Changes in the Estonian cryptocurrency operations licensing system 2020
The Estonian territory has created favourable conditions for the development of the cryptocurrency business. The country's stable and progressive economy is combined with one of the lowest levels of state fees and duties in the EU. In order to obtain a cryptocurrency license in Estonia 2020, an organisation has to ensure its actual presence in the country and comply with a number of requirements laid out in legislation.
Benefits of doing cryptocurrency business in Estonia
- Developed network of ATMs, exchange offices and virtual exchanges for Bitcoin;
- Income from these activities is tax-free until it is recognized as a dividend;
- High-speed internet connection throughout the country;
- Availability and accessibility of communication between cryptocurrency regulatory bodies;
- Simplified procedure for entrepreneurs to obtain resident status;
- Low cost and tight deadlines for processing permit documents;
- Changes in the legislation regulating cryptocurrency operations.
Previously, there were two types of encryption licenses in Estonia: "virtual currency to fiat currency exchange service provider" and "virtual currency wallet service provider". Now, according to the draft law that entered into force on 10 March 2020, there is a single "virtual currency service provider license" for all digital currency transactions.
The requirements of the new license have become stricter and fully comply with the Money Laundering Prevention and Financing of Illegal Activities Act (MLTFPA). Holders of old-style permits have 3.5 months to bring firm documents in line with the new legislation.
The new Estonian Cryptocurrency License is issued by the Estonian Financial Intelligence Unit (FIU) and requires compliance with a number of stringent requirements.
Terms and conditions for obtaining a new type of cryptocurrency license in Estonia
- Payment of the state duty of 3,300 euros;
- Management of the company by a body actually present in the country;
- The share capital of the company lower than €12,000;
- The company has a current account with a bank and payment system registered in Estonia;
- Operating in strict compliance with AML/CFT (Anti-Terrorist Financing and Money Laundering) rules.
The package of documents for issuing a digital currency transaction permit includes a written application for a license, a copy of the company's articles of association, a professionally prepared business plan, documents confirming payment of the share capital, registration of participants/shareholders, and a description of measures to ensure compliance with AML/CFT measures in the company.
The business plan must comply with international requirements and must necessarily include a section on IT support of the company. On average, the term for obtaining a license to conduct cryptocurrency operations in Estonia varies from 2 to 6 months. IT-OFFSHORE specialists will help to significantly reduce the time and costs of the process’s execution. Our company can offer several packages at different prices, depending on the needs and priorities of businesspeople.