Cryptocurrency regulations in Estonia 2025

WHAT KIND OF ACTIVITY REQUIRES CRYPTO LICENSE IN ESTONIA

In Estonia, virtual currency related services must be licensed.

Virtual Currency Service is a service defined in subsections 3 (10) and 10 (1) of the Money Laundering and Terrorism Financing Prevention Act (AMLA).

Data services:

• Virtual wallet service that generates or stores encrypted client keys that can be used to hold and transfer virtual currencies;
• Service of exchanging a virtual currency against currency: A service whereby the customer trades virtual currency against currency or vice-versa or one virtual currency against another shall.

Virtual currency means a value represented in digital form, which may be transferred, stored, or sold electronically and accepted as a means of payment by natural or legal persons, but does not have the legal status of a currency or money and is not issued or guaranteed by any country or is otherwise a financial instrument for the purposes of any of the following: Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, p. 35-127) within the meaning of Article 4(25) or a payment instrument or transaction within the meaning of Article 3(k) or (l) of this Directive.

This is so because the license application must be done precisely, with a view to providing a virtual money wallet service legally, which subjects companies, within the scope of offering such a service, include storing virtual currencies belonging to third parties. It’s through this that the company has data about and control of the various transactions being conducted in wallets belonging to customers.

APPLICATION PROCESS OF A LICENSE FOR VIRTUAL CURRENCY SERVICE PROVIDER IN ESTONIA

Application for the cryptocurrency license in Estonia is submitted electronically on the State Portal mtr.mkm.ee.

A licence application must contain the following information:

REQUIREMENTS OF AN APPLICANT

To obtain a licence to operate, an undertaking must satisfy the following requirements of a licensed establishment:

• A company, its director of management, prosecutor, beneficiary, and owner shall not be legally convicted for an offence against the State, for money laundering, or other deliberate offence.
• The company, its management body member, the prosecutor, the owner who is the beneficial owner, and owner have proper business reputation. The licensing authority shall evaluate the existence of proper business reputation, considering the person’s previous activities and circumstances. Good business reputation shall be presumed as long as there are no circumstances to doubt it.
• Contact person means a person of confidence appointed by an undertaking in accordance with Article 17 of the RahaPTS money and satisfying following conditions: Only a person who has necessary education, abilities, personal qualities, and experience and impeccable reputation of contact person may be appointed contact person.
• This includes any subsidiary for which the enterprise considers it desirable for the licence to operate on behalf of itself.
• The legal address, board, and business of an enterprise applying for a licence in the sphere of activity of a virtual currency provider must be located in the Republic of Estonia, or the foreign company operates in Estonia through a branch registered in Estonia. Estimating, for example:
• The seat of the Council is determined in the residence or/and citizenship of its members. The Council member shall be a resident or citizen of Estonia, or another proof of residence of the Council. It must coincide with the place of activity referred to by paragraph 2 of Article 29 of the Law on the General Part of the Civil Code, namely, the legal entity’s place of activity, meaning the place of carrying out permanent and long-term economic activity or other legally prescribed activities. The place of activity cannot be a place in cases where the provision of virtual currency service is not possible on the site or it’s impossible to meet the requirements of RahaPTS. This would, in practice, mean that any person in charge of ensuring RahaPTS compliance has fieldwork, direct access to compulsory RahaPTS data that a person is obliged to collect, store, and present to the supervisory authority, as well as to the application procedure, risk assessment, internal control rules, and other possible additional documents, in order to secure the fulfillment of the requirements of RahaPTS by the person concerned and its employees.
• It should also allow the Financial Intelligence Unit to apply, when applicable, the corresponding supervision, including on-site. Virtual providers of foreign exchange services are hereby summoned to annex, upon registration in the commercial registry, a document evidencing the right of use over place and premises of business, such as a lease or rental contract.
• Further, it involves possible direct access to obligatory data obtained through the RahaPTS system, which the person concerned is obliged to collect, store, and provide to the supervisory authority. Regulations, risk assessment, internal control rules, and other possible additional documents are attached. The enterprise applying for a licence in the sphere of activity of a virtual currency provider must have an open payment account in a credit institution, electronic money institution, or payment institution: established in Estonia or the Contracting State of the European Economic Area and providing cross-border services or opening a branch in Estonia.
• The application for the licence to conduct activities in the Register of Economic Activities, for which the credit institution certificate, electronic monetary institution, or a payment institution confirming the existence of a payment account must be attached, shall be submitted with all available payment accounts.

