Estonia is a welcoming and advantageous nation for a range of operations involving virtual currencies. Its progressive laws have helped the nation become known as a “cryptocurrency haven” in a comparatively short time.

Consequently, over 2,000 companies have obtained cryptocurrency licenses. Numerous business owners, exchanges, and exchangers have established physical offices throughout the nation in the past five years. Continue reading for more on how to obtain a crypto license in Estonia.

Reasons to get an Estonian crypto license

Getting a cryptocurrency license in Estonia has the following advantages:

Reduced tax rate

Compared to other EU nations, Estonia offers the most economical and lowest rates for bitcoin licenses. The 0% corporate income tax is a glaring illustration of low taxation. As a result, these earnings can be used to fund the company’s growth. This is perfect for a startup.

It shields the business from accusations of money laundering

Estonian AML laws govern crypto licenses on an equal footing with financial institutions. Therefore, a company that satisfies all the requirements for this license will be shielded from various checks for suspicions of money laundering and potential company closure.

Online business administration

Estonia is renowned for being at the forefront of Internet technology. This has been advancing rapidly in recent years. Access to all government services is now available due to this accomplishment. This also saves you time and facilitates interactions with government agencies.

Requirements for obtaining the license

The Committee on Financial Monitoring (CFM) issues crypto licenses in Estonia. The application process takes 60 days. However, this might take up to 120 days. A business needs to fulfill several prerequisites, such as:

Registering a company

The business must be listed in the Estonian e-Business Register.

Share capital

The business needs to have at least EUR 12,000 in fully paid-up shares. The minimum requirement for digital currency exchange services is EUR 100,000. On the other hand, the minimum requirement for digital currency transfer services is EUR 250,000.

Business plan

The organization must have a thorough business plan. It should cover strategy, risk management, assets, services, and financial predictions.

Local Office

The business needs to establish a physical office in Estonia.

Beneficial owners and management staff

The business is required to disclose information regarding beneficial owners and management staff.

Residency

Every member of the board needs to be a resident of Estonia.

Criminal history

Each employee must have a clean criminal history certificate from the company.

Anti-money laundering policies

The business must have AML/KYC policies that adhere to the Money Laundering and Terrorism Financing Prevention Act.

Cryptocurrency businesses are given financial institution (FI) status after registration. A new law has merged multiple license categories into one known as “Virtual Asset Service Provider.” This includes the following categories of cryptocurrency-related activities:

Currency exchange: This gives the company the ability to convert cryptocurrencies into cryptocurrency. Or digital currency into FIAT or vice versa for a fee.
Custodial and cryptocurrency wallet services: This includes maintaining cold and online wallets for storing cryptocurrencies. It also involves creating and storing encrypted client keys and more.