Cryptolicence in Estonia 2020: what has changed and how to get it

Estonia is one of the most popular jurisdictions for registering companies planning to work with the cryptocurrency. Although virtual money activities within the country are tightly controlled by the local financial intelligence unit, until recently it was not difficult to obtain permission to operate. How has the cryptolicence changed in Estonia 2020?

Benefits of the new cryptolicence in Estonia

The first licences for virtual currency transactions started to be issued in Estonia in 2017. And these were two independent types of licenses: "virtual currency exchange" and virtual wallet. In three years, foreign companies received several thousand permits in Estonia.

This rush was justified: the jurisdiction holds leading positions in ratings for the development and availability of IT technologies and has a wide network of ATMs and exchangers that support Bitcoin. The new Estonian cryptolicense is called Virtual currency service provider and allows its owners:

• to perform the full range of operations with fiat and cryptocurrencies (exchange, storage, transfers);
• save on processing (the cost of obtaining is lower than in other European countries);
• issuance of an e-resident card (simplifies interaction with government agencies and provides access to benefits and grants);
• legally avoid paying VAT, income tax and submitting annual financial statements;
• to position the owner company as a full-fledged financial institution.

The CryptoCurrency Regulation Act was in force in Estonia until March 2020, and the need to amend it arose due to the tightening of international AML and CFT policy. The new requirements of the single license of Virtual currency service provider started to apply already in March this year and concern not only new companies, but also those who had received work permits earlier. They are obliged to bring the documentation in compliance with the new law by July 1, 2020.

Requirements for obtaining Virtual currency service provider

Getting a virtual valuables service provider's cryptolicense has become a bit more complicated:

• the state fee has increased almost 10 times, now it is 3 300 euros;
• the minimum share capital of a firm claiming to be a Virtual currency service provider must be at least 12,000 euros;
• the list of requirements for the company has increased (impeccable business reputation; legal and actual address in the country, corporate account with a large EU bank);
• the persons managing the company must stay in Estonia most of the time, prove their qualifications and have no problems with the law.

It takes only 3 months to get a cryptolicense of Virtual currency service provider in Estonia in 2020 with the help of IT-OFFSHORE specialists. Our lawyers are able to create a new company from scratch, provide detailed explanations on how to obtain a cryptolicence in Estonia in 2020 or apply for a replacement of the existing permit. We will check the necessary documentation package and tell you how to minimize costs and tax burden.