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Crypto License in Estonia

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Crypto Exchange & Wallet License in Estonia

Cryptocurrency and Wallet license in EstoniaEstonia offers a regulated legal environment for virtual asset service provider (VASP) companies, being the first country in the EU to create the legal framework for virtual currencies in 2017. Our lawyers and AML compliance professionals provide structured solutions for crypto exchange and wallet licenses setup with corporate and AML compliance services support. MAXCORP is a member of the Estonian Crypto Association and has navigated hundreds of companies to get licensed in Estonia.

Estonia has a clear and favourable legal and tax environment (e.g. 0% corporate income tax) and this small EU country of just 1.3m people is regarded as one of the world’s most advanced digital nations, it is an alternative to jurisdictions like Malta or Switzerland, only with simpler administration. At the same time, since late-2021 the Estonian regulator FIU has been hesitant to enable entry for new market participants. We would be glad to find a solution for your project as our lawyers know the ins-and-outs of the local scene and we are known to find solutions to complex challenges.

Quick summary

Exchange + Wallet License
Remote setup in 4-16 weeks
Price from 8.500 EUR
Min. 1 person structure
Local presence needed
Pricing >>
Contact us >>

Estonian Crypto License “providers of a virtual currency service” is an umbrella license that covers the following activities:

Providers of a service of exchanging a virtual (crypto) currency against a fiat currency, vice versa and crypto to crypto
Official activity license covering services for exchanging fiat to crypto and crypto to fiat and crypto to crypto. When offering such transactions as a service for commission, it becomes an exchange service. Furthermore, most ICO oriented companies will benefit from this license for legal compliance.

Providers of a virtual (crypto) currency wallet service
The virtual currency wallet service means a service in the framework of which keys are generated for customers or customers’ encrypted keys are kept, which can be used for the purpose of keeping, storing and transferring virtual currencies.

The Estonian crypto license covers various activities, e.g. exchange and wallet services and the company has to define its scope of activities itself. The crypto license in Estonia is issued by the Estonian Financial Intelligence Unit (FIU). Our lawyers assist in applying for the crypto license in Estonia by preparing all required legal compliance documentation and managing the process on your behalf. The regulator application review time is up to 2 months (can be extended for another 2 months). During the regulator review they may request the company shareholder(s), management board member(s) and compliance officer(s) for an on-site interview in Tallinn, Estonia.

Key points for Estonian Crypto License Company structure

To apply for the Estonian crypto license to provide cryptocurrency exchange and/or wallet services a privateEstonia Crypto Company Formation limited liability company (OÜ) has to first be set up in Estonia. The minimum share capital requirement is 12.000 EUR, which has to be paid with a monetary payment and the company must have a bank account in European Economic Area. The company setup can be carried out fully remotely with no visit required, it usually takes about 5 business days from the point we receive all required original documentation. The first step we take in the service engagement is analyzing the target shareholding and management structures, which enables us to provide the list of required documentation.

In March 2020 several amendments were introduced in the AML law, which has been further updated in a on-going basis. Mainly the license applicant has to comply with the local substance requirements such as on-site physical office, Estonian resident management board member(s) and local resident AML compliance officer. Subject to project review we may be able to provide full on-going support, including substance and full-scope AML compliance services support.

It is also important to consider that a company holding the crypto license in Estonia has to keep a full and up-to-date overview of all clients (KYC) and transactions (KYT) according to the AML/KYC regulations. The regulator FIU may make enquiries about the activities of the company, especially in regards to following the predefined AML/KYC policies. Further, the regulator may visit the on-site office in Estonia, monitor the work process and conduct interviews with the personnel. Our lawyers are available to consult in this matter according to the specific case, please contact us for further information.

General requirements

  • At least 1 shareholder (natural person or corporate entity). No restrictions to citizenship or residence. For optimal setup structure please consult our legal team.
  • At least 1 management board member (can be the same as the shareholder, but only a natural person). Company management must have residency in Estonia.
  • Estonian resident AML compliance officer requirement. Please contact us for further information.
  • Physical office in Estonia required. Beneficial owners’ details are disclosed to the authorities.

Taxation

  • Virtual currencies (e.g. Bitcoin and altcoins) exchange services are not subject to VAT.
  • Services invoiced (e.g. sales invoices) in virtual currencies are subject to regular VAT rules.
  • Corporate profits are not taxed (CIT=0%) until the profits are distributed (as dividends). Income tax 20% is charged on gross dividends (calculated as 20/80 of the net dividend). Special conditions may apply for a 14% rate (for legal entities).

