How to get a crypto license in Estonia: a complete guide

Estonia is recognized as one of the most forward-thinking European countries when it comes to adopting blockchain technology and cryptocurrencies. Thanks to its business-friendly policies and simplified licensing procedures, Estonia has become a hub for crypto entrepreneurs. In this guide, we will explore the process of get a crypto license in Estonia and why it is an attractive option for businesses in the digital currency sector.

Since 2017, Estonia has issued more than 1,000 cryptocurrency licenses, making it one of the pioneering countries in regulating the cryptocurrency sector. Initially, the licensing process was relatively simple, attracting a significant number of international companies. However, in 2020, regulatory updates introduced stricter requirements, including higher capital thresholds and enhanced AML/KYC obligations, to ensure the integrity of licensed entities.

These changes marked a move towards increased oversight, reflecting Estonia’s commitment to balancing innovation and compliance. Over the years, this approach has cemented Estonia’s reputation as a trusted hub for cryptocurrency businesses around the world.

Why choose Estonia for your crypto business?

Estonia offers a favorable environment for crypto businesses thanks to its progressive regulatory framework and innovative digital infrastructure. The country’s e-residency program allows entrepreneurs around the world to start and run businesses remotely. Additionally, Estonia’s transparent tax policy and access to the European market make it a preferred destination for blockchain and crypto companies.

Main benefits of starting a crypto company in Estonia:

• Simplified licensing process: Estonia’s clear regulatory framework reduces bureaucratic obstacles.
• Reputation: Being licensed in Estonia builds credibility in the global crypto market.
• Tax efficiency: Estonia’s system of no corporate tax on retained earnings allows companies to reinvest their profits without additional tax burdens.

Steps to obtain a crypto license in Estonia

The process of obtaining a crypto license in Estonia is simple but requires careful preparation. Here is a step-by-step guide:

Step 1: Create an Estonian company

To apply for a crypto license, you must first register a business in Estonia. The process involves choosing a unique company name, preparing the necessary documentation and submitting an application to the Estonian Commercial Register.

Step 2: Open a business bank account

Having a local business bank account is essential for managing business finances. The Estonian banking sector is highly digitalized, making it easier to open and manage accounts remotely.

Step 3: Appoint key personnel

You must appoint a local compliance officer to ensure that the company complies with Estonian regulations. Additionally, at least one member of the board of directors must be an Estonian resident or have e-resident status.

Step 4: Prepare the necessary documentation

The application process requires submission of detailed documentation, including:

• Business plan
• AML/KYC procedures
• Contact details for compliance officer and board members

Step 5: Apply for the crypto license

Once all the documents are ready, submit your application to the Financial Intelligence Unit. The approval process typically takes approximately 60 business days.

Compliance Requirements for Crypto Businesses

After obtaining the license, crypto companies must comply with Estonian laws and regulations. Key compliance requirements include:

• AML/KYC procedures: Implement anti-money laundering (AML) and know your customer (KYC) processes to ensure customer verification.
• Annual report: Submit financial and operational reports to the relevant authorities annually.
• Minimum capital required: Maintain a minimum share capital of €100,000 for virtual currency service providers.

Challenges of Obtaining a Crypto License

Although Estonia’s licensing process is efficient, there are potential challenges, such as:

• Regulatory changes: Keeping up to date with changing regulations is essential to avoid compliance issues.
• Strict requirements: Detailed documentation and local representation can be demanding for foreign contractors.
• Language barrier: Although English is widely used, some official procedures may require translations into Estonian.

Why work with experts?

Navigating the licensing process can be complex, especially for foreign entrepreneurs who are unfamiliar with the Estonian regulatory landscape. Partnering with experienced professionals ensures a smooth application process, compliance with all requirements and successful business formation. Experts can help you with critical aspects such as setting up a business, drafting and reviewing the necessary documents and liaising with the Estonian authorities, ensuring that every step of the process is handled efficiently and accurately.

Additionally, professionals stay up to date with the latest regulatory changes, helping businesses adapt to new compliance standards and avoid potential pitfalls. They also provide valuable insights into market practices, ensuring your business is well prepared to operate in Estonia’s competitive crypto ecosystem. Whether understanding local tax obligations, meeting annual reporting requirements, or implementing robust AML/KYC procedures, working with experts saves time, reduces risk, and enables entrepreneurs to focus on their core business goals.

About us: Eesti Firma

Since 2017, Eesti Firma has been a trusted partner for companies wishing to establish themselves in Estonia. We have helped our clients obtain over 300 crypto licenses, making us one of the most experienced service providers in the field. Our comprehensive services include business registration, licensing assistance, and ongoing compliance support.

Whether you are a startup or an established business, Eesti Firma is here to guide you every step of the way. With our expertise, your crypto business can thrive in Estonia’s dynamic and innovative environment.