Estonia cryptocurrency license
Tetra Consultants assists our international clients to secure Estonia cryptocurrency license. Estonia is a popular jurisdiction for investors looking to set up cryptocurrency business. The country is friendlier with less regulations as compared to other crypto-friendly jurisdiction such as Malta or Gibraltar. Over the past 12 months, the Estonian government has approved more than 900 cryptocurrency licenses.
On 19th December 2019, Estonia Financial Intelligence Unit (FIU) confirmed multiple changes to its existing Estonia cryptocurrency license regulations. The changes are applicable to both existing license-holders as well as new applicants. In addition, the changes also apply to companies that are currently holding the financial institution license.
As of 10th March 2020, all new license applicants are required to comply with the new regulations. For existing license-holders, you are required to meet the new requirements before 1st July 2020. Failure to comply will result in licenses being revoked.
In the past, there are two types of cryptocurrency licenses in Estonia –
- Estonia Cryptocurrency Wallet License – Services entailed includes the generation and storage of encrypted customer keys.
- Estonia Cryptocurrency Exchange License – Services entailed includes exchange of fiat currency for cryptocurrency or vice versa, or cryptocurrency for another cryptocurrency.
Going forward, they will be combined into one single umbrella license known as the Virtual Currency Service Provider license. Our team of experts is able to assist you to meet all additional requirements and ensure you are able to legally conduct cryptocurrency business using your Estonia entity. Contact us now to find out more.
Summary of changes
- The license is now known as “Virtual Currency Service Provider” license.
- Estonia Financial Intelligence Unit (FIU) has increased the license application review time from 30 days to 60 days, with obligation to increase up to 120 days.
- The license application fee has increased from €345 to €3,300.
- The required share capital has been increased from €2,500 to €12,000.
- Economic substance required in Estonia – physical office, local management team and compliance officer.
- Non-criminal records for all members in the company regardless of citizenship.
- Corporate bank account should be opened with a bank or PSP in an EEA country.
Virtual Currency Service Provider License
- The license allows your company to conduct cryptocurrency exchange businesses. The license covers services for exchanging between fiat money and cryptocurrency, and between different cryptocurrencies. When offering such transactions as a service for commission, it becomes an exchange service. Furthermore, most ICO oriented companies will benefit from this license for legal compliance.
- The license allows your company to carry out businesses similar to a cryptocurrency wallet. Wallets are digital offline (cold wallets) and online tools (hot wallets) based on public-key cryptography used to securely send and receive cryptocurrencies. The license covers services where the private wallet keys are created or held, while the funds belong to the user and not to the service provider.
Purchase existing shelf company with already-approved cryptocurrency license
The total estimated time frame to take over an existing Estonia company with an already-approved cryptocurrency license is 5 weeks. Thereafter, Tetra Consultants will open your corporate bank account within 4 weeks. Within 9 weeks, you can expect to begin your cryptocurrency business in Estonia.
Step 1: Approval to represent your company
- After receiving KYC documents, Tetra Consultants will provide you a Power of Attorney for signature within 2 business days.
- The Power of Attorney is required to enable Tetra Consultants to work on your behalf.
Step 2: Legislation of documents
- Afterwards, you are required to certify the documents at a public notary, followed by legislation at your local Estonian embassy.
- Once completed, please courier the document to us. This process will take approximately 2 weeks to complete.
Step 3: Transfer of Estonia company
- Once we receive the original documents, we will transfer the Estonian company to your preferred shareholders within 10 business days.
Step 4: Application for change in license holder
- Thereafter, Tetra Consultants will submit the change in license holder to the Estonia Financial Intelligence Unit (FIU). The estimated time of approval is 30 business days.
Step 5: Face-to-face interview
- In the event that Estonia FIU requires an interview with you, Tetra Consultants will send our nominee AML/CFT officer to attend the physical meeting on your behalf. You will not be required to travel to Estonia.
Step 6: Opening corporate bank account
- Upon successful transfer of Estonia company and license, Tetra Consultants will open an international crypto-friendly corporate bank account for you within 4 weeks.
How to get Estonia cryptocurrency license
The total estimated time frame to register an Estonia company and apply for cryptocurrency licenses is 10 weeks. Thereafter, Tetra Consultants will open your corporate bank account within 4 weeks. Within 14 weeks, you can expect to begin your cryptocurrency business in Estonia.
