Estonia’s Cryptocurrency License Types 2025

In Estonia, companies providing services related to virtual currencies must obtain a license.

Virtual currency services are  Anti-Money Laundering and Terrorist Financing Prevention Act (AMLA). Data services:

• Virtual wallet services that create or store encrypted customer keys and can be used to store and transfer virtual currency;

• Virtual currency exchange service refers to the service that customers exchange virtual currency for currency, currency for virtual currency, or one virtual currency for another virtual currency.

Virtual currency – value represented in digital form that can be transferred, stored or sold by digital means and accepted as a means of payment by natural or legal persons, but which is not a legal tender or financial instrument in any country within the meaning of Directive (EU) 2015/2366 of the European Parliament and of the Council on domestic payment services within the meaning of Article 4(25) of that Directive or a payment instrument or transaction within the meaning of Articles 3(k) and (l) of that Directive.

In order to legally provide virtual currency wallet services in Estonia, a company must apply for a license. Such services include third-party virtual currency storage. In this way, the company can have the necessary data and control the transactions that occur in the customer's wallet.

Applying for an Estonian Cryptocurrency License

Submitting a cryptocurrency license application in Estonia is done electronically through the national portal mtr.mkm.ee.

License applications must include the following information:

1. The address of the service provider and an office space lease agreement/agreement confirming ownership of the office space signed in Estonia.

2. The name and contact details of the person responsible for the service in all places where the service is provided are given in paragraph 1.

3. Name, personal code, date of birth, place of birth and residential address of the members of the management body and the lawyer of the service provider (if the service provider is not registered in the Estonian Commercial Register).

4. Internal controls prepared in accordance with the rules of PTA 14 and 15 on currency and the rules on special persons listed in Article 20 of the International Sanctions Law, as well as the provisions of the law on international sanctions and procedures for verifying their compliance.

5. Name, personal code, date of birth, place of birth, nationality, residential address, position and contact details of the contact person appointed under PTS No. 17.

6. If the enterprise, its members of the corporate management body, prosecutors, beneficial owners or proprietors are foreign citizens, or if the enterprise is a foreign service provider, the service provider is registered abroad, relevant documents issued by the foreign judicial or administrative authorities or relevant criminal

7. A certificate of criminal record or other proof of intentionally committed criminal offence; notarized or authenticated by equivalent means and accompanied by a new legalization certificate (apostille) or certification no later than three months after its issuance.

8. If the enterprise, members of its legal management bodies, prosecutors, beneficial owners or self-employed persons are foreign citizens, copies of their identity documents from all their countries of nationality and non-regulatory documents referred to in paragraph 8 should be submitted.

9. For members of administrative bodies and prosecutors – a document containing the level of education, a complete list of positions held, and documents in law that the applicant considers important to provide, as well as a summary of previous experience.

10. A list of payment accounts opened in the name of the applicant at the Register of Economic Activities, each with a unique identifier, and the name of the account holder; All available payment accounts must be submitted together with the application for an operating license to the Register of Economic Activities, accompanied by a certificate from a credit institution, electronic money institution or payment institution; Proof of payment accounts.

11. Provide information about the virtual currency services to be provided.

12. The amount of capital of the company at the time of application (in Euros) and a statement from the bank confirming the existence of these funds.

13. Subsidiaries (subject to cryptocurrency licenses), if any.

14. The applicant’s audit/audit firm’s data will be reviewed.

15. The company's business plan for the next two years.

16. A detailed technical description of the Company's website through which the Services are provided.

Requirements for applicants

In order to obtain a license to operate, a business must meet the following conditions for a controlled facility:

• The enterprise, its members of the management bodies, prosecutors, beneficiaries and owners shall not be subject to legal penalties for crimes against the State, money laundering or other intentional crimes.

• The company, its management body members, prosecutors, beneficial owners and owners must be in good business reputation. The licensing body will assess whether a good business reputation exists, taking into account the individual's past activities and circumstances. In the absence of suspicious circumstances, a good business reputation is presumed not to exist.