What information does FIU pay special attention in the process of obtaining a cryptocurrency license in Estonia:

• Source of authorized capital of providers of virtual currency service.
• Data about the criminal record of the enterprise and persons related to it, participation in various proceedings: criminal, offence, administrative, bankruptcy, etc.
• Education and experience of the individual people, their relation to entrepreneurship.
• The Financial Intelligence Unit is further authorized, under Act § 54 para 11 and § 58 para 1, Money-laundering, to request information from other public bodies; similarly from third parties, as provided for and in the context of the international exchange of information, under Law § 63 on money-laundering.

Changes in Estonian legislation forthcoming

The Bill aimed at enhancing the stringency of the virtual currency service provider requirements was supported by the Government in order to reduce the financial crime risks. It also provides, inter alia, for an activity license in the future only for those service providers who plan to work in Estonia and data of clients is also required to be linked to the transactions.

In the field of virtual currencies, the risks have grown very fast over recent years, and it has required us to act quickly,” said the director of the financial intelligence unit Matis Mäeker. According to him, one of the most important changes will be making crypto transactions less anonymous for the purpose of making it more transparent and the business environment easier to monitor. If in the future a virtual currency translation or exchange service is provided, the identity of the user has to be identified. Let the personal data be enabled to converse with the transaction, like bank transfers. If the purse of the recipient doesn’t contain service provider or is unable to receive data, real-time monitoring of the transaction and the risk analysis of each is to be needed.

The requirements are similar to those applicable with respect to the movement of money through banks and payment institutions. Virtual currencies are also used mainly for paying or transferring value, i.e., as an exchange currency-for example, buying services. Data collection and sharing go a long way in reducing the risk of financial crime. It has been one of the recommendations extended from the rules to the Virtual Currency Service Providers by FATF, which is an international standard to prevent money laundering and the financing of terrorism.

Under the present act, it is possible to obtain an operating permit in Estonia by operators coming from outside of Estonia, where such operator has nothing, in actual terms, to do with Estonia, while supervision of the actual beneficiaries seeks-for example-proportionate resources. The risks, however, thereby are shifted at the expense of the reputation of law-abiding service providers, whose communication with foreign partners may turn out to be difficult.

In respect to the project, in the future the FIU may refuse to issue a license for virtual currency services once it turns out that the enterprise does not intend to work in Estonia or its business is not connected with Estonia. According to the project, the operating licence is non-transferable. Trading opportunities with authorized companies will be limited: trading eligible holding will, in the near future, be restricted within the first two years of its operation. Providers Those providers who, in bulk develop virtual currency service providers and then resell them to third parties. The change is meant to avoid a situation whereby an enterprise immediately after getting a license is resold to a person not worthy of the license. Besides that, the project will promote capital requirements that will enhance the responsibility of companies and ensure licensees are active companies. In the case of founding a new company with the aim of operating an e-foreign exchange service provider, the share capital, depending on the concrete activities provided, is to be EUR 125,000-350,000. Licence holding companies will also be obliged in the future to provide own funds. Currently, the minimum limit of the authorized capital is EUR 12,000.

It should be able to comply with the capital requirement for an average virtual foreign exchange service provider, taking into account that the average turnover of a company working in this field is estimated by the FIU at 80 million euros per year.

Drafts have been prepared, and proposals are presented by business organizations and experts in this process, among them Estonian Virtual Currency Association, xChange AS virtual currency service provider, IO and IT Law Committee of the Estonian Bar Association, and Estonian Chamber of Commerce and Industry.

Updated Requirements for Cryptocurrency Companies in Estonia for 2025

ESTABLISH A CRYPTO COMPANY IN ESTONIA

The Estonian government has lately improved crypto legislation that emphasizes business reliability and transparency. Although it comes with steep crypto license application fees, this jurisdiction has retained its attractiveness based on benefits such as a stable business environment, Corporate Income Tax exemption on undistributed profits, state-of-the-art public e-services, and e-banking, including widely adopted digital signatures for faster business transactions.

Other obvious key benefits of the Estonian business environment include the following:

• Among the most politically and economically stable, yet at the same time developing and progressive countries in CEE; an EU, OECD, Eurozone, and Schengen Area member that is trusted.
• Estonia holds 13th place out of 180 countries according to the Corruption Perception Index 2021, making it one of the most transparent and least corrupt countries.
• Estonia is 7th among 177 countries in the 2022 Index of Economic Freedom, with measures based on judicial effectiveness, tax burden, regulatory efficiency, investment freedom, etc.
• Estonia ranks 18th out of 190 countries in the World Bank Ease of Doing Business 2019, making it an attractive business environment for establishments.
• Estonian Wi-Fi is ranked the 22nd fastest in the world.
• Highly qualified labor that is very well-prepared and motivated to drive your business forward.
• Licensed Estonian crypto companies can provide their services outside of the country without needing to apply for a new license, provided they can meet the requirements reinforced by foreign authorities.
• With the E-Residency card of Estonia—a governmental ID card for digital signing—remote company formation is possible. The application fee is 120 EUR.
• The Estonian company registration portal is the fastest in the world.

