Sun. Jun 23rd, 2024

If you’re an aspiring entrepreneur considering expansion into new territories, Estonia’s thriving business environment might catch your eye. Specifically, you might be curious about establishing a cryptocurrency venture in Estonia. This article will guide you through the process of obtaining a crypto license in Estonia and shed light on the compelling advantages of cryptocurrency-related companies. We’ve divided this article into two main parts: first, we’ll delve into the key benefits driving entrepreneurs to start such ventures in Estonia, and second, we’ll walk you through the essential steps for launching and, most importantly, securing an Estonian cryptocurrency license.

Advantages of Cryptocurrency Enterprises

Enhanced Confidentiality and Protection for Your Assets and Investments

For many entrepreneurs, the benefits associated with increased privacy are one of the main reasons for starting a cryptocurrency company.

Advantages Related to Taxation

It is important to note that some European Union countries consider cryptocurrencies as a financial commodity rather than a traditional currency, such as Finland or Belgium. There are also countries that often exempt cryptocurrency activities from VAT (value-added tax) or sales tax, one of which is Singapore. Establishing an offshore cryptocurrency company will reduce your tax liabilities.  If you have a desire to create a company in Estonia, you will find a favorable business environment.

Regulations and Criteria for Licensing Cryptocurrency Enterprises in Estonia

To begin with, there are two main types of licenses that can be obtained in Estonia:

  • The first is a cryptocurrency exchange service provider. An entrepreneur can provide exchange services for legal entities and individuals who exchange cryptocurrency for various forms of value.
  • The second is a cryptocurrency wallet service provider license. It is intended for businesses that offer virtual token wallets or electronic wallets for storing assets.
  • To summarize, determining which license is best for your business is the first step.

It is worth noting the exceptions to the licensing rules. For example, information technology (IT) companies whose activities include bitcoin mining are exempt from the need for a license.

Procedure for Acquiring a Cryptocurrency License in Estonia

Collect Documents: Gather required paperwork, including your company’s incorporation certificate and KYC documentation.

Apply: Submit your application to the Financial Supervisory Authority through Estonia’s Financial Intelligence Unit.

Stay Updated: Keep an eye on regulatory changes, as Estonia may tighten rules for crypto businesses.

Local Presence: Ensure to hire local staff and set up an office or a representation in Estonia. It’s also essential to contribute the required share capital.

Address New Requirements: Be prepared for enhanced assessments, stricter checks, and local presence criteria.

Budget Accordingly: Higher application fees (345 EUR to 3,300 EUR) and longer processing times may increase costs.

Maintain Compliance: After obtaining the license, ensure ongoing adherence to governmental regulations and provide any requested information.

Limit Activities: Avoid engaging in cryptocurrency-related activities until the license is granted.

Why You Can Rely on the Prifinanсe Team

At Prifinance, our legal experts are prepared to evaluate your situation and identify the best choices for your enterprise, encompassing cryptocurrency licensing and ensuring comprehensive adherence to relevant regulations. Share the specifics of your business scenario and commercial goals to pinpoint the jurisdiction that aligns perfectly with your needs.

By Manali