• The contact persons determined by the enterprise in accordance with the RahaPTS Currency Regulation No. 17 must meet the requirements stipulated by law. Only persons with the necessary education, abilities, personal qualities and experience, as well as an impeccable reputation as contact persons may be appointed as contact persons.

• If the business has a subsidiary that wishes to use the business license in the name of the business, the subsidiary must also meet the above requirements.

• The legal address, board of directors and business of a company applying for a license in the field of virtual currency provider activities must be located in Estonia, or a foreign company must be operating in Estonia through a branch registered in Estonia.

• Seats on the committee are based on the residence and nationality of the committee members (whether the committee member is a resident or an Estonian citizen) and other evidence of seat on the committee. The place of activity must meet the requirements of Section 29, Paragraph 2 of the General Civil Law (Place of activity of a legal person - the place where permanent and long-term economic activity or other activities prescribed by law are carried out). If it is not possible to provide virtual currency services on site or if it is not possible to meet the requirements of RahaPTS, it cannot be a place of activity. In practice, this means that the person responsible for RahaPTS compliance, the site staff, direct access to the mandatory RahaPTS data that must be collected, stored and provided to the supervisory authority by the person concerned and his employees, as well as direct access to the application procedures, risk assessments, internal control rules and other possible additional documents to ensure compliance with RahaPTS requirements. The website should also allow the Financial Intelligence Unit to conduct legally required supervision, including on-site supervision. VFX service providers are required to attach business registration documents proving their right to use the premises and business premises, such as a lease or rental agreement. Direct access to mandatory data obtained through the RahaPTS system, which the applicant is responsible for collecting, storing and providing to the supervisory authority, as well as regulations, risk assessments, internal control rules and other possible additional documents.

• A business applying for a license in the field of virtual currency provider activities must open a payment account with a credit institution, electronic money institution or payment institution; be established in Estonia or a contracting state of the European Economic Area and provide cross-border services or open a branch in Estonia. All available payment accounts must be submitted to the register of economic activities together with the activities for which a license is applied, and must be accompanied by a certificate of a credit institution, electronic money institution or payment institution proving the existence of the payment account.

Information of particular interest to the Financial Intelligence Unit during the Estonian cryptocurrency license application process

• The source of capital authorized by a virtual currency service provider.

• Criminal record information of enterprises and related personnel, participating in various lawsuits (criminal lawsuits, illegal behavior lawsuits, administrative lawsuits, bankruptcy lawsuits, etc.).

• Education and experience of personnel, connections with the business.

• The Financial Intelligence Unit is also entitled to request information from other public institutions and third parties pursuant to sections 54(11) and 58(1) of the Money Laundering Act, as well as legal requirements under section 63 of the Money Laundering Act and within the framework of international information exchange.

Upcoming changes in Estonian legislation

The Estonian government has backed a bill to strengthen requirements for virtual currency service providers to reduce the risk of financial crime. In the future, activity licenses will only be issued to service providers that plan to do business in Estonia, and customer data must also be linked to transactions.

"The risks in the field of virtual currencies have grown rapidly in recent years, which forced us to act quickly," said Matthijs Majkel, director of the Financial Intelligence Unit. One of the most important changes will be to reduce the anonymity of crypto transactions to ensure transparency and more effective monitoring of the business environment. In the future, providing virtual currency conversion or exchange services will require the identification of users. Personal data must be communicated with the transaction in the same way as with a bank transfer. If the recipient's wallet does not have a service provider or cannot receive the data, it should ensure real-time monitoring and risk analysis of each transaction.

These requirements are similar to the rules that apply to the movement of funds by banks and payment institutions. Virtual currencies are primarily used for payment or value transfer, i.e. as a currency of exchange – for example, to purchase services. Data collection and sharing significantly reduces the risk of financial crime. The FATF recommends extending these rules to providers of virtual currency services, which is an international standard for preventing money laundering and terrorist financing.

