Estonia has now become among the most crypto-friendly places in the globe with its clear regulation of the cryptocurrency business. Crypto entrepreneurs are flocking to the country due to its forward attitude toward digital assets, ease of obtaining a license, and attractive tax treatment.
Whether you are planning to start a cryptocurrency exchange, wallet provider, or any other virtual asset service provider (VASP) in Estonia, this guide will take you through the licensing process, how to apply, and the main advantages of setting up shop in the forward-thinking Baltic country.
Why Choose Estonia for a Crypto License?
Estonia was one of the first countries to regulate cryptocurrency businesses, introducing licensing requirements for VASPs in 2017. Here’s why many crypto companies choose Estonia:
- Clear Regulatory Framework – The Estonian Financial Intelligence Unit (FIU) oversees crypto licensing, ensuring compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations.
- EU Membership – An Estonian crypto license allows businesses to operate across the European Union under the Markets in Crypto-Assets (MiCA) framework.
- Favorable Tax Policies – Estonia has a 0% corporate income tax on retained earnings, making it a tax-efficient location for crypto businesses.
Eligibility and Requirements for a Crypto License
To qualify for an Estonian crypto license, applicants must meet the following criteria:
1. Company Registration in Estonia
- A locally registered OÜ (private limited company) is required.
- At least one board member must be a resident of the EU/EEA or hold an Estonian e-residency card.
2. Physical Office in Estonia
A registered office address must be maintained in Estonia (virtual offices are not accepted).
3. Share Capital Requirements
- A minimum share capital of €12,000 for a wallet service license.
- €12,000 for an exchange license (or €100,000 if applying for both).
4. Compliance & Internal Policies
- Implement robust AML/CFT policies, including KYC (Know Your Customer) and transaction monitoring.
- Appoint a Compliance Officer responsible for ensuring regulatory adherence.
5. Fit and Proper Test for Management
Board members and key personnel must pass background checks to ensure no history of financial crimes.
6. IT Security & Safeguarding Measures
- Secure IT infrastructure to protect user data and funds.
- Cold storage solutions for wallet providers.
Step-by-Step Application Process
Incorporate an Estonian Company – Register an OÜ with the Estonian Business Register.
- Prepare Documentation – Draft AML policies, business plans, and internal control procedures.
- Submit Application to the FIU – File the application along with supporting documents.
- Pay State Fees – The application fee is €330 for each license (exchange or wallet).
- Await Review & Approval – Processing takes 1-3 months, depending on the completeness of the submission.
- Commence Operations – Once approved, the company can legally operate as a licensed VASP.
Post-Licensing Obligations
After obtaining the license, crypto businesses must comply with ongoing regulatory requirements, including:
- Regular Reporting – Submit suspicious activity reports (SARs) to the FIU.
- Annual Audits – Conduct financial and compliance audits.
- AML Training – Ensure staff are trained in anti-money laundering procedures.
Estonia remains a top choice for cryptocurrency licensing due to its transparent regulations, EU access, and business-friendly policies. While the application process requires thorough preparation, the benefits of operating in a well-regulated jurisdiction make it a worthwhile investment for serious crypto entrepreneurs.
Interested in applying for an Estonian crypto license? Contact LegalAes for expert guidance and support throughout the process.