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Overview
Estonia is a key hub for crypto businesses due to its progressive regulatory framework. The Estonian Financial Intelligence Unit (FIU) requires crypto exchanges and wallet providers to obtain a Virtual Currency Service Provider license, ensuring compliance with KYC, AML, and cybersecurity standards. This structure provides stability and confidence for investors and businesses. Estonia’s efficient application process and digital infrastructure attract crypto enterprises. The e-residency program allows global entrepreneurs to manage EU-based companies online. Clear and adaptable regulations keep pace with market changes, enhancing Estonia’s appeal as a leading jurisdiction for crypto operations.
Timeframe: 6 – 8 months
Minimum paid up capital: The minimum share capital required for a Virtual Asset Service Provider (VASP) license is EUR 250,000.
Overview
Estonia is known as a “cryptocurrency haven” due to its progressive legislation and favorable environment for virtual currency activities. As the first EU country to regulate cryptocurrency companies, Estonia has attracted over 2,000 licensed crypto businesses. Entrepreneurs often choose Estonia for ICOs, IEOs, and IDOs, taking advantage of its clear legal framework, attractive tax policies, and cost-effective licensing. Despite stringent regulations introduced in 2021, Estonia remains a top choice for crypto businesses, offering a secure and transparent operating environment comparable to fiat currency regulations.
Comprehensive Guide to Company Incorporation
General information
Company structure
- ▪At least one shareholder is required, who can be an individual or a corporate entity.
- ▪A minimum of one local director is required. The director must be a resident of Estonia.
Confidentiality
- ▪Beneficial owners’ details – disclosed to the Authorities
- ▪Shareholders’ details – part of public record
- ▪Directors’ details – part of public record
Taxation
Estonia offers a favorable tax regime with no tax on reinvested profits. Corporate tax is 20% on distributed profits only.
Accounting requirements
- ▪Filing annual report is obligatory
Secretary – Required
Registered office – A physical office in Estonia is mandatory. This ensures compliance with local regulatory requirements and facilitates business operations.
The application process for a crypto license involves several steps:
- ▪Company Registration: Register the company with the Estonian Commercial Register. This involves providing a preferred company name, business model, and initial documents.
- ▪Pre-Licensing Preparation: Develop and submit AML/KYC policies, a business plan, and other necessary documents. Hire an AML officer and secure a physical office.
- ▪Application Submission: Submit the application to the Financial Intelligence Unit (FIU), including all required documentation. The process may take approximately 5 months.
- ▪Approval: After the review, if all criteria are met, the license will be granted.
Key documents required for the application include:
- ▪Company Charter and Articles of Association
- ▪Proof of Identity for Directors and Shareholders
- ▪AML/KYC Policies
- ▪Business Plan and Financial Projections
- ▪Proof of Local Office and Lease Agreement
- ▪Certificates of No Criminal Record for Key Personnel