Current regulations allow service providers that do not work in Estonia, have no ties to Estonia and whose supervision – for example, may require unreasonable resources to identify the beneficial owner – to apply for an Estonian operating license. However, the risk is transferred to the Estonian economic environment, endangering service providers that comply with the law, whose reputation may be damaged and communication with foreign partners may become difficult.

According to the project, the Financial Intelligence Unit may refuse to issue a license for virtual currency services in the future if the business does not intend to work in Estonia or its business is not related to Estonia. The project also stipulates that the operating license is not transferable. Trading opportunities with licensed companies will be limited: in the future, the sale of qualified holdings will be prohibited in the first two years. Providers are those who create virtual foreign exchange service providers for third parties on a large scale. Changes must be made to avoid that after obtaining a license, the business is resold to those who do not meet the requirements of the license. In addition, the project will increase capital requirements, which will increase the company's liability and ensure that the licensed company is an active company. As a new company to create a virtual foreign exchange service provider, the capital contribution should be between 125,000 and 350,000 euros, depending on the services provided. Similarly, licensed operating companies should also contribute their own funds in the future. The current minimum authorized capital limit is 12,000 euros.

Considering that the average turnover of companies working in this field is estimated by the Financial Intelligence Unit to be €80 million per year, compliance with the capital requirements should be feasible.

Business organizations and experts, including the Estonian Virtual Currency Association, xChange AS virtual currency service provider, the Estonian Bar Association's IO and IT Law Committee and the Chamber of Estonian Industry and Commerce, participated in the development of the project and provided suggestions.

Estonian legislative changes – updated requirements for cryptocurrency companies from March 15, 2022

The amended Act on Prevention of Money Laundering and Terrorist Financing came into force in Estonia on March 15, 2022.

The main goal of the new legislation is to reduce the risks of money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction in the field of virtual currencies.

The measures are designed to reduce the risks associated with virtual asset providers (VASPs) and improve the regulation of VASPs. The changes are also intended to ensure that VASPs that are not affiliated with Estonia do not lose their Estonian virtual currency licenses.

The main changes are as follows:
1) The authorized capital of a virtual foreign exchange service provider should be:

• If a virtual currency service provider provides virtual currency exchange services (i.e. a person exchanges virtual currency for physical currency or physical currency for virtual currency or one virtual currency for another), at least EUR 100,000.

• If a virtual currency service provider provides a virtual currency transfer service (a service that allows you to conduct at least partly electronic transactions through a virtual currency service provider to transfer virtual currency on behalf of the originator to the virtual currency wallet or account of the recipient), at least EUR 250,000.

When setting up a company for a virtual foreign exchange service provider, the company's authorized capital can only be currency.

2) Prerequisites for customer identification and verification

• Service providers should use technologies with a high level of reliability to identify and verify identities through information technology tools that provide real identification and prevent the alteration or misuse of data transmission.

• For identification and verification by means of information technology, a natural person pursuant to Article 31(1) and (2) of the Act on the Prevention of Money Laundering and the Financing of Terrorism, or a legal representative of a legal person, shall use a digital identity verification document of high reliability established by the Act on Identity Documents or another electronic identification system as published in the Official Journal of the European Union pursuant to Article 9 of Regulation (EC) No. 910/2014 of the European Parliament and of the Council on electronic identity verification and electronic transactions with a high reliability required for electronic identification and electronic transactions and repealing Directive 1999/93/EC (OJ L 257, 28.08.2014, pp. 73-114), as well as an information technology tool with a camera, a microphone, hardware and software for digital identification and a connection to the Internet of sufficient quality.

• In identification and verification, service providers can use information technology tools to compare biometric data.

• When conducting exchange and transfer transactions, the virtual currency service provider of the transaction shall confirm the identity of each customer in accordance with the provisions of Articles 21 and 22 of this Law and collect at least the following information about the person conducting the transaction:

1) In the case of a natural person – name, unique transaction identifier, payment account or virtual currency wallet identifier, name and ID number, and personal identification code or date of birth, place of birth and residential address;

When conducting virtual currency exchange and transfer transactions, virtual currency providers collect unique identification data about the transaction of the virtual currency or transfer recipient, as well as data about the payment account identifier or virtual currency wallet, if the payment account data or virtual currency wallet identifier is used in the transaction.