The main source of legislation related to company law in Estonia is the Commercial Code. No special requirements have been provided for foreign investors, which provides equal rights and obligations to all non-Estonian entrepreneurs as for Estonians.

They are maintained by the Centre of Registers and Information Systems (RIK): The public register of the Estonian companies. Here, all the legal, public information on Estonian companies is available.

Legal Form for Crypto Business

To become a fully licensed crypto business in Estonia, one needs to establish a Limited Liability Company – OÜ. The advantages are as follows: flexible governance arrangement; no residency and citizenship requirements for founders and directors; no personal liability of the owners concerning debts and liabilities of enterprises. The extent of his/her obligation is determined by the contribution of each shareholder.

Main members of the Limited Liability Company OÜ:

• Founder — company’s very first owner that does not change
• Shareholders, or owners — shareholders of the company’s shares. Shares can be sold, which means a change in ownership.
• Board of directors or board members — representatives of companies. Owners of companies can be appointed as directors.

Requirements for Limited Liability Company OÜ:

• Operating under the national legislation, the name has to end with an abbreviation OÜ.
• At least one founder, who can be a natural or legal entity.
• At least one shareholder of any nationality.
• Minimum share capital 100,000 EUR – share capital must be paid only in fiat money, not cryptocurrency.
• Minimum nominal value of the share and lowest share capital may be 0.01 EUR.
• The share shall be paid in fiat money in case bylaws don’t indicate contributions in kind.
• Obtain an Estonian-registered office where crypto activities shall be performed.
• Open a crypto-friendly corporate bank account in Estonia or the EEA.
• Board members to represent the company may be e-residents in order to manage the company remotely. If all the company directors are e-residents, then it will be obliged to hire a local contact point, which shall be contacted upon receipt of documents from the Estonian authorities.
• Hire a local accountant.
• Appointment of an AML/CFT compliance officer

Documents to be filed:

• Memo of association
• Articles of Association
• Copies of identification documents of founders, shareholders and directors
• A business plan showing a business model proving business sustainability
• Confirmation of office address in Estonia – a residence address is not allowed
• Founders, shareholders and directors of a company receive certificates confirming the absence of a criminal record

The memorandum of association shall be developed, which shall include the following information:

1. the name of the company;
2. the legal address;
3. the names and addresses of actual residence or registered offices of founders;
4. the estimated amount of equity capital;
5. the nominal value and number of shares, including their division among the founders;
6. the amount payable for shares, order, time and place of payment;
7. If any share is paid for in-kind contributions, then it should be specified clearly, describing the valuation method of such a share.

Information about the Board:

• Upon the creation of the Observatory, its members
• Where necessary, prosecutors or auditors
• Forecast expenditure of funds and mode of payment

The bylaw should include the following:

• Denomination of society
• Registered office
• The amount of equity, which may be specified either in absolute terms, or as minimum and maximum capital – the minimum capital must be at least one quarter of the maximum capital
• Specific methods of paying for the shares
• Specific rights relating to a share or shareholder; if there are different classes of shares and rights differ, then the different classes of shares names, along with specific rights relating to each class of share, are specified
• If a share is paid for in-kind contributions, then that should be specified, and its method of valuation clearly described
• Formation and extent of legal reserve
• Where there is to be a board of directors and a supervisory board, the number of members shall be laid down, such may be in the form of an absolute number or maximum or minimum as well as – if need be – with specifications of the right of the board members’ representation

Other compulsory statutory provisions:

All documents are to be filed in the Estonian language. Documents in a foreign language shall be filed together with sworn translations into Estonian. If you need a sworn translator or notary, please do not hesitate to contact us, and we do our best to find the optimal solution for you.

Provisions concerning non-monetary or in-kind contribution:

• It can be all that may be directly valued and transferred to the Private Limited Company – OÜ and what may be a subject of a claim.
• This cannot be any service or work provided to the company or the activity of the founders in establishing the company.
• The shareholder has to declare the rights of thirds about the non-monetary contribution.
• When at the date of filing in the Commercial Registry of the company, or – in the case of an increase in share capital – the effective value of the contribution in kind is lower than the nominal value of the share obtained due to the contribution, or to be increased, the société may charge the shareholder the monetary supplement of the amount that the value is lower than the nominal value in fiat money.

