Acquire a cryptocurrency license in Estonia: process description and new regulations

We invite you to consider the opportunity to acquire a cryptocurrency license in Estonia for a company domiciled in the country. The regulations have been changed recently and some requirements have become a bit stricter but Estonia remains one of the most attractive countries where you can acquire a cryptocurrency license anyway.  

Crypto license in Estonia

Why should you apply for a cryptocurrency license in Estonia?

Estonia offers attractive conditions for acquiring a single license for cryptocurrency exchange and electronic wallets.

As an EU member, Estonia grants an EU cryptocurrency license that allows working in other European states without having to apply for licenses there. This is probably the main advantage of acquiring a cryptocurrency license in Estonia.

New AML (anti-money laundering) regulations came into force in the country on March 10, 2020. All existing companies have to introduce the necessary changes onto their operations in order to comply with the new requirements.

In addition to that, since the date indicated above, a single license – Virtual Currency Provider – is used instead of the two licenses that were used before (the electronic wallet license and the virtual currency exchange license).

The license holder is entitled to provide the following subclasses of services:

Electronic wallets;

Crypto exchanges;

Crypto payment system;

Alternative payment system;

Wholesale purchase of precious stones, metals, and jewelry.

The main requirements that an Estonian-based company has to satisfy when applying for a cryptocurrency license in Estonia:

  • Minimal required charter capital — 12,000 euros;
  • A physical office and a registered legal address in Estonia;
  • Estonian manager(s);
  • Clean criminal records for the company founders;
  • A CV for each company founder;
  • A bank account or an account with a neobank or a Fintech company located in the EEA.

Below please find a systematic guide to establishing a company in Estonia that can apply for a cryptocurrency license in the country.

Selecting the company managers

To begin with, you have to take care of hiring local managers for your company. As the company CEO has to be a legal resident of Estonia, you have two options to choose from: first, you can hire a local person (we can help with that). Second, you can acquire an Estonian residence permit (as the company director you will qualify for a working visa in the country and we can help with that too). The company CEO does not have to permanently reside in Estonia but he or she does have to have a legal status in the country and be registered with the Financial Intelligence Unit (FIU).

In addition to that, the company has to have an AML officer who will be responsible for the AML procedures that the company will have to conduct and the interaction with the FIU officers. The candidate for this position shall have a university degree in finance, economy, or law, and he or she shall have relevant professional experience, appropriate personal traits, and a spotless reputation.

Appointment of the AML officer has to be approved by the FIU. Theoretically, the company director can act as the AML officer but this is undesirable due to the possible conflict of interests. The AML officer does not have to reside in Estonia. Hiring personnel for your future company may be a rather long process, as you cannot hire anybody. We can suggest several specialists who can perform the duties of the AML officer in your future company in Estonia.

Company founders personal documents

First, you will have to supply notarized passport copies for all company founders. Besides, the Estonian legislation requires that the owner of the company applying for a cryptocurrency license in the country should have a clean criminal record. The criminal record has to be obtained from the police authorities in your home country. As in some countries (such as the USA, for example) this is impossible to do, there is an opportunity to make a solemn oath in the presence of a notary public in Estonia and swear that you have a clean criminal record.

The apostilled documents shall be scanned and converted into the electronic form, as they have to be sent by email.

Diplomas and résumés

All company top managers have to supply their résumés and preferably university diplomas as well. It would be beneficial if the diploma were in English. If you do not have a university degree, a high school graduation certificate will do. In this case, your résumé had better reflect relevant experience that you have in the cryptocurrency business.  

How to register a company in Estonia

There are two ways to register a company in Estonia. First, you can acquire electronic residency in the country (e-residency) and this will make you qualified for setting up a company there. Second, you can register a company with the help of a notary public.

You do not have to visit Estonia in either case. This first option clearly allows registering a company there remotely and as far as the second option is concerned, you can issue a Power of Attorney and send it to Estonia with a courier. InternationalWealth portal partners in the country will register a company on your behalf there.

Registering a company in Estonia with an e-residency card 

You can file an online application for an e-residency card if you log onto the official website. The price is 100 euros. Normally, the application processing takes four to six weeks but due to the current situation, it may take longer.

If you would like to have a complete guide on acquiring the Estonian e-residency card, please contact InternationalWealth experts. We will gladly help you with this task too.

The e-residency card is valid for five months. If you want to pick it up, you will have to visit Estonia as your fingerprints will have to be taken.

With an e-residency card, you can register a limited liability company via the electronic business register. The registration fee is 190 euros in Estonia and the time that the procedure requires is one to five working days.

Registering a company in Estonia via a notary public

A Power of Attorney allows registering a company in Estonia via a notary public. The process takes between two and three weeks but much will depend on how soon you can collect all the required documents and send them to Estonia.

In addition to issuing a Power of Attorney, you will have to make copies of all passport pages, sign them, have them legalized, and then send them to Estonia with a courier. One person is enough to set up a company in the country, as the owner can simultaneously be the company director. No company secretary needs to be hired. Please mind that the information about company beneficiaries is made public in Estonia.