3) Cryptocurrency Provider Business Plan

The business plan of a virtual currency provider must cover a period of at least two years.

4) Requirements for virtual currency providers’ own funds

The virtual currency provider’s own funds must at all times meet the larger of the following:

1) Authorized capital scale

2) Amount of own funds calculated by calculation method:

If a virtual currency service provider provides services specified in Section 101 or 102 of Part 3 of this Act, the provider’s own funds shall be at least equal to the sum of the following:

1) 4% of the transaction volume of the services provided, or a transaction value equal to EUR 5 million;

2) 2.5% of the transaction value of the service operation, which exceeds EUR 5 million but does not exceed EUR 10 million;

3) 1% of the transaction value of the services provided, where the transaction value exceeds EUR 100 million but does not exceed EUR 100 million;

4) 0.5% of the transaction value of the services provided, where the transaction value exceeds EUR 100 million but does not exceed EUR 250 million;

5) 0.25% of the transaction value of the services provided, where the transaction value exceeds EUR 250 million.

The share of transactions as services specified in Clause 6 of this Article shall be calculated based on one-twelfth of the total transaction volume of services specified in Clauses 101 and 102 of Article 3 of this Law in the previous year. Venture capital providers that have been in operation for less than 12 months in the previous year must divide the amount of remittances and foreign exchange transactions in the previous year by the number of months in the previous year to obtain the corresponding amount.

Virtual foreign exchange service providers should take steps to ensure that their own funds can be accurately calculated at all times.

The Financial Intelligence Unit may determine that a virtual foreign exchange service provider must bring its own funds into compliance with the requirements of this Law and the laws and regulations promulgated pursuant thereto within a prescribed period.

5) Cryptocurrency Provider Audit

Annual report audit is mandatory for VFX service providers. Auditor data should be specified when applying for a license.

6) Location, location, board members and contact requirements for virtual currency providers

Virtual currency service providers must have a higher education and at least two years of professional experience as board members.

A director of a virtual foreign exchange service provider shall not serve as a member of the board of directors of more than two virtual foreign exchange service providers.

7) State fee for applying for a cryptocurrency license increased from 3,300 EUR to 10,000 EUR

Our firm's lawyers are always happy to answer all your questions about obtaining a cryptocurrency license in Estonia and accompany your company throughout the licensing process.

The Estonian government has been tightening up its cryptocurrency regulation recently, stressing the importance of reliability and transparency for businesses. Although this means paying high application fees for cryptocurrency licenses, the jurisdiction remains attractive due to its stable business environment, exemption from corporate income tax on retained profits, and state-of-the-art public e-services and e-banking, including widely adopted digital signatures that speed up business transactions.

Other notable advantages of Estonia’s business environment:

• One of the most stable, economically sound and progressive countries in Central and Eastern Europe, a trusted member of the EU, OECD, Eurozone and Schengen Area

• In the 2021 Corruption Perceptions Index, Estonia ranked 13th out of 180 countries, making it one of the most transparent and least corrupt countries.

• In the 2022 Index of Economic Freedom, Estonia ranks 7th out of 177 countries, with indicators such as judicial efficiency, tax burden, regulatory efficiency, investment freedom, etc.

• In the 2019 World Bank's Ease of Doing Business Index, Estonia ranked 18th out of 190 countries, indicating favorable business conditions

• Estonia ranks 22nd in the world for Wi-Fi

• A well-educated workforce that is prepared and motivated to drive business forward

• Licensed Estonian crypto companies can provide services abroad without applying for new licenses, provided they meet the strengthened requirements of foreign authorities

• Estonia offers an e-residency card, a government-issued ID card that can be used for digital signatures, allowing for remote company registration and effective management (application fee is 120 EUR)

• Estonia's company registration portal is the fastest in the world

The main legal document of Estonian corporate law is the Commercial Code. For foreign investors, there are no specific requirements, which means that all non-Estonian entrepreneurs have the same rights and responsibilities as Estonians.

