Cryptocurrency license in Estonia | Law&Trust International

Acquisition of cryptocurrency license in Estonia

In 2017 Estonian government set course for digitalization of economy and started creating favourable climate for the development of fin-tech companies and start-ups. One of the outcomes of this policy was adoption of the amended version of Anti-Money Laundering Act, where the terms “virtual currencies” (cryptocurrencies fall under this category) and “electronic cash-box” were introduced. The main legislative innovation was the establishment of a special permission (a license) which allows to perform cryptocurrency exchange, including exchange for traditional or fiat money.

According to paragraph 2 and 70 of the Act, operations for “provision of services for cryptocurrency exchange for fiat money” and “provision of services of electronic cash-boxes for virtual currencies storage” require licensing at the Estonian Financial Intelligence Unit.

In conclusion we can highlight the following Estonian cryptocurrency exchange license advantages:

  • Relative simplicity in comparison with other jurisdictions (for example, with MSB/Money Transmitter License in the USA)
  • Minimum terms of the license procurement (decisions of the competent state authorities are made within 30 days);
  • Relatively low cost of obtaining the cryptocurrency license in Estonia;
  • No stiff requirements for the authorised capital of the company;
  • Progressive tax rate in Estonia (In Estonia there is no profit tax. Bitcoins and altcoins are not subject to VAT. This means that monies received are not taxed for profit until dividends are allocated, which allows to conduct reinvestment permanently and without losses.).

The Process Of Obtaining Estonian Crypto Exchange License

The process of getting Estonian cryptocurrency license may be conditionally divided into 3 stages:

Stages:

  • Registration of a company within the jurisdiction (N.B. Registration may be conducted during the process of collecting and preparing the documents. In this case it will be required to provide the Articles of Incorporation at the moment of the submission of the documents). Generally, among variety of institutional and legal forms the OÜ is the most frequently chosen (the equivalent of Russian Limited Liability Partnership, as all members of this organisation are liable only in the amount of their investments in the authorised capital.)

  • Collection of documents. This stage is the most important and requires full expertise of a lawyer. It will be required to collect and provide the following documents:

    • Forms for obtaining cryptocurrency license in Estonia ;
    • The internal monitoring rules. It is a document which confirms that your company complies with the strict AML-requirements of Estonian legislation. These rules include the following:
      • The procedure for carrying out due diligence (the complex procedure of risk-assessment) of clients, and business activities that these clients conduct.
      • The model of risk identification and management;
      • Methodologies and instructions for revealing suspicious transactions;
    • Police clearance certificates of director, procurator and beneficiary;
    • To appoint an AML compliance-officer (an officer who is in charge of the company`s compliance with the requirements of AML legislation and who exercises duties stipulated in the Act). Please note, that AML officer shall be real, employed in the company and be capable of performing his duties;
    • Passport data and other information about the members of the company;
    • Contact information.
  • Payment of the state fees, submission of the documents for Estonian cryptocurrency exchange license.
    The last stage of obtaining Estonian crypto exchange license is legalization or translation of the documents and filing them with the FIU.
    The FIU typically reviews the application for up to 30 days.
    Once you have successfully passed all the stages and received the license, you have the right to perform cryptocurrentcy exchange (including exchange for fiat money) in Estonia.

How to Expedite the Process of Getting Estonian Cryptocurrency Exchange License?

To accelerate the process of obtaining cryptocurrency license in Estonia  we recommend to get an e-residence card that may significantly simplify the process of communication with the state authorities, accelerate the process of obtaining licenses/permissions and so on.

For full information you can visit the relevant section of our website.

“Law & Trust” lawyers have essential practical experience and may help you to implement your project. With us the process of acquiring the license for cryptocurrency exchange will be passed within a reasonable time and at an affordable price.

The term for obtaining the license is up to 2 months.

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