Features of obtaining a crypto license in Estonia

Today, only a few countries in the EU issue work permits to crypto organizations. It is mainly because only some have been able to develop a strategy for regulating this vast industry. Estonia crypto license is a good solution for any organization that wants to work honestly and openly, not have problems with the law, and strives to develop normally.

Interest in crypto assets continues to grow, especially in European countries. New organizations regularly appear that strive to work honestly and legally, actively develop and make big profits. Crypto regulations in Estonia welcome the development of the crypto business; therefore, it establishes simple taxation rules and does not set complex requirements for applicants.

Key points

Every crypto organization that wants to operate on the territory of this country must pass a government check and obtain a work permit. If it refuses this idea, the firm will automatically be recognized as a fraudster, which means the platform will be blocked, and the owner may have severe problems with the law. The work permit here is indefinite, but the organization must regularly provide reports on its activities. If government authorities notice errors or suspect you of fraud, money laundering, or financial terrorism, they may revoke your license. Previously, this jurisdiction offered to obtain 2 types of licenses – for a wallet and organizations providing custodial services and for exchanges. However, it was decided to simplify this process, and a single crypto license was introduced. The total time for obtaining a document takes approximately 3 months if you think through all aspects of your work in advance.

Can you buy/sell cryptocurrency in Estonia?

Yes, you can easily buy and sell any crypto assets and use them at your discretion; for example, pay for goods and services and engage in trading or mining. At the same time, if you want to establish an organization that will earn on crypto assets, then you need to obtain a work permit. All companies that refuse to do this will be recognized as fraudsters, which means that the platform will be blocked, and the owner will have big problems with the law.

Is cryptocurrency legal in Estonia?

Yes, cryptocurrencies are entirely legal in this jurisdiction. Here they have perceived more as goods rather than electronic money. However, if both transaction members agree, you can use this to pay for goods and services. Anti-money laundering laws mainly regulate the crypto industry in this country. So, you must ensure that neither your customers nor employees use your platform for money laundering, fraud, or money laundering.

Cryptocurrency tax in Estonia

This country has pretty simple taxation rules. All organizations must pay an income tax of 20%, slightly more than in other jurisdictions. However, you can reinvest profits tax-free. You also need to pay the social tax on staff at 3%.

If you find it challenging to understand the terms of taxation, you should contact our specialists. They will conduct a full consultation and respond to possible requests, as well as tell you how this jurisdiction suits you, given the characteristics of your organization.

What activities require a crypto permit?

If you are going to develop cryptocurrency in Estonia, you need to get a work permit. Licensing covers organizations that earn on the storage of crypto assets and the exchange (fiat for crypto, crypto for crypto, crypto for other electronic money). Previously, in this jurisdiction, you were offered to obtain 2 licenses for wallets and exchanges separately. However, it was decided to combine them into a single crypto license. It simplifies the work of regulators.

Crypto Regulations

Each jurisdiction sets its requirements for organizations that seek to obtain a work permit. They are a little more complicated in Estonia than in Lithuania or Poland; however, if you are willing to work honestly and openly, there will be no problems. Among the essential requirements are the following:
  • Thoughtful business plan;
  • The authorized capital of at least 100 thousand euros;
  • Compliance with anti-money laundering requirements;
  • Local office and staff.
Particular attention should be paid to the selection of local workers.

The director and anti-money laundering specialist must have local citizenship, specialized education, experience in a relevant position, and an excellent reputation. They must not have a criminal record or other legal problems in the past. Your business plan must be designed for at least 2 years. Here, special attention should be paid to risk assessment and the fight against money laundering. You also need to pay attention to funding issues, the services you want to provide, and other aspects. When reviewing your business plan, the examiner should understand that you understand how your organization will function and that you understand all the risks. Particular attention should be paid to the fight against money laundering. You cannot provide anonymous transactions. You must verify your clients and store transaction documents. If you notice suspicious activity, you should report it to government authorities.

The cost of an Estonian cryptocurrency license

The cost of a crypto exchange license depends on many factors – you need to create an authorized capital and pay state fees and legal services. You can give a turnkey license or do necessary work, saving you some money.

Cryptocurrency Licensing Process in Estonia

To get a crypto license in Estonia, you must follow some critical steps.

Obtaining the title of e-resident

Only citizens of this country or e-residents can open a business in this jurisdiction. The government of this country welcomes the development of the IT industry; therefore, it provides an opportunity to open a business here to everyone ready to receive e-resident status.

Organization name reservation

Estonia’s cryptocurrency regulation requires all entities to have a unique name. Choose several names in advance, check them for uniqueness, and reserve the name that appears to you more than the others.

