Cuenta bancaria de depósito en garantía

Escrow Bank Account

Escrow accountAn escrow account is a special escrow account that holds property, documents or funds until certain circumstances occur or certain obligations are fulfilled. In global practice, escrow accounts can be opened by banks, law firms, specialised firms or escrow agents.

Usually escrow accounts are used to fulfil a tripartite agreement between the parties: the seller, the buyer and a third party (a bank or other organisation providing escrow account services). The latter fulfils the function of trustee and guarantor.


Process of opening an escrow account

  • drawing up and signing a tripartite contract, the parties to which are the payer (the so-called depositor), the beneficiary (the beneficiary), and the trustee,
  • registration of the relevant account,
  • the deposit of an agreed amount of money used for the settlement of the financial transaction that is the subject of the contract.

In turn, the bank (trustee) undertakes to ensure the availability of a non-combustible balance by technically blocking the money until the agreed obligations are fulfilled.

Use of escrow accounts

An escrow account is a special account for secure settlements between buyer and seller. It is also called a conditional account because it automatically transfers from one owner to another when certain conditions occur.

The buyer deposits the money into an escrow account and the seller can collect it when it fulfils the conditions prescribed in the contract. The bank, as an independent intermediary, monitors the fulfilment of these conditions.

An escrow agreement can be used to transfer not only money, but also securities and any movable property. The intermediary can be not only a bank, but also, for example, a law firm. Escrow agreements are also used by companies, for example, when paying for goods and services of partners.

Escrow is an alternative to a safe deposit box and letter of credit. It can be used when you need to buy or sell something expensive , e.g. EMI/PSP licence in Europe

Use of escrow account in international transactions

  1. The buyer and the seller go to the bank together and sign a tripartite agreement. The contract specifies the conditions under which the seller can receive the money. The term of the contract must be specified.
  2. The Buyer shall deposit the amount specified in the contract into the escrow account.
  3. The seller fulfils the terms and conditions of the contract and sends the required documents to the bank.
  4. The bank gives the seller access to the account or transfers them to the seller’s account.

If the transaction does not go through within the agreed period and the seller fails to submit the necessary documents, the bank closes the account and returns the money to the buyer. If the paperwork is delayed, the agreement can be extended, but the bank usually charges an additional fee for this.

Who owns the money in the escrow account?

By law, until the moment of settlement, the money in the escrow account belongs to the person who deposited it. After that, it belongs to the person in whose favour the account was opened. The moment of settlement occurs when the seller fulfils the conditions set out in the contract.

Legal support of transactions and escrow account

Transactions with property and intellectual property in business are made for significant sums, which increases the cost of legal errors in their execution. The execution of any such transaction requires the utmost attention to the subtleties and formalities that inevitably accompany them.

International legal entity sale transactions involve significant organisational efforts and are to be managed as full-fledged projects. When concluding these transactions and registering rights, there are a number of issues and nuances that the parties must inevitably face and pay attention to. Such important issues include, in particular, legal and economic risks, tax consequences of the transaction, terms of validity of the transaction, moment of transfer of ownership, settlement terms and many others.

International transactions and the intricacies of private commercial law have always been one of the most complex aspects of international business. Attempts by participants to understand and conclude an international transaction on their own without the advice and support of a lawyer can result in huge losses and reputational risks for each party.Lawyers from Regulated United Europe will structure the transaction, prepare an international contract that meets all the requirements of international law and ensure that your interests are protected in fulfilling the terms of the transaction. We will be able to obtain the most favourable terms for your party, which will help you get the most out of your international transaction.

There are three parties involved in any such transaction: the buyer, the seller and the escrow agent represented by our company Regulated United Europe. Our accountant and transaction attorney monitors the transaction and transfers funds from the escrow account to the seller’s side only after all necessary documents have been signed. The essence of settlements through such accounts is that all values from the account are transferred by the escrow agent in favour of one of the parties to the transaction only if it has fulfilled its obligations under the transaction to the other party.

In the world practice escrow accounts are used on a par with such instruments as letter of credit or safe deposit box.