The Public Register of Estonian Companies is maintained by the Centre for Registration and Information Systems (RIK). This is where all statutory public information on Estonian companies is stored.

Legal Business Structures for Crypto Activities

To become a fully licensed crypto business in Estonia, you need to create a limited liability company (OÜ). Advantages include a flexible governance structure, no residency or citizenship requirements for founders and directors, and no personal liability for the debts and liabilities of the business. Each shareholder's contribution determines their obligations.

Key members of a limited liability company (OÜ):

• Founder – The first owner of the company, who never changes

• Shareholders or owners, shareholders of a company (shares can be sold, resulting in a change in ownership)

• Board member or board member – a representative of the company (the owner of the company can be appointed as a director)

Requirements for a Limited Liability Company (OÜ):

• The company name must comply with national legislation and end with OÜ

• At least one founder, who can be a natural person or a legal person

• At least one shareholder, any nationality

• Minimum share capital – 100,000 EUR (only fiat currencies can be paid, not cryptocurrencies)

• The minimum par value and minimum share capital of a share can be 0.01 EUR

• If the Articles of Association do not specify that capital contribution shall be made in kind, the shares shall be paid in legal tender.

• Get a registered office in Estonia for crypto activities

• Open a crypto-enabled corporate bank account in Estonia or the EEA

• Appoint a board of directors to represent the company (who can be e-residents and manage the company online)

• If all directors of the company are e-residents, the company must employ a local point of contact who will be responsible for receiving documents from the Estonian authorities.

• Hire a local accountant

• Recruiting AML/CFT Compliance Officers

Required files:

• Establishment Documents

• Articles of Association

• Copies of identification documents of founders, shareholders and directors

• Business plan reflecting business sustainability

• Confirmation of business address in Estonia (residential address is not allowed)

• The company's founders, shareholders and directors should receive a certificate confirming a clean criminal record

The establishment file should contain the following information:

• Company Name

• Legal address

• Name and place of residence or registered office address of founder

• Proposed share capital amount

• The nominal value and number of shares, including their distribution among the founders

• Amount, order, time and place of payment of shares

• If the shares are paid for with contributions in kind, the method of valuation should be specified and clearly described

• Board Information

• When the observatory is established, its member information

• Information for prosecutors or auditors, if necessary

• Estimated Fund Expenditure and Payment Procedures

The charter should contain the following information:

• Company Name

• Registered Office

• The amount of share capital can be specified, either as a specific amount or as a minimum and maximum capital (the minimum capital should be at least one quarter of the maximum capital);

• Specific procedures for share-based payment

• The specific rights associated with the shares or shareholders; if there are different classes of shares and the rights vary, the document specifies the names of the different classes of shares and the specific rights of each class of shares

• If the shares are paid for with contributions in kind, the method of valuation should be specified and clearly described

• Composition and scope of statutory reserves

• If there is a board of directors and a supervisory board, the number of members must be specified (this can be expressed as a specific number or as a maximum and minimum number and, if necessary, the provisions for the representation of the board members)

• Other obligations stipulated by law

• All documents must be submitted in Estonian. Documents in foreign languages must be submitted together with a certified Estonian translation. If you are looking for a sworn translator or a notary public, feel free to contact us – we will be happy to find the best solution for you.

Regulations for non-monetary or in-kind contributions:

• Anything that is immediately assessed and transferred to a limited liability company (OÜ) and may be the subject of a claim

• This should not be a service or work provided by the company, nor an activity of the founders in the process of setting up the company

• Shareholders should inform third parties of their rights regarding non-monetary contributions

• If, at the time of incorporation or share increase, the value of a non-monetary contribution is less than the par value of the shares resulting from the contribution or the share increase, the company may require the shareholder to pay legal tender as contribution to compensate for the portion of the contribution value that is less than the par value.

