Estonia is a small country located at the heart of the Baltic Sea Region - Europe’s fast growing market of nearly 100 million people. Attractive location between East and West, an excellent business environment, stable government and liberal economic policy, moderate costs and the ease of doing business have already attracted numerous international companies to Estonia. Estonia’s economic freedom is among the highest in the world.

Estonia is the first e-government in the world and offers e-residency to people from all over the world. Some of the recipients of the Estonian e-residency include Angela Merkel and Barack Obama. This country has declared internet access a human right, it has a thriving IT start up culture and has digitally streamlined an unprecedented number of public services for citizens and businesses.

In 2017, Estonia adopted a legal framework for crypto currencies and introduced the Crypto Exchange & Wallet License and became the first country to start issuing crypto licenses. Over the years, Estonia issued around 4000 of crypto licences, which allowed hundreds of companies to get an Estonian license very easily and operate anywhere in the world.

However, in the recent years Estonia has tightened its laws and the Regulator became reluctant to issue new licenses. Now only more than 300 crypto licenses remain. Companies with Estonian crypto licenses must comply with the local substance requirements which include:

• physical office in Estonia;
• local AML officer;
• local management board member;
• appointment of an auditor;
• record keeping according to AML/KYC rules. 

Moreover, licensed companies must use high-security technology in identifying and verifying identity through information technology within KYC framework. 

Overall, now Estonian companies holding crypto licenses are subject to closer scrutiny by the Regulator for the purpose of preventing fraud and protecting reputation of the jurisdiction.