The use of an escrow account allows the parties to an obligation (transaction) to ensure the fulfilment of their obligations and minimise their risks of the failure of the transaction or the possibility of fraud by one of its parties.

As part of contract law, clients of Regulated United Europe can utilise this service for any commercial transactions.

An escrow account agreement is a tripartite agreement whereby one party, in fulfilment of its principal obligation, transfers money not directly to the counterparty but to a third party (the escrow agent) – in this case the law firm Regulated United Europe.  The second party can only receive this money once the circumstances specified in the contract have occurred.

This account is convenient and does fulfil its primary function of providing adequate security for the obligations of the main contract. The escrow account agreement is a secondary contract to the main contract, because it is concluded only after the parties have come to an agreement on the main contract. The use of this agreement is possible in different business spheres and in any transactions: in the purchase and sale of property, residential and non-residential premises, aircraft, yachts and any intellectual assets and legal entities, in mergers and acquisitions of companies, in any international contracts.

The funds transferred to the escrow account are segregated. That is, they are transferred to the escrow company’s special account, accounted for by the bank and blocked and, as a general rule, none of the three parties has the right to dispose of them until circumstances specified in the contract occur.

Why do you need an escrow account with a bank?

There are three parties to this account: the buyer (the depositor), the seller (the beneficiary), and the bank (the intermediary). The buyer wants to buy something, but does not trust the seller; the seller wants to sell something, but does not trust the buyer. They make a contract of sale, then go to the bank and make the following agreement:

  • The buyer escrows the account and deposits the money into it.
  • The buyer sets the conditions under which the money can be transferred to the seller. The buyer sets the conditions under which the money can be transferred to the seller.
  • The buyer cannot withdraw money from the account just like that – he has to break the sale contract, only after that the full amount can be withdrawn.

Once the agreement has become effective, there are three possible developments:

  1. The seller has provided evidence of fulfilment of the transaction as stipulated in the contract. In this case, the bank transfers the entire amount from the escrow account to the seller’s account.
  2. The seller has failed to fulfil its obligations or the time specified in the contract has expired. The bank transfers the entire amount from the escrow to the buyer’s account, i.e. returns.

3 One of the parties (seller or buyer) unilaterally terminates the agreement. As in the previous case, the bank transfers the entire amount from escrow to the buyer.

In case of partial fulfilment of obligations with subsequent termination of the agreement, the bank will still return the entire amount to the buyer – the seller can only achieve partial payment through the court.

The bank or escrow agent charges a fee, usually up to 1% of the amount placed in the account.

When is an escrow account used?

In most transactions, it is not necessary to open an escrow account.

An escrow account is opened for large transactions in two cases:

  1. When one party has doubts that a partner will hold up their end of the bargain.
  2. When a long period of time elapses between the day of payment and the receipt of the goods, completion of the transaction or fulfilment of the service.

Companies and entrepreneurs can work with an escrow account in transactions involving the sale of a business, trademark or inventions, the purchase of commercial real estate or the transfer of ownership of international companies.

Who is involved in escrow account transactions

There are three parties involved in escrow account transactions: the depositor, the beneficiary, and the escrow agent. The depositor is the person who opens the escrow account, the buyer. The beneficiary is the one who will receive the money if he or she fulfils the terms of the transaction. The escrow agent is the bank where the parties open the account.

Advantages and disadvantages of an escrow account

There are several advantages and nuances to working with an escrow account.

Pros Minuses
  • Guaranteed settlement between the parties to the transaction. The depositor cannot withdraw money from the account at any time and at will, and the beneficiary cannot withdraw money from the account until he fulfils the terms of the transaction. If the transaction falls through, the money is returned to the depositor.
  • An escrow account cannot be seized if the depositor goes bankrupt or has tax debts.
  • Not all banks open escrow accounts.
  • Banks do not charge interest on the amount with an escrow account as they do with a regular deposit.
  • The depositor pays a fee to the bank for opening an escrow account.

How an escrow account differs from a safe deposit box and a letter of credit

The safe deposit box and letter of credit are instruments that can also be used for guaranteed settlements.

