Estonia has stood out in recent years in its approach and promotion of blockchain technology and cryptocurrency issuance worldwide. Some consider it the world's first digital country. Estonia has been part of the European Union since May 1, 2004. It has been a member of the Eurozone since January 1, 2011, and of the Schengen area, since December 21, 2007. It has a population of 1.3 million population.
In this country Skype was born, the company that revolutionized communications, and was acquired by Microsoft for 8.500 billion dollars. Today, 70% of GDP is fed by the service sector, and those related to information and communication technologies (ICT) are the ones that contributed the most to the growth of national wealth. Estonia presents itself to the world as the first 100% digital country, a path that began in 1991. The Republic of Estonia was born in 1918 but in 1991 it became an independent country, when it was liberated from the Soviet Union.
By the year 2000, Estonia declared Internet access as a basic human right, on the same level as food and accommodation. In 2005, it was the first country in the world to introduce electronic voting. Since those years, they have been implementing blockchain technology in the State. In October 2014, the government launched its e-residency program, which offers everyone around the world a digital identity with the opportunity to start and operate an online business under Estonian regulations.
In turn, it has become a leading country worldwide in the launch of ICOs, IEOs, and STOs.
The European Union does not have a uniform regulation regarding blockchain and cryptocurrencies. There are only tangential decisions that can affect this area. For example, there are some Directives that regulate matters related to money laundering and terrorism, which affect activities associated with cryptocurrencies. And some resolutions of the Court of Justice of the European Union that mention and indirectly regulate this phenomenon. Finally, we can cite some reports from official bodies of the European Union. The judgment of October 22, 2015, the Court of Justice of the European Union (CJEU) which resolved the question of whether cryptocurrencies are subject to VAT tax. Among other conclusions, it established that cryptocurrencies can be a means of payment, if the parties involved in the operation so accept.
In the absence of unitary and central regulation, individual EU countries have developed their own positions on cryptocurrencies. However, the Directive (EU) 2015/849 of the European Parliament and of the Council contains a definition of virtual currencies. Considers them a digital representation of value that is not issued by a central bank or a public authority, nor necessarily linked to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or marketed electronically.
In the launch of ICOs, IEOs and STOs, Estonia has become a highly developed country. One of its advantages is also, without a doubt, the ease of bureaucratic management. The process of creating a commercial company in Estonia is very fast, of days. In turn, registration in the Commercial or Mercantile Registry is also a matter of a few days. In a week or two you could have a company running and registered in the Mercantile Registry.
One of the biggest problems today in Estonia is obtaining a bank current account. It is therefore necessary to have good advisers, or law firms that can carry out all these efforts efficiently.
For the launch of an ICO, IEO or STO it will be necessary to prepare a whitepaper related to the business, and on the other hand explain the operation of the policies of money laundering and financing of terrorism. Specifically, an AML (Anti Money Laundering) manual and a KYC (Know Your Customer) manual will have to be developed. These requirements are required by European Union regulations. Along with this, an application for licenses must be made before the competent authority, that is, before the FSA (Estonian Financial Supervision and Resolution Authority). Two licenses will have to be applied for before the FSA: a license to exchange between fiat currency and virtual money (cryptocurrency), and a license to exchange cryptocurrencies. Both licenses can be requested simultaneously, or individually. The documents submitted must be in English, Russian or Estonian. They must also be recent (no more than 3 months), and must be apostilled.
It should be noted that the request usually takes about 30 days to be reviewed, after which, if there are no additional information requirements, it is granted or rejected.
Finally, Estonia stands out for having a relatively low or at least affordable tax burden. Corporation tax, for example, has an important advantage: it is taxed on profits that are not reinvested in the company. In other words, if a company decides not to allocate the benefit to dividend distribution, and leaves said asset in the company, it will not be taxed. This is a great advantage. Firstly, because it encourages reinvestment in the company, and, secondly, because a company may never pay taxes on company tax, or on a relative basis (not on its total profits). For this reason, Estonia is a good destination for the creation of companies in the technological and blockchain environment, and also a good place to establish the holding of your company or heritage.