Estonia was the most popular jurisdiction for crypto companies in the EU and worldwide during the ICO season 2017-2018. However, lately, local authorities have provided more strict crypto regulations.
Country overview
#22
EstoniaCountry stats
Rating Points
380
This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.
Crypto Penetration
1.5%
Estimated percentage of crypto users out of the country's total population based on public data.
Legal Entities
384
Number of crypto companies registered in the country based on regulator data if available or other types of public data.
Regulation Points
180
An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.
Amount of crypto users
19 500
Total amount of crypto users out of the country's total population based on public data.
Taxation points
60
This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.
Market volume points
45.6
A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.
Status of crypto
Legally allowed
General status of cryptocurrency regulation in this jurisdiction.
Crypto payments
Legally allowed
The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.
Security Level
Moderate danger
The overall level of security in a given country based on open data.
Crypto Salaries
Legally allowed
The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.
Business Climate
Good
Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.
Stablecoin Regulation
Basic
This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.
Bad Factors
No
This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.
Types of licenses
Crypto-to-crypto
This license type allows VASP to provide legal exchange from one cryptocurrency to another.
Crypto-to-fiat
This type of license regulates the exchange from cryptocurrency to fiat.
Wallet/Custody
This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.
Good
Medium
Bad
Estonia has a moderate danger security level according to our rating. jurisdiction has 75.5 points (from 100) for safety level in Numbeo crime rating (1). Homicide level (2) is 2 per 100,000 inhabitants a year. Story of firearm-related death (3) 1.34 per 100,000 inhabitants a year.
Cryptocurrency received as wages are included in the EMTA tax guide (4), which means crypto payments are legal in the county. Also, Bitpay and other crypto payment providers have legal entities here.
Cryptocurrency received as wages is legal according to the EMTA tax guide (5).
The Estonian Financial Intelligence Unit (FIU)(5¹) is the primary AML regulator, and crypto entities in the country need its registration. The leading crypto regulation act in the country is the AML law. According to Kriptomat (6), In 2020, the new AML act came into effect, and the share capital was increased from EUR 2,500.00 to EUR 12,500.00. Then, in 2022, it came into power with a new edition of AML law. Based on Njord(6¹), the “virtual currency transfer service” has 250,000 EUR share capital; for other VASP services, it’s EUR 100,000. You may check details in the overview of new regulations from the Ministry of Finance (FIN) (7), according to which even DeFi “can fall under the new definition.”
Based on Nasdaq (8) FIU can abolish the license if the company has no connection with Estonia.
So, based on the Kriptomat overview (9), during the ICO rally, Estonia issued more than 4,000 licenses. According to Cryptonews article (10), “by mid-2021, Estonia was home to over 50% of the world's VASPs”.
Based on Njord law (11), only 370 companies were operating in 2021. According to local authorities, in 2022, “FIU got amendments for 135 authorizations, and 94 service providers surrendered their authorizations. The FIU revoked 18 licenses in 2022”. You may find some of the FIU operation’s details in its research on existing crypto companies (12) in 2020.
During 2024 Estonia has updated its legislation based on MiCA requirements and approved Crypto Asset Market Act (13), according to which the country will change its crypto regulator - Financial Supervisory Authority, instead of Financial Intelligence Unut. Already registered crypto entities have 12 months to get CASP license until 1st January 2026.
| Tax name | Index |
| PIT tax Max | 20 |
| PIT tax Min | 7 |
| Corporate tax (CIT) | 20 |
| Max Individual CGT (for crypto) | 20 |
| Min Individual CGT (for crypto) | 20 |
| Wealth tax Min | 0 |
| Wealth tax Max | 0 |
There is a detailed guide about all aspects of crypto taxation on the EMTA website (14).
PIT
Estonia has a flat PIT rate - 20%. EMTA guide describes the most common crypto taxation cases.
Income can be generated in different ways, for example:
CGT
According to Deloitte (15), “a flat 20% rate applies to residents unless exempted by law. There is an annual tax-exempt amount of up to EUR 6,000”.
CIT
Estonia has the same CIT rate as PIT, which is 20%.
1)Crime Index by Country 2023 Mid-Year
2)List of countries by intentional homicide rate
3)List of countries by firearm-related death rate
4, 5, and 13)EMTA tax guide
5¹)The Estonian Financial Intelligence Unit (FIU)
6 and 9)Crypto Regulation in Estonia Is About To Change and Will Affect Service Providers. Article
6¹)Njord
7)New regulation from the Ministry of Finance (FIN)
8)Estonia Approves First Bitcoin, Crypto Bank After New Legislation
10)Lithuania Avoids Becoming the ‘New Estonia’ After Updated Crypto Regulation Announced. Article
11)Compliance with Estonian AML rules among licensed crypto companies. Article
12)A Survey of Service Providers of Virtual Currency
13)Estonia Crypto Asset Market Act
14)Estonia Tax and Customs Board. Cryptocurrency
15)International Tax Estonia Highlights. PDF-file
Last update: November 2024