A safe deposit box is a safe deposit box in a bank for cash. The depositor, i.e. the person who buys a product, service or legal entity, rents a safe deposit box at the bank and deposits the money there. In addition to the buyer, other persons, such as the seller, may also have access to the safe deposit box. For this purpose, the buyer must agree in advance with the bank who can have access and under what conditions. As a rule, on presentation of a document that the transaction between the seller and the buyer has taken place. Thus, after the transaction, the seller presents the closing document to the bank and takes the buyer’s money from the safe deposit box.

The main difference between a safe deposit box and an escrow account is cash settlement. In addition, it can only be used by individuals. If legal entities from different countries are involved in a transaction, a safe deposit box is not suitable.

Letter of credit is a form of settlement where the bank freezes the buyer’s money and transfers it to the seller’s account only when the seller fulfils the terms of the transaction. The principle of operation is the same as with an escrow account.

One of the differences between a letter of credit and an escrow account is the types of transactions for which the instruments are used. There are technical differences as well. In letter of credit transactions, the buyer can use promissory notes. This is a type of document where the debtor promises to pay money to the seller within a certain time frame. With an escrow account, only non-cash settlement is possible.

A letter of credit can be cancelled at any time without even notifying the seller. This cannot be done with an escrow account.

How to open an escrow account with a bank

What documents are needed to open an escrow account. It is necessary to submit an application to the bank and conclude an agreement. The escrow account agreement is signed by all parties to the transaction: the depositor, the beneficiary and the bank. In it, they specify what goods, work or services the depositor is buying, the terms and conditions of the transaction, the documents that will confirm the fulfilment of these terms and conditions, and the terms and amount of payment.

Can the depositor take the money back? A depositor may take money back from an escrow account in two cases:

  1. The transaction has broken down and the parties have cancelled the contract. It is not possible to withdraw money from the account at will.
  2. The bank where the escrow account is opened has gone bankrupt or lost its licence.


  1. An escrow account is a special account for the seller and buyer that they open with a bank for specific transactions. As soon as the transaction is closed and the seller withdraws money from the account, the account is automatically closed.
  2. A bank freezes money in an escrow account. The depositor cannot simply take it away, and the beneficiary cannot withdraw it if he has not fulfilled the conditions. The account cannot be seized if the depositor has debts or goes bankrupt.
  3. When opening an escrow account, the parties enter into a contract. One of its key points is the terms and conditions by which the parties understand that the transaction has been completed or not. The parties themselves determine which documents are to be considered evidence to the bank of the status of the transaction.
  4. When the transaction is cancelled, the escrow account is paid to the depositor.
  5. Similar instruments for guaranteed settlement are a safe deposit box and a letter of credit. They differ from an escrow account in terms of their use.

Crypto escrow services

Cryptocurrency escrow services are a mechanism that provides security for financial transactions between parties, ensuring that payments in cryptocurrencies are made after all conditions of the transaction have been fulfilled. With the growing interest in and use of cryptocurrencies, Lithuania and the Czech Republic emerge as countries with a favourable regulatory environment for the development of such services.

Lithuania: innovation regulation and technology support

Lithuania is actively developing its legislative initiatives in the field of cryptocurrency and blockchain technologies, making it one of the leading countries in providing cryptocurrency escrow services. Thanks to its policy of supporting innovative technologies, Lithuania offers unique opportunities for companies seeking to utilise blockchain to enhance the transparency and security of financial transactions.

Lithuanian legislation allows cryptocurrency escrow services to operate in a legally clear environment where the rights and obligations of all parties are clearly defined. This contributes to the growing trust in this kind of services by both local and international clients.

Czech Republic: stability and investment protection

The Czech Republic offers a stable economic and legal environment for doing business, including cryptocurrency escrow services. The country is known for its progressive cryptocurrency policy and provides a high level of investor protection. The Czech authorities are constantly working to improve the legislative framework, which creates favourable conditions for the development of cryptocurrency initiatives.

In the Czech Republic, cryptocurrency escrow services can count on support in terms of tax breaks and other business incentives, making it attractive for startups and international companies looking for a reliable legal framework for their operations.

