Cryptocurrency 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
Cryptocurrency 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 |
Crypto Licensing in Lithuania: A Comprehensive Breakdown
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Lithuania, renowned for its tech-forward approach, is carving out its own niche in the burgeoning crypto industry.
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The Financial Crime Investigation Service (FCIS) of Lithuania, the regulatory authority, issued comprehensive crypto regulations quite early.
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The country provides two primary licenses: a Virtual Currency Exchange License and a Custodian Wallet Service License.
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FCIS is recognized for its thorough oversight, enforcing stringent compliance and transparency in all operations.
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Lithuania offers several advantages for crypto entrepreneurs:
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Clear regulatory guidelines resulting from their early engagement with the crypto sphere.
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Access to the large European market due to Lithuania's EU membership.
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A fast and efficient licensing process, making it attractive for crypto businesses.
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The Tax Landscape in Lithuania:
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Corporate tax is set at a moderate 15%, which is significantly lower compared to many Western European countries.
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Small businesses with annual turnovers less than €300,000 enjoy an even lower tax rate of 5%.
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Crypto taxation is balanced:
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For individual investors, cryptocurrency sales are considered personal income and taxed at a 15% rate.
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Corporate tax is applied to business transactions that convert crypto to fiat currency.
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Interestingly, crypto-to-crypto trades and crypto mining activities are tax-exempt, a policy aimed at encouraging crypto-related ventures and innovations.
A Deep Dive into Crypto Licensing in Dubai: Riding the Boom
Dubai, famed for its majestic skyscrapers and opulent lifestyle, is quickly cementing its status as a nexus for cryptocurrency enterprises. This Emirate, while not an independent nation, enjoys considerable autonomy in shaping its financial regulations, which remain intriguingly discreet.
The Virtual Assets Regulatory Authority (VARA) takes the helm in supervising and regulating the deployment, application, and exchange of virtual assets originating or disseminated within Dubai's jurisdiction.
What makes Dubai an attractive destination for crypto businesses? Here are some key points:
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Geographical Advantage: Situated at the intersection of Europe, Africa, and Asia, Dubai serves as a strategic hub for crypto businesses targeting these vast markets.
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Business-friendly Atmosphere: Known for its flexible regulatory environment and appealing tax incentives, Dubai presents a potentially golden opportunity for crypto ventures.
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Robust Financial Infrastructure: Dubai is renowned for its advanced financial infrastructure, providing a stable platform for burgeoning crypto businesses.
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Growing Blockchain Ecosystem: The Emirate is making significant strides in embracing blockchain technology, thereby fostering an environment conducive to crypto innovation.
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Visionary Leadership: Dubai's leadership has shown a commitment to positioning the city as a global fintech hub, offering strategic initiatives and support for crypto businesses.
Estonia: Pioneering Progressive Cryptocurrency Trading Licensing Regulations
Estonia, often dubbed as the "Silicon Valley of Europe," was a pioneer in establishing a comprehensive regulatory framework for cryptocurrency licenses. This small, but technologically advanced Baltic nation, offers a unified license that covers both the exchange of cryptocurrencies to fiat and custody and wallet services, thus providing a welcoming environment for crypto businesses.
However, it would be a mistake to interpret Estonia's friendly approach as a lack of strict regulation. The nation's Financial Intelligence Unit (FIU), the regulatory authority overseeing the crypto industry, ensures rigorous scrutiny and high compliance standards.
To obtain a license, a series of stringent conditions need to be met:
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Clean Criminal Record: Applicants must have a spotless criminal record, reflecting a history of legal compliance and ethical conduct.
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Comprehensive Business Plan: A thorough business plan is required, detailing the company's operations, projected growth, and strategic approach to handling potential risks.
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Strong Anti-Money Laundering Measures: Robust AML procedures must be in place to prevent any illegal activities, such as money laundering or terrorist financing.
Estonia's appeal for crypto businesses extends beyond its progressive stance towards the industry:
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Fast and Efficient Process: The FIU typically responds within a remarkable 30-day period post application submission, making the licensing process fast and efficient.
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Affordable Pricing: With a government licensing fee of €10,000, Estonia's crypto license is quite reasonable compared to the global average.
In a nutshell, Estonia's combination of a forward-looking tech environment, fast and efficient licensing process, and a favorable tax regime make it a highly attractive destination for crypto ventures.
Estonia's tax framework offers significant appeal to businesses, particularly those in the cryptocurrency sector. The country imposes a 0% corporate tax rate on profits that are retained or reinvested, offering a substantial boost to potential growth and scalability. Here's a brief breakdown:
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Corporate Tax Exemption: Profits that are retained or reinvested within a company, including crypto businesses, are exempt from corporate tax. Only when profits are distributed as dividends does a 20% corporate tax apply.
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No Capital Gains Tax: Estonia does not levy capital gains tax on cryptocurrency sales, further enhancing its appeal to crypto businesses.
In short, Estonia's progressive tax policy, coupled with its vibrant tech environment, makes it a compelling destination for burgeoning crypto enterprises.
Why Consulting24?
500 and Counting: The Unstoppable Momentum of Crypto Licensing
Our Team
Mardo Soo
Founder
As the top executive at Consulting24, my primary objective is to serve as a lighthouse for business pioneers navigating the turbulent waters of Estonia's thriving crypto scene. Our expertise lies in decoding complicated procedures. Our unwavering commitment to smoothing the path towards licensing underscores our unique role in this global revolution.
Lena Elvbakken
Co-Founder
As a founding member of Consulting24, our goal is to shepherd entrepreneurial innovators into Estonia's dynamic crypto landscape. Our undying dedication to demystifying the intricate licensing procedure underscores our distinctive role in this global shift.