Banking

Most companies working in the crypto sphere take advantage of crypto friendly fintech banks working under the EMI license. As an additional service we can open an administrative Lithuanian fintech IBAN account for your Estonian company, which can be upgraded for a client funds account in the next stage. For more demanding banking solutions we work with various financial institutions to ensure full range of possibilities (SEPA/SWIFT/Instant SEPA, payment processing etc). The speed and result will depend on your business model, company structure and co-operation during the KYC process. Most of our clients have been able to open an administrative account in a few weeks. Please contact our consultants for a banking advisory quotation.

It is important to note that currently traditional Estonian banks may prove to be difficult to work with regarding non-residents and especially crypto oriented companies, but neighbouring country Lithuanian based fintech banks do not have such challenges, further we can suggest alternative banking options in Europe (eg. Switzerland, Cyprus, Germany, Malta etc.). Please also note that for crypto companies higher level of AML/KYC principles are applied. We can support with appropriate banking solution consideration after we have full overview of the planned activities and financial forecasts to consider the best path forward.

Company formation

Our lawyers support with a new company incorporation or we can provide an already prepared shelf company for a faster setup and license application submission. In our packages the company setup is already included. We also have availability for Estonian shelf companies with older registration dates and active VAT registrations. Usually the most time and cost efficient approach to register a company in Estonia is to purchase a new shelf company, because the founding process can be a challenge to non-residents due to some requirements (e.g. share capital deposit). Mostly non-residents opt for a new tailor-made shelf company to avoid bureaucracy as we have already taken care of all requirements. However, we do assist with new incorporations on request. We will help you to choose the best approach according to your objectives. For more information please refer to the Company Formation in Estonia page »

e-Residency

e-Residency is an optional digital identification card issued by the Republic of Estonia to non-Estonian citizens who do not permanently reside in Estonia, but would still like to take advantage of Estonia’s public e-services. e-Residency does not mean grant any form of citizenship, tax residency, residency right or right of entry to Estonia or the EU. It is not mandatory to obtain the e-Residency card for the company setup or licensing process, but we strongly recommend it as it simplifies the procedures and also the later administration of the company. For more information please refer to the Estonian e-Residency page »

Pricing for Crypto License in Estonia

Setting up an Estonian private limited liability company (OÜ) and applying for the crypto license in Estonia is made simple as our lawyers take care of the full legal procedures on your behalf and we also provide on-going consultations per requirements. The company setup and license application submission can be completed remotely without travel, but an on-site interview with the regulator may be required in the final phase. We also have availability for new and fully licensed shelf companies for swift setup. For more information please contact us for a tailor-made offer for your project >>

  • New LLC company in Estonia
  • Remote company setup
  • Timeframe to start activities
  • Type of setup package
  • Registered share capital
  • Official crypto license type
  • AML/KYC legal package
  • AML compliance consultation
  • Bank account opened
  • Government fee (€3300)
  • SILVER PACKAGE LLC company incorporation package with new license application; only for Estonian residents
  • € 8.500
  • 3-4 months
  • New license application
  • 12.000 EUR (deposit needed)
  • Crypto Exchange+Wallet 
  • SEND ENQUIRY
  • GOLD PACKAGE New LLC shelf company package with new license application; for non-residents
  • € 12.000
  • 2-4 months
  • New license application
  • 12.000 EUR (pre-registered; 0 balance)
  • Crypto Exchange+Wallet 
  • SEND ENQUIRY
  • PLATINUM PACKAGE Activated license LLC shelf company transfer for swift setup inc. bank account
  • per availability
  • 4 weeks EXPRESS
  • Activated license company transfer
  • 12.000 EUR (pre-registered; 0 balance)
  • Crypto Exchange+Wallet 
  • SEND ENQUIRY

* All orders are subject to our review and subject to our final confirmation; conditions may apply; recurring monthly service fees may apply in some cases. Notice: all pricing is indicative and is subject to our final confirmation upon receiving order details; indicative packages for one natural person participant. Prices shown excluding VAT, which is added; in some cases no VAT added. Discounts may be applied. We reserve the right to change our individual and package prices at any time without notice. Additional fees may apply in case of additional participants, corporate shareholder, translation services, legal analysis/opinion services, certified documents orders and more. Please contact us for a detailed offer specific to your project.

