Estonia ranks among Europe’s top countries for issuing cryptocurrency licenses, offering a streamlined regulatory framework for virtual asset service providers (VASPs). The Financial Intelligence Unit (FIU) oversees licensing under the Money Laundering and Terrorist Financing Prevention Act, consolidating services like wallet management and exchange operations into a single license.
Types of Cryptocurrency Licenses in Estonia
Estonia’s regulatory framework covers:
– Cryptocurrency Exchange License: Facilitates crypto-to-fiat and crypto-to-crypto exchanges.
– Cryptocurrency Wallet License: Enables secure storage and transfer of digital assets (cold/hot wallets).
Previously split into two licenses (pre-2020), Estonia now issues a unified Virtual Currency Service Provider License.
Cost of Obtaining a Cryptocurrency License
| Package | Price |
|---|---|
| Estonian Company + Cryptocurrency License | €29,900 |
Inclusions:
- Company registration in Estonia.
- Business model review and structure optimization.
- Assistance with股本出资 (capital deposit).
- Bank account opening support.
- Office leasing guidance in Estonia.
- AML/KYC policy drafting and risk assessment.
- State fee for the cryptocurrency license.
- Two-year business plan development.
- Director/AML officer recruitment support.
- Legal documentation preparation.
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Key Regulatory Requirements
| Aspect | Requirement |
|---|---|
| Application Fee | €10,000 |
| Processing Time | Up to 60 days |
| Minimum Capital | €100,000 (exchange) / €250,000 (transfer services) |
| Corporate Tax | 0% on retained earnings |
| Local Office | Mandatory |
| Audit | Annual financial audit required |
Recent Updates (2024):
– Increased capital requirements (€100,000–€350,000).
– Mandatory segregation of AML officers from management.
– Enhanced IT security protocols for client funds.
Application Process
- Company Incorporation: Register an Estonian entity.
- Document Submission: Provide:
- Business contact details, resumes of key personnel.
- Proof of physical office and IT infrastructure.
- AML/CFT compliance policies.
- Criminal record checks for stakeholders.
- FIU Review: Approval within 60 business days.
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Benefits of an Estonian Cryptocurrency License
- Tax Efficiency: 0% corporate tax on undistributed profits.
- EU Market Access: Operate across the European Economic Area (EEA).
- Reputation: Estonia’s progressive fintech ecosystem enhances credibility.
FAQs
1. What services can a licensed entity offer?
- Crypto/fiat exchanges.
- Custodial wallet services.
- Payment processing using cryptocurrencies.
2. Can non-residents apply?
Yes, but a local director and office are mandatory.
3. How long is the license valid?
Indefinitely, subject to ongoing compliance.
4. Are there restrictions on directors?
- Minimum 1 director (EEA residency preferred).
- Maximum of two board positions per director.
5. Is a bank account required?
Yes, an IBAN account (traditional bank or fintech) is mandatory.
Conclusion
Estonia’s transparent licensing process and favorable tax policies make it a prime destination for cryptocurrency businesses. Staying updated with regulatory changes, such as the upcoming Markets in Crypto-Assets (MiCA) framework, ensures long-term compliance.
Need expert guidance? Contact our legal team for tailored solutions.