Estonia

Capital	Population	Currency	GDP
Tallinn	1,357,739	EUR	$29,344

What to Do

To incorporate a company in Estonia, either use the e-reserve card, which will enable us to register your company online, or sign the power of attorney given to the representative. That enables him to act on our behalf, or that can be done directly by you in Estonia, where you go and do all the formalities.

If all the legally required documents meet the requirements and are filed, registration may take up to a week.

To open an OÜ, the following activities shall be performed:

• Check your company name and reserve the name in the Commercial Register
• If needed, sign Power of Attorney
• Sign the lease agreement for your local office
• Open a corporate bank account in the name of the company and pay the minimum equity prior to the crypto license issue
• Submit an application for registration, along with the respective notarized documentation to the Commercial Register
• The registration fee amounts to 265 EUR
• At the time of registration in the register, the company will be given a registration code
• Registration to the Estonian Social Insurance Board — ENSIB
• Limited hiring
• Application for a cryptography license with the Financial Intelligence Unit, FIU – authority that leads anti-money laundering functions in Estonia

The Tax and Customs Office will have your company automatically added as a taxpayer from the register of companies and businesses. You will be required to obtain a tax identification number for your company only.

Under the new policy, only licensed crypto companies can operate in Estonia. For a license that has an indefinite term, an entrance fee of about EUR 10,000 needs to be paid. FIU issues a license within 6-12 months if the AML requirements are rightly met.

Each applicant considered successful is accorded the status of a financial institution and hence is under obligation to conform to the same rules and reporting requirements that apply to every other financial institution in Estonia.

Also, in case you would like to make any changes in your crypto business after the license issuance, be ready to pay the state charge of 4000 EUR for license update, and only after approval by the authority, restart your business activity.

Taxes of crypto companies in Estonia

Incorporation of a crypto company in Estonia immediately means it is a tax resident. This means that by default, it automatically goes to the list of Estonian taxpayers. The only thing that has to be registered separately is VAT.

Estonia has not yet introduced any crypto-specific taxation framework, which means crypto companies at present are taxed like everybody else. Estonian taxes are collected and administered by the Estonian Tax and Customs Board (ETCB).

Taxation standards in Estonia:

• Corporate Income Tax (CIT) – 0%-20% under the Income Tax Act
• Social Tax – 33% under the Social Tax Act
• Value Added Tax (VAT) – 20% under the Value-Added Tax Act
• Withholding Tax – 7%–20% under the Income Tax Act

No Corporate Income Tax is levied on the retained and reinvested corporate profits, which is an advantage to growth-oriented crypto companies. In other words, in the case of your crypto company not distributing dividends, you will be exempt from the tax. Resident companies are taxed on their worldwide income; however, non-resident companies are taxed only on income sourced in Estonia.

The social tax shall be paid by resident companies, by non-resident companies whose permanent establishment is located in Estonia, and by non-resident companies who make payments prescribed in subsection 1 of section 2 of the Social Tax Act.

Registration for VAT is not obligatory unless your business reaches an annual turnover threshold of 40,000 EUR. It has three business days to register as a VAT payer once the company has exceeded the threshold. Whatever the day of registration will be, it shall be obliged to pay the VAT from the moment the threshold was exceeded. The speed at which reaching the threshold occurs may differ depending on the nature of the company’s activities: not every crypto-related economic activity is liable for VAT. The European Court of Justice decided that buying and selling cryptocurrencies are exempt from VAT.

The tax rate of the Withholding Tax varies according to the nature of the payment (services, fees, interest, royalties, etc.). Dividends are exempt from tax, but the reduced rate of 7% is charged with regard to dividends paid out to residents and non-residents if the distribution has been taxed at the reduced Corporate Income Tax rate.

Among other tax allowances, Estonia has more than 60 international agreements on the exclusion of double taxation that may allow your crypto business to guard your income from being subjected to tax payments in two different countries.

Our strong and energetic team from Regulated United Europe is going to help you set the stage for success with all-round legal advice for the formation of a company, licensing, taxation, and professional financial accounting services in case one is going to create a crypto company in Estonia. In case you have any questions or would like a bespoke quote, please do not hesitate to contact our experts today.

We also offer a virtual office service that replaces the necessity to invest in expensive office rentals, equipment, and personnel. This is a good solution for small companies that are ready to create a professional image with access to such physical office functions as a business address, meeting facilities, and reception while minimizing costs and retaining the benefits of remote work. Query about our virtual office now.

Also, lawyers from Regulated United Europe provide legal services for obtaining a crypto license in Europe.