Company in Estonia

Starting a cryptocurrency company in Estonia

with exchange and wallet service provider licenses

Since January 2018 we have obtained more than 400 crypto licenses 


1. About licenses   |   2. Requirements   |   3. Timeframe  |   4. Opening bank account   |   5. Taxation   |   6. Token types   |   8. Inquiry forms


Recent good-to-know info

Why to be cautious when buying a licensed ready-made company

  1. Any change in the company structure (owners, directors, UBOs, compliance officers) requires registering amendments in the FIU (license issuing authority) with full documents set, thus the procedure is the same as when applying for the license(s) first time.

  2. Generally getting the FIU’s consent for changing the structure of the ready-made licensed company takes much longer than getting feedback for the new company license application. Thus, the process is longer and is generally more expensive.

3. FIU does not regard crypto licensed shelf companies well and it raises a “red flag”, as in their (and our) opinion there is no logical reason for purchasing a licensed shelf company, instead of setting up a new one and then applying for the licenses. Your company will most probably attract the FIU’s higher attention in case of further processes as well.

4. When you purchase a licensed ready-made company, the FIU might ask for evidence proving that the company has started the licensed activities (as in that case the company has been issued the licenses some time ago already). In case of licensed shelf companies, it will be impossible to fulfil that requirement, which, in turn, will cause the FIU to question the application.


Cryptocurrency exchange and wallet service provider licenses

Companies that deal with virtual currencies can apply for 2 different activity licences:

1. Providers of a service of exchanging a virtual currency against a fiat currency

It allows exchanging fiat to crypto, crypto to fiat, crypto to crypto.

2. Providers of a virtual currency wallet service

It allows providing virtual currency (hot and cold) wallet service in the framework of which the company generates keys for Clients or keeps Clients’ encrypted keys, which can be used for the purpose of keeping, storing and transferring virtual currencies.

This service means offering custodial services of credentials necessary to access virtual currencies

General information about the above-mentioned licenses

The operating licences are issued by the Estonian Financial Intelligence Unit (FIU), which is an independent structural unit of the Estonian Police and Border Guard Board. Link
When applied together, two applications must be submitted and two different licenses are issued.
The main acts that regulate the activity can be found here.

The company is qualified as a Financial Institution, but has no special reporting requirements to tax authorities. Accounting must be done like for any other company. No special reporting to the regulator is needed, but FIU can always make precepts and inquiries about the company's activities. You may find Financial Intelligence Unit's advisory guidelines here.

§ 75.  Revocation of authorisation/license

In addition to the grounds provided for in subsection 1 of § 37 of the General Part of the Economic Activities Code Act, the Financial Intelligence Unit will revoke authorization specified in subsection 1 of § 70 of this Act where:

  1. the Financial Supervision Authority has granted authorisation to the undertaking;

  2. the undertaking repeatedly fails to follow the precepts of the supervisory authority;

  3. the undertaking has not commenced operation in the requested field of activity within six months from the issue of the authorisation.


As per June 20th. 2018, our clients have received 4 refusals because of one or more reasons listed below

  1. There is a foreign corporate shareholder (offshore), which can't present criminal records

  2. Related persons have a U.S.A. citizenship. Our experience shows that it is difficult to get a criminal record certificate from the U.S.A., which is compliant to the FIU requirements

  3. Related persons have had a criminal record in the past



  1. Documents presented to officials

  • Certificate of the register of convictions (a.k.a. criminal record) for all related persons (shareholders, board members, ultimate beneficiary owners and responsible person)

  • Passport copies of all above mentioned persons

As a rule all documents must be in English (or Russian) and certified with an apostille. These documents may not be older than 3 month. It is also required to present rules of procedure for AML purposes. Usually this is prepared by KRM Advisor. Officials have the right to ask for additional information and they often ask:

  • CV-s of related persons

  • Description of planned activities

2. License obtaining process

To apply for the above mentioned license(s), it must be done via a company registered in Estonia or through a registered branch office of a foreign company in Estonia. As a rule, we suggest to use a local company not a branch office, as branch registration is clearly a more complicated task.

When a local company is registered and all required documents collected, we will pay the state fee of 345 EUR and apply for the license(s).

During  the licence application process we also assist in current matters, as authorities often have additional questions or they need some clarifications.


3. Additional transparency requirement

In case of a foreign corporate shareholder (of an Estonian cryptocurrency company), the FIU requires the criminal record of the foreign company and every related person of that legal entity. It is also required to provide the foreign registry extract with the list of UBOs of the relevant entity. Thus, using a foreign company in your structure complicates the process a lot. Our suggestion is to avoid using foreign corporate shareholders.


4. FIU meeting request since 17 April 2019

The FIU has a new policy regarding the crypto licensing process, both for the new applications and also for changing the current licenses.

They now have a right to invite the FIU contact person/compliance officer (responsible person) for a face to face meeting before granting any license(s). The goal is to confirm that the person in charge is familiar with the AML rules of procedure, relevant Estonian laws and obligations to notify the FIU in case of money laundering or terrorism financing suspicion.

In case the FIU contact person/compliance officer is not in the structure of the company (in the board or shareholding), the FIU wants to see a clear employment relation between the him and the company. Inability to fulfil this requirement has been a reason for a FIU negative decision.