Estonia

capital	population	currency	gross domestic product
Tallin	1,357,739	Euro	$29,344

What you need to do

To set up an Estonian company, you need to use an electronic residence card that allows you to register a company online, or sign a power of attorney authorizing a representative to act on your behalf. Alternatively, you can travel to Estonia and complete all the procedures yourself.

The registration process usually takes up to one week, provided all legally required documents are in place and submitted.

To form a limited liability company (OÜ), the following steps should be taken:

• Check your company's name and reserve it in the Commercial Register

• If necessary, sign a letter of authorization

• Sign a lease agreement for your local office

• Opening a corporate bank account under the company name and transferring the required equity before the issuance of a crypto license

• Submit the registration application and necessary notarized documents to the Commercial Registry

• Registration fee – 265 EUR

• When a company is registered with the Registry it will be given a unique registration code

• Register with the Estonian Social Insurance Board (ENSIB)

• Recruit to meet minimum requirements

• Apply for a crypto license from the Estonian Financial Intelligence Unit (FIU), which oversees anti-money laundering activities

The Tax and Customs Department will automatically include your company in the list of taxpayers and once registered in the Commercial Registry, you will only need to obtain a company Tax Identification Number (TIN).

Only licensed crypto companies can operate in Estonia. To obtain a license (valid for an unlimited period), you must pay an admission fee of 10,000 EUR. If all AML requirements are met, the FIU will issue the license within 6 to 12 months.

Each successful applicant is granted the status of a financial institution, which means that it is obliged to comply with the same rules and reporting requirements as any other financial institution in Estonia.

If you want to make any changes to your crypto business after the license is issued, be prepared to pay the €4,000 government fee for license renewal and wait for approval from the authorities before relaunching your business.

Taxation of Crypto Companies in Estonia

Once a crypto company is established in Estonia, it becomes a tax resident and is therefore automatically included in the Estonian taxpayer register. The only tax that requires separate registration is VAT.

Estonia has not yet developed any crypto-specific taxation framework, which means that crypto companies are currently taxed the same as other businesses. Taxes in Estonia are collected and administered by the Estonian Tax and Customs Board (ETCB).

Standard tax rates in Estonia:

• Corporate Income Tax (CIT) - 0%-20% (as determined by the Income Tax Act)

• Social Tax (ST) - 33% (as determined by the Social Tax Act)

• Value Added Tax (VAT) - 20% (as determined by the VAT Law)

• Withholding Tax (WHT) - 7%-20% (as stipulated by the Income Tax Act)

Corporate income tax does not apply to retained and reinvested company profits, which is beneficial for growth-oriented crypto companies (which means if your crypto company does not distribute dividends, they are tax-free). Resident companies are taxed on their worldwide income, while non-resident companies are taxed only on income earned within Estonia.

Social tax must be paid by resident companies, non-resident companies with a permanent establishment in Estonia and non-resident companies making payments pursuant to Section 2, Paragraph 1 of the Act on Social Tax.

Registering for VAT is optional, unless your business reaches the annual turnover threshold of €40,000. Once a company exceeds the threshold, it has three business days to register as a VAT taxpayer. However, VAT is payable from the time the threshold is exceeded, regardless of the registration date. How quickly the threshold is reached depends on the nature of the company's activities, as not every crypto-related economic activity is subject to VAT. According to the ECJ ruling, the purchase and sale of cryptocurrencies are exempt from VAT.

The withholding tax rate depends on the type of payment (services, fees, interest, royalties, etc.). Dividends are tax-exempt, although a reduced rate of 7% is levied on dividends paid to residents and non-residents who are already taxed at the lower corporate income tax rate.

Among other tax benefits, Estonia has over 60 international agreements that eliminate double taxation, allowing your crypto business to protect your income from taxation in two different countries.

If you are ready to establish a crypto company in Estonia, our experienced and dynamic RUE team will lay the foundation for your success by providing comprehensive legal advice on company formation, licensing, taxation, and professional financial accounting services. Contact our experts today for a personalized quote.

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