Step 1: Application for e-residency in Estonia
- To register a company in Estonia, you will need either an Estonian ID card or a e-residency card. Tetra Consultants will apply for e-residency on your company’s behalf based on the information and documents you provide to us. You will need to send us your resume, business plan, a copy of your identity document and a recent photograph that meets the requirements for a document photograph.
Step 2: Reservation of company name
- Once we have successfully applied for e-residency, Tetra Consultants will check and reserve your company name through e-Business Register in the Estonia Company Registration Portal.
Step 3: Preparation and submission of relevant documents for company incorporation
- After Tetra Consultants has reserved your company name, we will proceed with the registration of your company through the Estonian Company Registration Portal. You are required to prepare the documents required for a foreign director for incorporation of the company. This includes the application form, notarized passport copies and proof of address of individual directors and shareholders.
- Tetra Consultants will also draft the Articles of Incorporation and other relevant corporate documents, based on your business activity and corporate structure.
- If you do not have an office in Estonia, Tetra Consultants will provide you a registered address in Estonia. Tetra Consultants will register your new Estonia Limited Liability Company (LLC) within 14 days.
Step 4: Registration for VAT
- Tetra Consultants’ accounting and tax team will then proceed to register for VAT with the Tax and Customs Board. Once VAT registration is completed, the Estonian company will receive a VAT number.
Step 5: Preparation and submission of relevant documents for license application
- Tetra Consultants will provide you a Power of Attorney for signature. The Power of Attorney is required to enable Tetra Consultants to apply for cryptocurrency license on your company’s behalf.
- Tetra Consultants will then proceed with the application of your company’s cryptocurrency license. You will be required to send us documents such as passport, proof of address, CVs and non-criminal records of individual directors, shareholders, and Ultimate Beneficial Owners, as well as a copy of the certificate of incorporation, and a copy of the Memorandum and Articles of Association of corporate shareholder.
- Our team of experts will prepare the required AML/CFT procedures and company internal regulations for handling cryptocurrencies.
Step 6: Face-to-face interview
- Tetra Consultants will provide a local board member, compliance officer and office space for your company. These are qualified personnel who have experience in the industry and adequate education level. The local board member will attend the Estonia FIU on behalf of your company. As such, you are not required to travel to Estonia.
Step 7: Corporate bank account opening
- Upon successful application of cryptocurrency license, Tetra Consultants will open an international crypto-friendly corporate bank account for your company within 4 weeks.
Mandatory requirements for Estonia cryptocurrency license
The requirements to meet in order to qualify for cryptocurrency license in Estonia are minimal:
- Required share capital of €12,000
- Economic substance required in Estonia – physical office, local management team and compliance officer
- Appointment of a local AML/CFT officer
- At least one director must be an Estonian citizen
- Non-criminal records for all members in the company regardless of citizenship
- Non-criminal background confirmation of all company officers
- Corporate bank account should be opened with a bank or Electronic Money Institution (EMI) in an EEA country
Benefits of obtaining Estonia cryptocurrency license
- Estonia Financial Intelligence Unit (FIU) has in place a well-defined regulatory framework that includes regulatory reporting, strict KYC checks of board members as well as requirements for local substances. This allows cryptocurrency exchange license holders to conduct their business in a safe and regulated environment. In addition, this increases the trust from customers who know that they are trading cryptocurrencies with a regulated cryptocurrency exchange.
- Previously, there were two cryptocurrency licenses which you can apply for in Estonia. In another words, you will need to apply for Estonia cryptocurrency exchange license and Estonia crypto wallet license separately. As of 2020, your company will only need to apply for one license, the Virtual Currency Service Provider license, which encompasses almost all services related to cryptocurrency.
Favourable Business Environment
- Registering a business in Estonia is relatively convenient because you are not required to travel for the whole company registration process. Estonia company registration can be completed within 1 week and the country houses numerous incubators and accelerators and provides monetary incentives to help new start-ups in managing their businesses.
European Union (EU) Member
- Since Estonia is part of the EU, a cryptocurrency license issued in Estonia can be applied to other states in the EU. You will not need to apply for another cryptocurrency license if you are operating in the EU. Hence, a crypto license in Estonia provides you with access to the large EU market.
How we can help you register new Estonia company and apply for cryptocurrency license
Tetra Consultants has more than a decade of experience in advising our global clients on securing cryptocurrency license in Estonia. Our team of experts will manage your cryptocurrency license application from the start to the end, including incorporation of a new Estonian company, opening of corporate bank account, drafting the legal documents required and securing the cryptocurrency licenses from Estonia FIU.
Contact us now for a free consultation. Our team of experts will revert within the next 24 hours.