

    Maybe an excerpt from the article(*) mentioned below sheds additional light to my quesiton:

    “Nimelt ütleb krediidiasutuste seadus, et kui laenude andmine on ettevõtte põhitegevus, siis peaks ettevõte hakkama järgima rahapesu seaduses esitatud nõudeid ning hakkama kõiki laenusaajaid tuvastama, mis ühisrahastusportaalides on (Krista) Teearu kinnitusel pea võimatu ettevõtmine.

    Lisaks hakkab märtsis kehtima krediidiandjate ja –vahendajate seadus, mille järgi kõik laenuandmisega tegelevad ettevõtjad peaksid hakkama omale tegevusluba taotlema. „Tõenäoliselt ei ole ei seaduse koostajad ega finantsinspektsioon mõelnud sellele, et läbi ühisrahastusportaalide laenudesse investeerivaid ettevõtteid on sadu kui mitte tuhandeid,“ möönis Teearu. ”

    So… it would be fancy if I could move my X euros in social lending under a business account and then continue investing, while putting off taxes until the day I take profit – hopefully – but if that makes the company a highly regulated credit institution, it will not make any sense.

    How do you cope with all this and what would your recommendations be?

    Thank you for your time and insights!

    * Article by Äripäev here: http://www.aripaev.ee/borsiuudised/2015/12/11/kas-investeerida-eraisikuna-voi-ettevotte-kaudu.

    1. Hey!

      I’ve looked into this a lot, and even contacted the FI to ask for extra information.
      As it stands – as long as investing is not your main activity, then you’re all set under the law – if the P2P portal follows all the rules (has the license), then you can invest through them.

      However, if investing is your main activity then you are essentially screwed by the current wording of the law – if giving out loans is your main activity. No way around it, you need to get a license to be allowed to keep investing. Currently just the fees for the financial inspection to look into your application are 1000 euros, and I still don’t get how you would be able to fill the regulations, but since it’s your main activity then a license is needed.

      I am lucky that my business has a main income, meaning I can keep on investing without any problems. Even if I didn’t have a main income, to be honest, I would get one now, because it is easier than dealing with all the regulations. (For example having one 12m2 rental apartment – 200€ income per month that allows you to have a ~10 000€ P2P portfolio which would bring in about 200€ per month).

  5. Hey, Kristi!

    I had an awesome idea (that I’m sure nobody has every thought of – haha! :-]) of registering a business account, then buying all the investment pieces using the business account from my private account to – you know – ‘keep the investments in the family’ and then close the private account down.

    Mõeldud, tehtud!

    I put 6 loan pices up for sale for a starter, switched accounts aaand …managed to get my hands on only 2 of the loans. The other 4 had been snatched by somebody else literally within 30 seconds.

    It may well be that there is a bunch of starving investors refreshing the secondary market page to find loans for sale without a markup or a discount, but rather it feels like some software.

    In my knowledge, BeePlus doesn’t scan the secondary market. (?) I don’t know about the program that your other half and you have developed, maybe that does.

    But do you (or anybody else) have any ideas on what it could have been, that was so fast?

    If it was human intervention, I’ll just do the buying and selling at 4:30 am or so. (I’m kidding!)

    But if it’s somekind of a program, I’m kinda screwed with the selling-buying plan. =/

    Any and all thoughts appreciated!

    Thanks.

    1. Hey!

      People have their own API applications built that have the ability to scan the secondary market. Beeplus is just the only public API bidder that exists (for example I use an application to bid which was privately built). You’re pretty much out of luck if you want to sell with a steep discount, secondary market is constantly tracked.

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