Preparation of papers and registration of a company in this jurisdiction

At this stage it is necessary to determine whether your organization meets the requirements of state authorities, and to collect the necessary documents and register the organization in this jurisdiction. Please involve our lawyers at this stage, who will help you to draw up all the documents correctly and check whether your company is ready to receive a license. Usually this stage takes about two weeks. You do not need to fly to that country to register your company, everything can be done remotely. This stage is quite complicated and extremely important, as the decision of state bodies on granting you a licence will depend on it.

Registration of a taxpayer

All organizations operating in this country’s territory are required to pay taxes. After registering a company, you must apply to the Tax and Customs Board to register as a new taxpayer.

 Finding an office and qualified workers

In Estonia crypto businesses must have their own local office, where the director and anti-money laundering specialist will work, and you will keep documents on the organization’s functioning. The selection of specialists is incredibly complex, as you need to consider government regulators’ requirements and applicants’ personal qualities.

Bank account opening

Your organization must have a bank account where you must keep all corporate capital. At this stage, you may have problems, as local banks consider the crypto business too risky. It will be a good solution if you contact foreign banks operating on this country’s territory. In general, obtaining licenses takes approximately 14 weeks. At all times, you need to regularly cooperate with lawyers who will advise you on how to make getting a work permit easier.

Obtaining a license

Before you apply to obtain a cryptolicense, you must ensure that your company meets all the requirements of government regulators. You also need to collect the necessary package of documents.

If you do not have a legal education, it will be challenging to cope with this stage. You should contact our specialists, who will help you collect the necessary package of papers, fill out the application correctly and check how your organization meets all the requirements.

Personal interview

You do not need to come to this country for an interview personally. Your authorized representatives can do it for you. Your organization must have a local director and security specialist. They can represent you in government agencies during the interview.

crypto license in Estonia

Requirements for Estonian crypto companies in 2022-2023

Your company must meet specific needs if you want a crypto currency exchange license. It is worth saying that government agencies are striving to prevent fraud and money laundering, so they have tightened the rules a little.

 

Among the essential requirements are the following:
  • The authorized capital of at least 100 thousand euros;
  • Verification of clients and storage of information about all transactions;
  • Thoughtful business plan for at least 2 years;
  • You must undergo a full audit once a year;
  • Location requirements are the office’s location and the staff’s nationality.
Anyone can open a business in this country, but the director and security specialist must have citizenship in this jurisdiction. In addition, you need an office in that country where all the necessary documentation and information about transactions will be stored. In addition, the fees increased from 3,300 to 10,000 euros. Your organization must respect the AML policy, which must verify each user. They must provide you with documents proving your identity and place of residence. You must keep all information about transactions, and if you notice suspicious activity, you must contact government authorities. You also need to pay special attention to selecting key team members. They must have local citizenship, good qualifications, work experience in the relevant position for at least a year, and specialized education. Our specialists will help you set up an office, recruit employees, and check how well you are implementing the AML policy.

Benefits of obtaining a crypto license in Estonia

It would be best if you got a work permit to make money with Estonian cryptocurrency. This jurisdiction has many advantages, among the most important are:

  • Low requirements for applicants;
  • Lack of corruption and redundant bureaucracy;
  • Favorable taxation;
  • The excellent investment climate for IT companies.

The government of this country is interested in the development of IT business. Therefore it creates perfect conditions for this. Obtaining a cryptolicense in this jurisdiction will make it easier for you to attract investments and new clients. It is worth noting that this country is part of the EU, so you may not work successfully throughout the union.

 Conclusion

This country is a kind of oasis for the crypto world because favorable conditions have been created here to develop such a business. Obtaining a license here is a little more complicated than in Lithuania or Poland, but taxation and regulation are more beneficial. If you want to get a work permit easily and quickly, it makes sense to turn to our company’s professionals for help. They will take care of all the paperwork, check how your organization meets all the requirements, and help you find good staff.

FAQ

Yes, this jurisdiction issues a license allowing you to work in this country and throughout the EU.

To obtain a work permit, you need to go through several stages – register a company in this country, select the required package of documents, apply for a license and open a bank account.

It takes approximately 14 weeks to obtain a work permit in this jurisdiction if you plan your organization to comply with the requirements of state regulators.

In this jurisdiction, the permit is perpetual, but you can lose it if you stop complying with government regulations.

There are several reasons why you should choose this particular jurisdiction. There is favorable taxation here (corporate tax is higher than in other countries, then there is no tax on dividends, VAT, and additional fees). There is no corruption and unnecessary bureaucracy here, and it is easier to get a work permit here than in many other countries. Low reporting requirements, if you are ready to work honestly and openly, there will be no problems.