License for BTC sale – currency exchange and wallet

A simple recipe for starting a business based on cryptocurrencies. Whether you are creating a wallet in which to store your clients’ money or a money exchange – it doesn’t matter. We will help you in 30 days to start with cryptobusiness. Read why in Estonia?

Establishment of OÜ

The first step will be the establishment of an OU company under Estonian law. The law indeed allows you to apply for a license to sell cryptocurrencies to foreign companies outside Estonia and branches of these companies registered in Estonia, however, according to our experience – 97.9% success rate applies to OU companies registered in Tallinn.

And here we have the choice to register the Estonian company by:

  • e-Residency card – you place an electronic signature on the application that we send on your behalf to the Tartu registration court – RIK
  • you come to Tallinn and together we go to the notary
  • POA – Power of Attorney – you grant a power of attorney in your country of residence – you send a power of attorney in the form of a notarial deed to Tallinn by UPS or DHL – and our lawyer goes to a notary public and registers the company as a proxy on your behalf – we send a set of documents to you by courier

If you do not want to wait, you have the option of buying OU, and the options are as follows:

  • Purchase of the finished OU company without a license
  • Purchase of a ready company with a crypto license – but more on that later

Completing license documents

Before we even try to apply for license registration – we must realize that this is not an automatic process and every company is thoroughly checked.

Not only the company, but also its management, shareholders and so-called beneficial owners (BO) and also – UBO – Ultimate Beneficial Owners. I will not write about the meaning of individual terms. Simply for the market regulator – the Financial Intelligence Unit (FIU) it is important who is in the board of directors and who has actual control over the company (who has more than 25% of votes at the shareholders’ meeting)

Documents that will be required to grant a license:

  • Criminal record certificate from the National Criminal Record (KRK) – in paper form obtained at the Information Point or by correspondence translated sworn into English or Estonian (by Estonian – there is no such sworn in Poland – market niche )
  • True copy of a passport or ID card with a sworn translation into English or Estonian
  • CV of the person who represents the entity
  • Responsible person who will deal with AML / CTS prevention – anti-money laundering – so-called MLRO person – it can be the same person who is on the board – we recommend taking a series of e-learning trainings regarding AML / CTS / KYC

License types and release costs

We have 2 types of licenses issued by FIU to cryptocurrency dealers:

  • providers of a service of exchanging a virtual currency against a fiat currency – here the matter is clear – it is about running a crypto exchange office for FIAT and vice versa
  • providers of a virtual currency wallet service – this is about managing crypto client portfolios

For each license we have to pay 345 € state fee – fee due to FIU. Processing time up to 30 days from the moment of its submission. In our experience, FIU deals relatively quickly and the procedure is like this – they either call for corrections or issue a license.

The time to obtain a license based on our experience is from 15 to 25 days. We are currently trying to complete all documents first, and then submit the application so that FIU has no objections.

AML internal policy

This document for 30-35 pages A-4 in Estonian – is such an internal procedure that is required by Estonian legislation – Money Laundering and Terrorist Financing Prevention Act – you can read it here.

This is the most important document that will allow you to obtain a license, but it will also be a signpost for the entrepreneur not to violate the act – since breaking this act and wrong customer identification, as well as a wink at AML / CTS cases can cause criminal liability on the side of the entrepreneur and millions penalties in EURO.

Thus, such internal policy is pursued by our trusted lawyer, who for 10 years created such documents for the largest banks and non-bank institutions – finetechs. He is a person familiar with the specifics of new technologies, in particular block chains. The AML policy is sent to the State of acceptance, then for FIU acceptance and is accepted or FIU calls for corrections.

Bank account

Estonian banks are not prepared to service customers who sell cryptocurrency – even though Estonian legislation with open arms favors block-based businesses.

Of course, we help in opening a bank account in banks such as: LHV PANK (Estonian capital), SWEDBANK (Swedish capital), but the subject of activity – it can not be crypto.

Such an account can be opened for ancillary activities. For crypto we offer you two options:

  • opening a bank account in the EU / EEA country in a bank that is friendly to cryptocurrencies – with Apostille documentation, sworn translations
  • opening additional PSP – Payment Service Provider accounts – non-bank institutions that accept cryptocurrency clients – such solutions are available in Latvia and Lithuania.

Taxes, taxes – nobody wants to pay them

In Estonia, the most important advantage in terms of income taxes is their deferment until the distribution of profits. What lies under the concept of profit distribution? For example, dividend payments.

Who pays dividend in Poland from a limited liability company? Nobody with healthy senses! Why? Because to pay dividends – you have to pay CIT and then 19% on profits – who wants to pay 38% tax? People who work full time – certainly not entrepreneurs.

Entrepreneurs want to invest, and Estonia is like a third pillar – like pension capital plans – you will not pay it out of the account – there is no tax. From year to year – without time limits. 

Estonia is therefore for investors – including investors from passive sources – investment funds, speculative activity based on the sale of shares, as well as for activities related to cryptocurrencies.

The procedure for obtaining a license

The procedure for obtaining a license is as follows:

1. Establishment of a limited liability company in Estonia (Osaühing, OÜ) with share capital of EUR 2,500 – it is not necessary to pay it at least until there is a dividend distribution from the company.

2. Preparation of applications for license registration.

3. Providing the required documentation (CV of the responsible person, certificate of no criminal record)

4. Participation in training with AML – via Skype.

5. Possible arrival in Tallinn for an interview with the Financial Intelligence Unit (we provide airport pickup + interpreter).

Source:

Elina is New York based writer and media consultant. Currently she is involved as an advisor in several ICOs. In addition to her professional interests, she loves jazz, modern art, coffee, and yoga.

 
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