Analyzing Crypto Licensing: Estonia vs. Lithuania vs. Dubai
Feature | Dubai | Lithuania | Estonia |
|---|---|---|---|
Cost | 20 000€ | 20 000€ | 25 000€ |
License Type & Government fee | 1. 9,700€ - Advisory Services & VA Transfer and Settlement Services | 1. Cryptocurrency exchange license
2. Crypto wallet and custodian services license
| 1. Cryptocurrency exchange license
2. Crypto wallet and custodian services license
|
2. 24,250€ - Broker-Dealer, Custody, Exchange, Lending and Borrowing & VA Management and Investment Services | No additional fee | 10 000€ | |
Audit | May be required by VARA | Not required | Monthly and yearly are needed |
Office | Required | Can be virtual | Required |
AML (Anti-Money Laundry Officer) | Can be any nationality | Local needed | Local needed |
AML monthly salary | 5000€ | Starting from 1200€ | Starting from 2000€ |
Local director | Can be any nationality | Can be any nationality | Can be of any nationality, but have to live in Estonia |
Share capital terms | Immidiately | 25% now, 75% within a year.
| Immediately |
Required share capital | 24,250€ (Advisory Services) - 194,000€ (Exchange Services)
| 125 000€ | 100 000€ - Crypto wallet and custodian services license.
250000€ - Cryptocurrency exchange license |
Our Clients
The Digital Hotspot: Estonia
Estonia, often hailed as the Silicon Valley of Europe, was one of the first nations to put a framework for crypto licenses. In fact, they've got one license covering two service areas – one for crypto-to-fiat exchange and another for custody & wallet service providers. The small Baltic country, with its tech-savvy reputation, has opened its arms wide to crypto ventures. But don't mistake Estonia’s welcoming stance for lax regulation. Their watchdogs are sharp as a tack.
-
The Financial Intelligence Unit (FIU) handles all crypto matters. They're the folks who review your application, and their word is law.
-
The requirements for a license are pretty stringent. A clean criminal record, a detailed business plan, and robust anti-money laundering measures are just the tip of the iceberg.
Why Estonia?
-
Quick and efficient process: Once you submit your application, the FIU typically responds within 30 days. Talk about swift!
-
Reasonable cost: A licensing government fee of 10 000€ Euros, which ain't too shabby when you consider the global average.
-
Great tax system for crypto.
Taxation
One of the most tantalizing aspects of Estonia's approach to business, crypto or otherwise, is its unique tax framework. Buckle up folks, 'cause here comes the whopper - Estonia charges a corporate tax rate of 0% on retained and reinvested profits. You heard that right - zilch, nada, nothing.
In the usual hullabaloo of taxes, Estonia stands out like a lighthouse. This essentially means that if a company, including crypto businesses, reinvests its profits or just keeps them in the company's accounts, it won't be charged any corporate tax. It's only when profits are distributed to shareholders as dividends that the standard corporate tax rate of 20% kicks in.
To add to this, there's no capital gains tax on the sale of cryptocurrencies in Estonia. This enticing tax structure can act as a real money-spinner for crypto companies eyeing expansion or reinvestment. All of this can lead to a considerable boost in the potential growth and scalability of crypto ventures.
In other words, it's not just the cool Baltic breeze that's attracting crypto businesses to Estonia. The 0% corporate tax policy plays a colossal role in making Estonia a promising land for crypto pioneers.
The Blockchain Oasis - Dubai
Dubai, often recognized for its skyscrapers and opulence, is emerging as a hotspot for crypto businesses. While not a country in its own right, the Emirate has a certain autonomy when it comes to financial regulation. Their rules? Well, let's just say they're playing hard to get.
-
VARA (Virtual Assets Regulatory Authority), serves as the authoritative body overseeing and regulating the dissemination, application, and trading of virtual assets that either originate from or are distributed within the Emirate of Dubai.
Why Dubai?
-
Geographical advantage: Situated at the crossroads of Europe, Africa, and Asia, Dubai is a great hub for crypto businesses targeting these markets.
-
Business-friendly environment: With its flexible regulations and tax incentives, Dubai could be quite the cash cow for crypto businesses.
The Baltic Beacon: Lithuania
Lithuania, another tech-savvy Baltic country, is carving out a niche for itself in the crypto sphere. The Bank of Lithuania issued guidelines as early as 2017, way before many other countries had even hopped onto the crypto train.
-
Lithuania has a Virtual Currency Exchange and a Custodian Wallet Service license, quite similar to Estonia.
-
Their regulatory body, the Bank of Lithuania, is quite the taskmaster when it comes to compliance and transparency.
Why Lithuania?
-
Clear regulatory guidelines: Their early entry into the game means they've got their rules sorted out.
-
Access to the European market: Being a part of the European Union, Lithuania provides a gateway to the entire European market.
-
Faster country to get crypto licenses in the Europe
Taxation
Lithuania levies a standard corporate tax of 15%, which, compared to many Western European countries, doesn't hit you like a ton of bricks. But for smaller companies with an annual income of less than €300,000, the rate is further reduced to a modest 5%. Not too shabby.
When it comes to cryptocurrencies, Lithuania strikes a fair balance. For individual investors, cryptocurrency sales are considered personal income and taxed at a flat rate of 15%. For businesses, crypto-to-fiat conversions are subject to corporate tax.
However, here's the kicker - crypto-to-crypto trades and crypto mining activities are tax-exempt! This stance, which aims to stimulate crypto-related activities and innovations, could be the music to the ears of many crypto enthusiasts.
Why Consulting24?
500+ crypto license acquired
Consulting24 Team
Mardo Soo
Founder
As the founder of Consulting24, my reason is to be the guiding light for entrepreneurs venturing into the fast-paced world of crypto in Estonia. We're the masters of making the complex simple. Our steadfast dedication to streamlining the licensing process underscores our unmatched position in this global metamorphosis.
Lena Elvbakken
Co-Founder
As the co-founder of Consulting24, our goal is to shepherd entrepreneurs into Estonia's vibrant crypto universe. Our unwavering commitment to simplifying the license acquisition process spotlights our unique place at the forefront of this worldwide shift.