Prospects and challenges

Cryptocurrency escrow services in Lithuania and the Czech Republic offer significant business opportunities in the face of increasing demand for secure and transparent financial transactions. However, despite the favourable regulatory environment, companies wishing to engage in such services need to consider a number of specific challenges:

  1. Technical implementation: System reliability and security are critical, as any failures or vulnerabilities could result in loss of funds or data.
  2. Regulatory Compliance: Regulatory changes need to be closely monitored to ensure full compliance with regulatory requirements.
  3. Customer Trust: Building trust in the cryptocurrency industry takes time and effort, especially given the volatility of the market.


Lithuania and the Czech Republic offer attractive conditions for the development and provision of cryptocurrency escrow services due to their innovative approach to regulation and support for new technologies. Companies operating in this field will not only have to take advantage of the favourable business climate, but also constantly adapt to the changing market to ensure the success and sustainable development of their business in the long term.

 Blockchain escrow services

In today’s digital world, blockchain escrow services are gaining popularity by providing a high level of security and transparency in financial transactions. Lithuania and the Czech Republic stand out in Europe for their innovative approach to regulating and supporting blockchain initiatives, which makes them attractive for the development of such services.

Lithuania: progressive legislation and state support

Lithuania is one of the leading blockchain technology countries in Europe, actively innovating in the financial sector and creating favourable conditions for the development of cryptocurrency projects, including escrow services. Lithuanian regulators offer clear and transparent conditions for blockchain technology companies, which simplifies the process of launching and managing blockchain-based escrow services.

Lithuania not only actively supports the development of blockchain projects, but also provides a multi-level support system, including tax incentives and grant funding for innovative startups. This policy attracts many international investors and entrepreneurs who want to realise their projects in a jurisdiction with a developed infrastructure and transparent regulatory framework.

Czech Republic: reliable and affordable

The Czech Republic, known for its stable economic and political system, also provides a favourable environment for blockchain initiatives. Czech authorities recognise the importance of blockchain technology for economic growth and are taking steps to create an appropriate environment for the industry.

The Czech Republic stands out for its moderate approach to regulating cryptocurrency transactions, offering companies a stable and predictable legal environment. This creates confidence among entrepreneurs and investors that their projects will be legally protected. Moreover, the Czech Republic offers an affordable business environment, including low operating costs and a high level of IT expertise.

Prospects and challenges

Despite the favourable conditions, businesses focused on launching blockchain escrow services in Lithuania and the Czech Republic should consider some challenges. It is important to ensure that all operations are compliant with GDPR and local data protection laws, as security and privacy of information play a key role in user trust.

In addition, potential changes in the regulatory environment should be expected, as many countries are actively working to improve their laws in response to the rapid development of the cryptocurrency market. This requires companies to be flexible and adapt their strategies to the changing environment.


Lithuania and the Czech Republic are attractive countries for the development and implementation of blockchain escrow services due to their innovative legislation, government support and stable economic environment. These countries offer ideal conditions for companies looking to take advantage of blockchain technology to create safe, secure and efficient escrow services.

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At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Vilnius, Prague, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.

Company in Lithuania UAB

Registration number: 304377400
Anno: 30.08.2016
Phone: +370 661 75988
Email: [email protected]
Address: Lvovo g. 25 – 702, 7th floor, Vilnius,
09320, Lithuania

Company in Poland Sp. z o.o

Registration number: 38421992700000
Anno: 28.08.2019
Phone: +48 50 633 5087
Email: [email protected]
Address: Twarda 18, 15th floor, Warsaw, 00-824, Poland

Regulated United Europe OÜ

Registration number: 14153440–
Anno: 16.11.2016
Phone: +372 56 966 260
Email:  [email protected]
Address: Laeva 2, Tallinn, 10111, Estonia

Company in Czech Republic s.r.o.

Registration number: 08620563
Anno: 21.10.2019
Phone: +420 775 524 175
Email:  [email protected]
Address: Na Perštýně 342/1, Staré Město, 110 00 Prague

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