In case of a meeting request, the client has 30 days to travel to Estonia and meet the FIU. The protocol and the licensing decision are both issued after the meeting. In case the client cannot come to Estonia within the given deadline, the FIU automatically closes the case and gives a negative answer. 

The meeting lasts approx. 2 hours and it will be conducted in Estonian, thus a translator is requested to accompany the client. We can provide an experienced translator for the fee of 250 EUR per meeting.

5. New license requirements from the FIU

There are planned some major changes in the Estonian crypto field:

  1. State fee will increase to 3300 EUR (from current 345 EUR)

  2. FIU will start requiring the headquarter and management to be located in Estonia

  3. Application period will increase to 3 months (from current 1 month)

These changes will be accepted by our Parliament probably within the next half year. The requirement regarding the office and management to be in Estonia, will be applicable to existing licenses as well.

Thus, it is an option to try to complete everything before the major changes. However, as there are no dates and deadlines mentioned in the law amendment draft, we cannot give you any guarantees for the whole license application project period.



Company registration

Once we have obtained all the initial information from you, it takes usually about 1-2 days to create the company.

In case you choose a ready-made company, it is already created and ready to be transferred to you.

To transfer a company to your name, you will need to visit Estonia for 1 day. During that day we transfer the company shares and board membership to you. Changes will be visible in the register in a few days (max 1 week).

In case you want to start a company remotely (without visiting Estonia) - it usually takes 2-3 weeks additional time and involves some additional costs.

Registration for virtual currency services license

After the company is registered and we have received from you all the required information and documents mentioned above, we can do the rest of the job and apply for the license.

The process of an application

An application for activity licence shall be processed by the Financial Intelligence Unit (FIU) by granting or refusing to grant the activity licence within 30 working days as of the date of submission of the application.

During the process FIU has the right to request additional information and explanations about the planned activity. License will be issued after all required information is considered sufficient and all of the conditions are fulfilled.

Real results of license registrations

Currently we have succeeded to get above mentioned licenses
registered in ca 2-3 weeks with a 100% success rate.


Bank account opening for cryptocurrency companies

Clarity and transparency requirement

There are several options for a bank account opening. The KYC process related to cryptocurrency companies is more demanding, but otherwise accounts are opened if there is enough clarity and transparency. Currently, as a rule, Estonian banks do not open accounts for cryptocurrency companies.

Positive track record

We have already successfully opened some accounts for cryptocurrency companies in other EU banks. If everything is fine, then with high probability an account will be opened. However, we can't guarantee a positive result, as it depends on all details and how the client co-operates during the KYC process.


Taxation of cryptocurrency transactions in Estonia

Taxation of virtual currency transactions depend on the nature of the transaction. There is no direct taxation if the token is sold or bought similar to security or investment or other currency. 

Regular sales

Sales are counted as normal/regular, even when payments for goods and services are received in virtual currencies. For accounting purposes the transaction must have the value in EUR and VAT rules apply as per usual/normal transaction. Payments for goods or services in the form of virtual currency does not free you from following VAT rules. If VAT is applied in FIAT currency payments, then it should be applied in virtual currency payments as well. VAT returns must be submitted in EUR and VAT will be paid/returned in EUR.

Read also Link
About corporate profit taxation in Estonia you can read here: Link


Token types. White paper and Investment fund

Security tokens

The FSA stated that tokens

  1. Whose owners have a reasonable expectation of future cash flows (profit)
  2. Which guarantee certain other rights in the issuer
  3. Which are acquired for other purpose comparable to investing
  4. Whether the issued tokens are freely transferable and tradeable on the capital market (this criteria should be analysed if previous points are fulfilled)

are likely to qualify as financial instruments (i.e. security tokens).

Utility tokens

In accordance with the Financial Supervision Authority’s (the FSA) opinion, tokens that do not promise any profits or monetary claims and only provide an access to some platforms/systems/rights to use products or services, qualify as utility tokens.

Investment fund

The FSA provided that depending on the specific structure and objective of an ICO, the Investment Funds Act (IFA) may be applicable – for example if investors’ capital is raised in an ICO with the aim of further investing it in accordance with the determined investing policy for the benefit of the investors and in common interests.

Investment services are, for example, the following:

  • issue or sale of securities;
  • organizing an offer or issue of securities;
  • provision of investment advice;
  • reception and transmission of orders related to securities;
  • securities portfolio management.

White paper

If the company is going to issue only utility tokens, use of words like investor and investment in the WP is forbidden in accordance of the Advertising Act. Also, misleading commercial practices are forbidden in respect of consumers, therefore all promises must not be misleading.

In accordance with the Consumer Protection Act a commercial practice is deemed to be misleading if it contains false information or if presentation of factually correct information deceives or is likely to deceive the average consumer and in both cases as a result of it the average consumer makes or is likely to make a transactional decision that the consumer would not have made otherwise.

Therefore, we recommend replacing phrases like “banking feature”, “banking service” etc with more neutral expressions, because banking is regulated area in Estonian and is subject to authorization and supervision of the FSA.


Inquiry forms for cryptocurrency companies

Fill in the relevant form and get a fee estimation