Crypto License Comparison: 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
Crypto Licensing in Lithuania: The Gateway to Blockchain Innovation
Lithuania, a forward-thinking Baltic nation, is steadily carving out a niche in the vast crypto landscape. The Financial Crime Investigation Service (FCIS) of Lithuania moved swiftly, setting forth clear and comprehensive crypto regulations early on.
The country offers two primary licenses - a Virtual Currency Exchange and a Custodian Wallet Service license.
The FCIS, Lithuania's regulatory authority, is known for its meticulous oversight, ensuring stringent compliance and transparency across operations.
So, why should crypto entrepreneurs consider Lithuania? Let's break it down:
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Unambiguous regulatory guidelines: Lithuania's early plunge into the crypto space has resulted in well-defined and straightforward regulations.
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Entrée to the European market: Being part of the European Union, Lithuania can serve as a springboard into the extensive European market.
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Expedited licensing process: Lithuania is known for its rapid and efficient licensing process, making it an attractive destination for crypto businesses.
The Tax Narrative Lithuania imposes a standard 15% corporate tax, which, compared to many Western European counterparts, doesn't come off as too harsh. For smaller businesses, ones that have an annual turnover less than €300,000, the rate is further reduced to a pleasant 5%. Sounds pretty reasonable, doesn't it?
In terms of crypto taxation, Lithuania strikes a commendable balance. For individual investors, the sale of cryptocurrencies is classified as personal income and taxed at a flat rate of 15%. For businesses, conversions from crypto to traditional currency come under the umbrella of corporate tax.
Here's the surprise - crypto-to-crypto trades and crypto mining activities are exempt from tax! This provision, aimed at stimulating crypto-related endeavors and innovations, could very well be the harmonic melody that many crypto enthusiasts have been seeking.
Dubai's Crypto Boom: A Closer Look at Licensing
Dubai, renowned for its imposing skyscrapers and luxurious lifestyle, is swiftly emerging as a hub for cryptocurrency businesses. Although it's not a standalone country, this Emirate holds a level of financial autonomy. As for its regulations? They're keeping their cards close to their chest.
The Virtual Assets Regulatory Authority (VARA) is the key authority, supervising and regulating the deployment, application, and trading of virtual assets originating from or distributed within Dubai's territory.
So, why all the buzz about Dubai?
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Strategic location: Positioned at the crossroads of Europe, Africa, and Asia, Dubai is a lucrative hub for crypto businesses targeting these markets.
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Entrepreneur-friendly environment: With its adaptable regulations and appealing tax incentives, Dubai could potentially be a golden opportunity for crypto ventures.
Estonia: A Promising Terrain for Crypto Licensing
Estonia, widely celebrated as Europe's tech hub, was an early adopter in formulating a crypto license framework. With a single license covering both crypto-to-fiat exchange and custody & wallet service providers, this small, tech-forward Baltic country has extended a warm welcome to crypto businesses. However, Estonia's approach to regulation is anything but lenient. Their regulatory authority, the Financial Intelligence Unit (FIU), maintains stringent vigilance.
To get a license, the conditions are stern. An impeccable criminal record, a comprehensive business plan, and strong anti-money laundering measures are just the preliminary requirements.
But what makes Estonia a preferred choice?
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Quick and efficient process: After your application submission, the FIU typically responds within an impressive 30-day period.
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Reasonable pricing: A government licensing fee of 10,000€, quite affordable when compared to the global average.
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Favorable tax structure: Estonia boasts an appealing tax framework for crypto businesses.
Estonia's Tax Framework
Estonia's approach to taxation, particularly in the realm of business and cryptocurrency, is uniquely appealing. Here's the kicker - Estonia implements an impressive 0% corporate tax on profits that are either held within the company or reinvested. Yes, that's right - absolutely nothing.
In the often intricate and complex landscape of taxation, Estonia stands as a beacon of simplicity and ease. Here's the breakdown:
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No Corporate Tax on Retained and Reinvested Profits: If a company, crypto enterprises included, decides to reinvest its profits or simply keep them in its coffers, it bypasses corporate tax entirely. The standard corporate tax rate of 20% only comes into play when profits are distributed to shareholders as dividends.
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Absence of Capital Gains Tax: To top it all, Estonia does not impose capital gains tax on cryptocurrency sales. This tax setup is a significant boon for crypto businesses looking to expand or reinvest, offering a substantial boost to potential growth and scalability.
In essence, the appeal of Estonia to crypto businesses is not just about its vibrant tech scene or its crisp Baltic air. The 0% corporate tax policy is a major driving force behind Estonia's reputation as a fertile ground for crypto trailblazers.
Why Consulting24?
The 500 Milestone: Accumulating Crypto Licenses and Not Stopping
Consulting24 Team
Mardo Soo
Founder
As the Chief Executive Officer of Consulting24, my mission is to serve as a guiding beacon for entrepreneurs navigating the dynamic crypto environment in Estonia. We excel at simplifying complex processes. Our steadfast dedication to making the licensing path as seamless as possible highlights our distinctive position amidst this worldwide transformation.
Lena Elvbakken
Co-Founder
As a co-founder of Consulting24, our objective is to usher innovative entrepreneurs into Estonia's lively crypto universe. Our unwavering commitment to simplifying the complex licensing process highlights our unique place in this global transition.