Estonia is home to several crypto-related businesses. The country offers fair regulations, a favourable business environment and a unique tax regime. Further, almost every aspect of establishing and managing an Estonian company can be done entirely online, from anywhere in the world, thanks to the e-residency programme. From the 1st of July 2020, with the new Estonian AML Act, a few things will change.
The Estonian Financial Intelligence Unit (FIU) is the body who is responsible for licensing the crypto-companies in the country. According to the Estonian Ministry of Economic Affairs and Communications, as of the 31st of May 2020, FIU has granted more than 1,700 virtual currency-related licenses.
The long-announced amendments to the Money Laundering and Terrorist Financing Prevention Act have been passed at the end of 2019 and came into force in March this year, and affect both the companies that apply for a license and those whose license has been granted under the previous regime.
Here we answer some of the most frequently asked questions on the new Estonian AML Act.
FAQ on the new Estonian AML Act
Are still issued two separate licenses? One to operate as a virtual currency wallet service provider and one to operate as a virtual currency exchange?
No. Under the new regulatory framework, FIU grants a “Virtual currency service provider” license, that merges the existing forms of the licenses into a single one.
What’s the timeframe to get a license?
Under the previous regime, the application processing time limit was 30 working days. Now, FIU must make a decision within 60 working days, and can be extended to up to 120 days.
What’s the deadline for complying with the new requirements?
Companies who have licenses will have a transition period until the 1st of July 2020 to implement the upcoming changes.
What’s the minimum share capital requirement for a virtual currency service provider?
The share capital minimum has been increased to 12,000 euros (instead of the standard 2,500 euros for an Estonian LLC.) The share capital must also be fully paid by the shareholders.
Is a bank account necessary for obtaining or maintaining a license?
The company must provide FIU with the list of payment accounts kept in its name, along with each payment account’s unique feature and the account manager’s name.
Can an Estonian virtual currency service provider be managed by foreigners?
Under the new law, the management of the company must reside in Estonia. This means that at least one of the members of the board is an Estonian resident.
Can an Estonian virtual currency service provider be owned by foreigners?
Yes. The entire share capital of the company can be owned by foreigners.
Take part in our webinar
Do you want to find out more about the new Estonian AML Act? We talked about the new regulations and their impact on new and existing crypto businesses during a webinar, on the 4th of June. If you missed it, you can watch its recording below.