Legal Framework and Requirements in Estonia

The legal framework is governed by the Money Laundering and Terrorist Financing Prevention Act (link) which first entered into force March 2020. We can prepare all policy documentation according to the legal framework and manage the process to obtain a crypto license in Estonia from the FIU on basis of a Power of Attorney (PoA).

Documentation

For review and preparation of the licensing project we will ask for the following documentation:

  • Valid copy of passport from each country of citizenship
  • Power of Attorney (PoA)
  • Detailed business plan and financial forecasts
  • Resume (CV) listing employment and education background for all participants
  • Website address where services will be offered 
  • Non-criminal certificate from the registry of convictions (not older than 3 months) for shareholder(s), board member(s), ultimate beneficiary owner(s)  *

All listed documentation has to be certified by notary public and confirmed with an apostille, in English (or sworn English translation). In the first stage we will gather all information and provide step by step process overview according to your case.

Procedures

Our compliance team will prepare the full internal procedures documentation for the company to meet with the Anti Money Laundering (AML) and Know Your Customer (KYC) criteria established in the legal framework. Some parts of this include, for example:

Internal security measures
  • assessment and management of the risk of money laundering and terrorist financing;
  • collection and keeping of records;
  • performance of the notification obligation and notification of the management;
  • internal control rules for checking adherence thereto.
Rules of procedure
  • describing transactions of a lower risk level and establishing the appropriate requirements and procedure for carrying out such transactions;
  • describing transactions of a higher risk level, including risks arising from means of communication, computer network and other technological development, and establishing the appropriate requirements and procedures for carrying out and monitoring such transactions;
  • set out the rules of taking the due diligence measures;
  • set out the requirements and procedure for keeping the documents and records;
  • set out the requirements and procedure for application;
Instructions and guidelines
How to effectively identify whether or not the person is:
  • a politically exposed person;
  • a person whose place of residence is in a country where no sufficient measures for prevention of money laundering and terrorist financing have been taken;
  • a person whose activities there is prior suspicion that the person may be involved in money laundering or terrorist financing;
  • a person with regard to whom international sanctions are imposed;
  • a person with whom a transaction is carried out using telecommunications.

The Polish AML law (03.11.2021) can be viewed here.
The English translation (not up to date with latest changes, dated 09.07.2020) can be viewed here.
The Virtual Currency Activity Register (held by the Chamber of Tax Administration Office in Katowice) can be viewed here.

Compliance officer

The standard duties of a Compliance Officer (CO) include, inter alia:

  • organisation of the collection and analysis of information referring to unusual transactions or transactions or circumstances suspected of money laundering or terrorist financing, which have become evident in the activities of the obliged entity;
  • reporting to the GIFI in the event of suspicion of money laundering or terrorist financing;
  • periodic submission of written statements on compliance with the requirements;
  • performance of other duties and obligations related to compliance with the requirements.

The overall requirements for a Compliance Officer (CO) include:

  • the person must have the education, professional suitability, the abilities, impeccable reputation and experience required for performance of the duties;
  • the company must organize specialized training on money laundering and/or terrorist financing prevention measures for their employees, especially those who work directly with customers and their transactions.

Revocation

The Estonian Money Laundering and Terrorist Financing Prevention Act sets forward cases in which the crypto license can be revoked. Mainly, § 75. Revocation of authorisation instructs as following: in addition to the grounds provided for in subsection 1 of § 37 of the General Part of the Economic Activities Code Act, the Financial Intelligence Unit (FIU) will revoke authorisation specified in subsection 1 of § 70 of this Act where:

  1. the Financial Supervision Authority has granted authorisation to the undertaking;
  2. the undertaking repeatedly fails to follow the precepts of the supervisory authority;
  3. the undertaking has not commenced operation in the requested field of activity within six months from the issue of the authorisation.

Contact us for more information

We can provide a step by step overview with timeframes and budget break-down after gathering the preliminary project information. Our track-record in setting up the crypto license in Estonia for our clients is backed by hundreds of licenses issued as we follow a thorough checklist to confirm that all legal requirements are met. Please contact us through the contact form below and we will get back to you with further information.

    Contact details

    Please contact us to be connected with our crypto projects manager or to schedule a meeting.

    Call our head office at +372.50.43.245

    E-mail us at info@maxcorp.eu

    Tornimäe 5, Tallinn 10145, Estonia