Previously, Estonia was part of the Soviet Union, so in the early 1990s, it had an inferior economic performance. However, in just a few years, it has been able to go a very long way and become a developed country with a stable economy and a good information climate. It was because the country’s government did everything to develop the IT industry.
With the advent of the blockchain, experts decided to support the crypto industry, creating relatively simple and understandable licensing rules. To work legally in this jurisdiction, you must obtain a crypto license in Estonia. It will allow you to create a truly successful project that can work throughout the EU.
Features of the legislation
The legal basis of the Estonian legislation governing the circulation of tokens is the Commercial Code and the Law on the Prevention of Money Laundering and the Financing of Terrorism. The prescribed procedures exclude the shadow circulation of funds and financial corruption. Key provisions reveal the general requirements of the AML (anti-money laundry) and KYC (know your client).
The regulator provides several types of permit packages. From a business point of view, permits for the right to conduct exchange transactions are beneficial. Implementation is allowed in fiat-crypto directions and between tokens. The acquisition of popular licenses will ensure sufficient funds turnover and profit.
Additionally, access to the function of providing services for saving, accumulating, and promoting cryptocurrencies is opened. This option will become a significant income line for the exchange with proper management.
Estonia follows in the footsteps of a unified European policy to maintain the legal circulation of funds. This aspect classifies cryptocurrency as an electronic commodity value. The turnover of accumulated tokens formally refers to economic activity. Compliance with the Directive of the European Parliament No. 849-2015 required relaxed formalities from the Estonian authorities regarding the crypt. However, the state is a reliable business environment for blockchain merchants.
Requirements for crypto organizations
If you want to get a work permit, your organization must meet specific requirements:
- the organization must be incorporated in that jurisdiction;
- thoughtful business plan;
- local officials and employees;
- the authorized capital of at least 100 thousand euros;
- compliance with KYC/AML policy rules;
- the excellent reputation of the owner and the central employees.
In general, if you are ready to work honestly and legally, there will be no particular problems with licensing. If you are still determining if your organization meets the requirements, our experts will analyze your company’s performance and suggest what areas should be improved.
The procedure for obtaining permission for cryptographic license in Estonia
The advantages of opening a crypto exchange license in Estonia are:
- active support of the blockchain by the state;
- reasonable requirements for the formation of a package of documents;
- possibility of remote business management;
- organization of the entire document flow on the issue of licensing in electronic form;
- the presence of influential local companies that take care of all the maintenance of this process.
Aside from generating start-up capital, the biggest challenge is preparing local assets. The residence of the company must be predominantly local. It applies to both financial matters and recruitment. The founder can be a foreigner, but Estonian citizens must be on the board. The same applies to the office’s location, and the legal address must belong to the national jurisdiction. Moreover, when checking, you should be prepared for an actual inspection of the company’s location.
Some inconvenience is the need to draw up all documents only in Estonian. The solution to this issue can be independently entrusted to the translation agency; however, it will be adequate to commission the option of a specialized lobbying company.
The Estonian Financial Intelligence considers the application within 120 days. The period may be extended by additional inspections up to 6 months. Accuracy in the observance of formalities at the preparatory stage guarantees the exclusion of the transfer. The main thing here is the result since the Estonian license of the crypto exchange has no expiration date and is revoked only in case of gross violations.
Opening a crypto-exchange requires funds investments, which, with diligent work, return quite quickly. The first step is to prepare the authorized capital of the company. The minimum bar is set at 12,000 euros. It is important to remember that the legislature prohibits using cryptocurrency as a payment instrument for this purpose. Funds are credited to board members in proportion to the allocated share, which confirms their right to regulate the company’s activities.
Confirmation of financial reserves is provided to the regulator even before the request is made. Successful obtaining of a license gives access to the specified amount, which can be used for operational purposes. The same provision applies to existing companies.
All transaction issues must be resolved in the Estonian economic space, so opening accounts is indispensable. Passing this step allows you to get registered in the Estonian commercial register.
The minimum payment for company registration is 500 euros, and the final amount depends on the options opened. If you are already the owner of an operating business, you will only have to pay a license fee of 3,300 euros.
It will not be possible to recruit personnel formally based on anti-corruption requirements. Be sure to transparently prescribe the terms of remuneration of the employee responsible for the security and management of the company. This procedure is carried out with the help of employment contracts, copies of which are required when forming a permit package of documents.
Other specialists can either be part of the company’s staff or be involved temporarily. It is allowed to carry out accounting support by a separate organization with the necessary work experience.
Optimization of the preparation process
The crypto exchange will start working faster if the legal and economic issues of its opening are entrusted to a reliable intermediary company. The Estonian market has several dozen similar offers. Given that the pricing policy here is generally the same, one should first pay attention to sufficient experience and competence availability. A positive argument for the choice will be the presence of successfully implemented projects to open crypto exchanges.
Self-training includes accumulating the necessary resources for the initial payments and the statutory fund and recruiting staff for critical positions. Each document sent to the Estonian Financial Intelligence must be rechecked to exclude the formal possibility of delaying the review period.
Although the license has yet to expire, its validity is canceled unless core operations are carried out within 6 months after opening. Crypto exchange is a dynamic tool for earning money on currency speculation. The global rise in blockchain popularity gives this type of business solid profitability.
Do you want to promote your crypto project and get more traffic?
You can contact the specialists of blockchain SEO agency to discuss your plans and SEO goals.