When company profits are distributed in the form of dividends, they are taxable at 20% in the country. If the profit is reinvested into the company, no tax is due.

InternationalWealth experts will be happy to provide legal support in registering a company in Estonia with the purpose of acquiring a cryptocurrency license there. The procedure can be carried out remotely. Please apply for a free consultation to find out the details.  

Opening a bank account in the EU

After registering a company in Estonia, you will have to set up a corporate bank account. It does not necessarily have to be an account with a traditional bank though. You can use the services of a European Fintech company that can open an account with an IBAN for you. Not all such companies can do so but an IBAN is required for obtaining a cryptocurrency license in Estonia.

At the same time, such companies as Transferwise and Revolut, for example, will suit your purposes very well. Opening an account with one of them is simpler than setting one up in a traditional bank.

The banking arrangements are the most complicated part of the process of launching a cryptocurrency company in Estonia. First, you will have to set up a corporate account for your own company. Then you will have to arrange for the deposits of you future clients. InternationalWealth experts will gladly help you with opening a bank account in the EU and acquiring a cryptocurrency license in Estonia.

Office rent in Estonia

In order to qualify for a cryptocurrency license your Estonian-based company will have to have an office in the country. You have to realize that not only a registered legal address is required for that but a physical office too. A virtual office or one rented for a couple of hours will not be enough.

The point is that the company has to have real presence in Estonia to be eligible for a cryptocurrency license. It has to have local employees and local office space as well. Office rent is not overly expensive in Estonia. However, you should be prepared to pay around 500 euros per month for an office that you rent in Estonia. We will gladly help you find an optimal office in the country for your cryptocurrency company.

How the recent changes have affected existing crypto companies in Estonia

One of the new requirements is an increased charter capital that such companies have to have. As it has been set at 12,000 euros, the existing companies have had to make additional deposits to their banks indicating ‘contribution to the charter capital’ as the payment purpose. They have not had to issue additional ownership shares though.  

In addition to that, crypto companies in Estonia have to adapt their AML procedures to the new regulations (they still have time to do so). The regulations have become tougher, which means some effort and probably some expenses on the part of Estonian crypto companies are required.

Submitting an application for a cryptocurrency license in Estonia

When your company in Estonia has been set up and a corporate bank account opened, it is time to apply for a cryptocurrency license. You are welcome to authorize us to do it on your behalf. 

From March 10, 2020, the FIU accepts only digital documents so you will have to make scans. The cost of the cryptocurrency license in Estonia is 3,300 euros. You have to add to this sum the costs of the registration agent services and those of the notary public.

One cryptocurrency license will suffice to be able to provide cryptocurrency exchange services and electronic wallet services. 

Documents required for acquiring a cryptocurrency license in Estonia

  • Company owner’s passport copy;
  • A notarized and apostilled Powers of Attorney authorizing our Estonian partners to perform the required actions on your behalf;
  • A business plan and business model description;
  • A résumé for each company founder;
  • The company website address; 
  • Police clearances for company owners and directors (less than three months old).

The documents have to be made in English. If they are written in another language, translations have to be submitted, notarized and apostilled.

Issuance of the cryptocurrency license in Estonia

The application processing timeframe is 60 days, in accordance with the legislation. However, the FIU can extend the time of application processing to 120 days if such a decision is warranted. While your application is being processed, you may be asked to supply some additional documents.

It has to be admitted that the process of acquiring a cryptocurrency license in Estonia is neither fast nor simple. But this is the case with any license, to say the truth.

Previously, acquiring a cryptocurrency license was easier in Estonia than in any other country of the world. The simplicity of the process attracted many crypto companies to Estonia. This contributed to the development of the local economy without doubt but because obtaining a cryptocurrency license in Estonia was so easy, the license was not considered valuable enough.

Now the requirements have been toughened but we do not believe that this should be regarded as a disadvantage. The customers who use licensed products have to be sure that the authorities control the license holder in an efficient way. This makes them put more trust in the licensed products that they are buying.

Even though it is neither simple nor cheap to start a crypto company in Estonia, it is still quite possible and the business perspectives are great. Our experts will be happy to consult you on the matter and assist you in all stages of setting up a company in Estonia and acquiring a cryptocurrency license there. Please write to info@offshore-pro.info or the live chat or use the telephone numbers to send us a WhatsApp message. We always reply fast!

How long does it take to obtain a cryptocurrency license in Estonia?

The time allocated for the application processing is 60 days. However, it can be extended to 120 days in some cases. The extension is usually applied when additional information about the applicant is required.

What are the main requirements to an Estonian-based crypto company in 2021?

The main requirements that you company has to meet in order to qualify for a cryptocurrency license are as follows:
Minimum required charter capital — 12,000 euros; Estonian personnel; physical office and registered legal address in Estonia; clean criminal records for company owners and managers; their CVs; an account with a bank or an electronic payment system located in EEA.

Why should I apply for a cryptocurrency license in Estonia?

Estonia offers beneficial conditions for starting a cryptocurrency business there. As the country is an EU member, the company registered there can do crypto business in any European country without having to apply for new licenses.

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