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Obtaining Estonia Cryptocurrency License 

 

Estonia issues 2 types of cryptocurrency licenses for companies that are engaged in virtual currency exchange:

  1. A license issued to providers who trade cryptocurrency against Fiat Currency.
  2. A license to operate a virtual currency Wallet service.

On November 27, 2017 the Estonian Parliament modified the Anti-Money Laundering Act and Terrorism Finance Act. Operating licenses are therefore issued by the Estonian Financial Intelligence Unit (FIU) – an independent unit operating under the supervision of the Estonian police department and the Border Guard Board.

When applying for a cryptocurrency exchange license in Estonia, the proper application form, along with additional documents and pertaining information, ought to be completed and submitted to the Register of Economic Activities.

 

Required Documents

As a rule, all the following required documents ought to be authenticated with an apostille.

  • Certificate of (Non) Conviction from the National Criminal Register for the following: shareholders, board members, ultimate beneficiary owners, management and key personnel.
  • CV’s of all the above
  • Present Rules of Procedure for Anti Money Laundering (AML) purposes.
  • Description of strategic planning

 

Procedure for Obtaining Estonia Cryptocurrency License

An Estonian company has to be the one conducting the cryptocurrency license application process. Once the registration of a local company is concluded, a small fee has to be paid; all the aforementioned required documents can then be sent to the Register of Economic Activities.

The Estonian Private Limited company (also known as Osaühing or OÜ) is the prevailing form of business in Estonia. With Osaühing or OÜ, company owners carry no proprietary liability, therefore having no personal responsibility over company debts.

Our company will provide you with all the necessary help throughout the cryptocurrency license application process, gathering the legal documentation and submitting the application form in an orderly and efficient manner. Once the application was processed by the Register of Economic Activities—and after we retrieve all legal documentation back to your possession—it takes an additional week for the Register to bring their database  up to date, presenting the new shareholder(s), board member(s) and relevant company information.

  

Additional Information to Be Taken in Consideration when forming a new Estonia company: 

  • With any private limited liability company that is established in Estonia there is a requirement for a share capital of minimum of 2500 EUR. Additionally, a private limited company that is established in Estonia may not sell its shares to the public.
  • Since the prevailing form of business in Estonia is private limited liability company, shareholder(s) or founder(s) have no proprietary liability, or, in other words, no personal responsibility, over company debts. The financial liability of the company’s shareholders amounts to a fixed sum – commonly established in accordance to that person’s investment in the company.
  • If the Estonian company has a VAT ID or uses regular salary payments, monthly accounting is in order. Under any other conditions, a submission of an annual report is sufficient – submitted within 6 months after the end of the fiscal year.
  • There can be either one or more founders or shareholders of a private limited company that is established in Estonia, having the status of either a resident or a non-resident of the Republic of Estonia.
  • Company incorporation documents must all be signed before a notary and in the presence of the company’s Board of directors and its founders.
  • The company’s Board of Directors can consist of one or more members, who must be “natural persons”. Members of the management board are not required to additionally be part of the company’s shareholders. However, it is mandatory that at least 50% of the management board members will be resident of the European Union, Switzerland, Norway, Iceland or Lichtenstein.
  • According to Estonian regulations, any private limited company ought to have a supervisory board, when its share capital is larger than 25,000 EUR, the company’s management board has less than three members, or, if such specification appears in the company’s articles of association.

 

Related keywords: Estonia bitcoin ,bitcoin Estoniacryptocurrency license Estonia, Estonia cryptocurrency license, Estonia company formation

Obtaining an Estonian Cryptocurrency License 

We provide assistance with services relating to banking and licensing for Fintech businesses operating in the fields of: 

  • Online cryptocurrency exchange platforms 
  • Platforms that provide exchange facilities for virtual currencies to Fiat currencies. 
  • Holding and storage of digital currencies for third parties 

Requirements for Obtaining a Cryptocurrency License 

Regardless of the jurisdiction you plan on operating under you will need to obtain a cryptocurrency license in that jurisdiction. No matter where you obtain your license you will be required to supply the local financial services authorities with the relevant documents. We have listed the basic requirements for obtaining a Bitcoin license including corporate and personal documents. 

You will need to supply: 

  • A comprehensive business plan including all aspects of planned endeavors for the coming two years; the scope of the activities and the planned means to be employed in carrying out these projects.
  • A detailed description of operational, risk and compliance software.
  • Background information/CV for the principals of the company
  • Specifics about the source of invested capital
  • Website address
  • Legal documents of each of the company’s principals including: notarized copies of passports, latest utility bills, Police Clearance Certificates and other personal documents of the company owners.

Advantages of a Regulated Cryptocurrency Company 

Transparency – No matter where your company is registered the jurisdiction regulators keep a record of all company operations including liquidity, legal status and more. Crypto Bitcoin traders can easily go online and verify the legitimacy of your company and check that it has no previous serious disputes with clients or the regulators or hidden agendas. 

Security – Bitcoin licensed businesses are required to protect their clients’ funds by holding them in segregated accounts, independent from the company corporate bank account. By taking this precaution the company insures that: 

  • Clients’ funds are protected and the company will not be able to close their business and abscond with the clients’ funds. 
  • The company is unable to use clients’ funds interchangeably – transferring one client’s funds to another client’s account. 

Increased Credibility – A company holding a cryptocurrency license from a reputable jurisdiction is conceived as more reliable and credible. Traders and employees alike view a licensed cryptocurrency company as more trustworthy. 

Dispute Center – Licensed cryptocurrency companies have to abide by the rules and regulations of the jurisdiction where they were registered. In the event of a dispute arising the regulator will investigate the complaint against the Cryptocurrency company and decide if the complaint is justified. If the complaint is found to have merit this can affect the status of the company’s license and even, in some cases lead to sanctions, fines and the cancelation of the broker’s license.  

Gibraltar to be one of the First Jurisdiction to Establish a Regulatory Frame for the Cryptocurrency Industry 

Recently Gibraltar’s Financial Services Commission has announced that the jurisdiction plans to legislate regulations pertaining to the cryptocurrency industry. The new legislation will cover commercial use of DLT (Distributed Ledger Technology) for transmitting and storing of “value” (including cryptocurrencies). The new laws will apply to activities not covered by other forms of regulation including storage of digital assets for others, mining and exchanges. The first phase of the new legislation will come into effect in January 2018. During the coming year additional legislation will be introduced covering companies offering ITO/ICO/Crowdfunding investment opportunities.  

It is important to remember that license application is a complex process and successful obtainment of a license is not guaranteed.  

Note: Companies applying for a cryptocurrency license must be a resident company and abide by the principles of transparency. Companies must also have a legitimate technical background and business history to meet the “fit and proper” assessment test. 

2018-04-22T05:47:25+00:00