Recent good-to-know info
Why to be cautious when buying a licensed ready-made company
Any change in the company structure (owners, directors, UBOs, compliance officers) requires registering amendments in the FIU (license issuing authority) with full documents set, thus the procedure is the same as when applying for the license(s) first time.
Generally getting the FIU’s consent for changing the structure of the ready-made licensed company takes much longer than getting feedback for the new company license application. Thus, the process is longer and is generally more expensive.
3. FIU does not regard crypto licensed shelf companies well and it raises a “red flag”, as in their (and our) opinion there is no logical reason for purchasing a licensed shelf company, instead of setting up a new one and then applying for the licenses. Your company will most probably attract the FIU’s higher attention in case of further processes as well.
4. When you purchase a licensed ready-made company, the FIU might ask for evidence proving that the company has started the licensed activities (as in that case the company has been issued the licenses some time ago already). In case of licensed shelf companies, it will be impossible to fulfil that requirement, which, in turn, will cause the FIU to question the application.
Cryptocurrency exchange and wallet service provider licenses
Companies that deal with virtual currencies can apply for 2 different activity licences:
1. Providers of a service of exchanging a virtual currency against a fiat currency
It allows exchanging fiat to crypto, crypto to fiat, crypto to crypto.
2. Providers of a virtual currency wallet service
It allows providing virtual currency (hot and cold) wallet service in the framework of which the company generates keys for Clients or keeps Clients’ encrypted keys, which can be used for the purpose of keeping, storing and transferring virtual currencies.
This service means offering custodial services of credentials necessary to access virtual currencies
General information about the above-mentioned licenses
The operating licences are issued by the Estonian Financial Intelligence Unit (FIU), which is an independent structural unit of the Estonian Police and Border Guard Board. Link
When applied together, two applications must be submitted and two different licenses are issued.
The main acts that regulate the activity can be found here.
The company is qualified as a Financial Institution, but has no special reporting requirements to tax authorities. Accounting must be done like for any other company. No special reporting to the regulator is needed, but FIU can always make precepts and inquiries about the company's activities. You may find Financial Intelligence Unit's advisory guidelines here.
§ 75. Revocation of authorisation/license
In addition to the grounds provided for in subsection 1 of § 37 of the General Part of the Economic Activities Code Act, the Financial Intelligence Unit will revoke authorization specified in subsection 1 of § 70 of this Act where:
the Financial Supervision Authority has granted authorisation to the undertaking;
the undertaking repeatedly fails to follow the precepts of the supervisory authority;
the undertaking has not commenced operation in the requested field of activity within six months from the issue of the authorisation.
As per June 20th. 2018, our clients have received 4 refusals because of one or more reasons listed below
There is a foreign corporate shareholder (offshore), which can't present criminal records
Related persons have a U.S.A. citizenship. Our experience shows that it is difficult to get a criminal record certificate from the U.S.A., which is compliant to the FIU requirements
Related persons have had a criminal record in the past