As cryptocurrency continues to establish itself as a profitable sector with plenty of room from growth, more and more jurisdictions are getting on board and legislating in favour of this dynamic industry. Estonia is one of them.
Rated as one of the best market-based economies in the world, it provides a friendly environment for foreign investment and favourable in-country benefits for those with a physical presence there. It’s close to idea landscape for startups, it is becoming more and more popular with those looking to start crypto and blockchain businesses.
In late 2017, the Estonian government made it possible for those wishing to operate a cryptocurrency exchange to gain a license. It was in fact the first country in the European Union to introduce such legislation, making it something of a pioneer and resulting in a dramatic rise in foriegn investment.
To be able to operate a cryptocurrency exchange in Estonia, the operator has to apply for and be granted a crypto currency exchange license from the authorities. The Estonian cryptocurrency exchange license applies to transactions with digital currencies that can be then converted into fiat currency. For example, bitcoin or ethereum which can be transferred into other cryptocurrencies or fiat currency such as dollars, euros, or pounds.
When compared to other cryptocurrency licenses, the Estonian license is considerably cheaper and can be acquired in around six weeks as long as all documentation is in order. Estonia is rapidly establishing itself as a leading jurisdiction for technology, IT and innovative industries which are supported by its simple crypto license process.
Other advantages of the license include corporate tax exemption on profits that are reinvested, a low 14% tax on dividends paid to legal entities and 0% tax on all capital gains, options for e-residency card, quick set up of an EU bank account, and no restrictions on citizenship or residency.
Estonia also makes a great location to set up and launch an ICO or similar vehicle.
To apply for an Estonian crypto exchange license you need to have a local company or branch with EUR 2500 paid up capital, one shareholder and board member (which can be the same person) and three council members. Full criminal record checks and full background information on each individual is required.
You will also be required to satisfy KYC and AML requirements, have a local physical branch, and submit financial accounts every year.
The application process is simple and straightforward and once all documentation, including KYC on all people involved which is in Russian or English with apostille stamps, approval is forthcoming within a short timeframe.
If you are looking to start a cryptocurrency exchange in Estonia, or any other jurisdiction, contact us today to find out more about getting the ball rolling.