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October 6, 2022

Estonian crypto license and its benefits

Is it worth it? Estonian Crypto License

Quest post, Author: Gertrud Kalpus, Head of Legal at Comistar Estonia, crypto license requirement in Estonia.

Want to open a crypto company, or do an ICO? Here are the legal requirements for opening a crypto license company in Estonia.

In 2022 the changes to the Estonian AML Act were approved by the Parliament. The licensed service providers had until the 15th of June 2022 to bring their activities into line with the new regulation which means modifying and submitting all existing and new supportive documentation to the Estonian Financial Intelligence Unit (FIU).

By June 15, the FIU receives 135 applications for amendment of the authorisation by virtual asset service providers. At the beginning of 2022, only 381 valid authorizations were issued in Estonia for the provision of virtual currency services.

The analysis made by the FIU indicated that the legislative amendments made in 2020 did not fulfil their purpose. Therefore, the authority decided to add new and stricter requirements.

  • Having the necessary personnel with local substance (Estonian local managers, AML officers, employees, clients, office, etc.).
  • Providing passport copies, CV-s (resumes) and education info and non-criminal records from all countries of citizenship for all participants in the company.
  • Providing the information about all company’s bank accounts including bank name and IBAN code in the European Economic Area (EEA). The account needs to be opened at a traditional bank or e-money institution or payment service provider operating officially in the EEA and approved by the Estonian Financial Supervision and Resolution Authority (FSA).
  • The share capital must be a minimum of 100 000€ or 250 000€ depending on the company’s business model.
  • Drafting the business plan and financial projections for at least two subsequent years.
  • Drafting the AML/KYC-related documentation (AML Rules of Procedure, Risk Assessment and Risk Appetite Statement)
  • Implementing the real-time risk analysis (simplified “Travel Rule”).
  • Drafting the license documentation (business continuity plan, IT-systems description, the
    description of services, the description of management board member activities etc.)
  • Appointing an external and internal auditor.
  • Providing the balance sheet and annual report audit.
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All documents must be submitted to FIU with Estonian translation!

The state fee increased for obtaining the license, which now is 10 000€. But all the companies with valid licenses will have to pay the state fee of 4000€ for making the changes in their license application.

Services that require a license:

Virtual Currency Wallet Service
A virtual currency wallet service is a service that creates or maintains encrypted keys for customers that can be used to store, store, and transfer virtual currencies.

Virtual Currency Exchange Service
A virtual currency exchange service is a service in which a person exchanges a virtual currency for money or money for a virtual currency or one virtual currency for another.

Virtual Currency Transfer Service
The purpose of the transfer service is to transfer virtual currency from one customer to another. This means that a person does not provide a wallet or exchange service but mediates the movement of virtual currency between two parties. As part of the transfer service, the virtual currency service provider enters into a transaction on behalf of a natural or legal person, within the framework of which the virtual currency moves from one virtual currency wallet or from one account to another. The service includes all services that enable a person using the service to transfer ownership, possession, or other control over the virtual currency or the opportunity to benefit from the virtual currency to other persons.

Issuing a virtual currency (ICO)
Virtual currency can be issued and/or transferred using spreadsheets or blockchain technology. One mechanism for distributing such assets is an event commonly referred to as an ICO (initial coin offering). In an ICO, the issuer or PR engine usually offers virtual currency for sale for cash or another virtual currency. An ICO may be involved in raising money for a project. At the time of the offer, issuers or other persons associated with the ICO may allow buyers of the virtual currency the opportunity to earn income from changes in the price of the virtual currency or the execution of the project. Once issued, the virtual currency may be resold on the secondary market.

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The Benefits of an Estonian Crypto License


Crypto companies conduct business from Estonia for the following reasons, which are undeniably profitable for doing business across Europe.

An Estonian crypto-company can benefit from fair and accurate regulation, for one thing. As a result of the Estonian Anti-Money Laundering Act and related provisions, licensed companies are able to understand what is permitted, what is prohibited, and how to remain compliant with the law in general.

With the e-Residency program, Estonia offers a favorable business environment. Through its e-Residency program, almost all aspects of establishing an Estonian company can be carried out online from anywhere in the world. Recent data indicate that Estonian e-Residents around the world generate more than 1 billion euros of economic activity through their Estonian companies every year.

Furthermore, Estonia does not have corporate tax. Instead, only distributed profits are typically subject to a 20% corporate income tax of 20/80 of net profits distributed to companies. As a result of the Estonian taxation scheme, a company can reinvest its profits tax-free.

Most importantly, the transferability of the activity license

The activity license is not transferable to another person! The activity license will be revoked if the service provider merges with or transfers over to a new entity.

If you’re interested in updating or obtaining the Estonian crypto license, get in touch with Comistar Estonia via their webpage or write directly to hello@comistar.com.