Obtaining Financial Service Licenses in Estonia
Regulatory Compliance Associates offers help to obtain financial service licenses in Estonia for businesses that are interested in being able to offer specific financial services in the Estonian market. The international financial services sector has been in a growth phase for quite some time already, and this is a trend that will continue. New virtual currencies, new business ideas in the FinTech sector and more people starting to use technology equals more transactions and bigger demand. As Estonia is one of the leading digital hubs in the world with the ability to do everything remotely, is why numerous financial-service companies are looking to establish their business in Estonia to start operating.
Businesses That Need Financial Service Licenses To Legally Operate
In Estonia, Finantsinspektsioon and the Financial Intelligence Unit (FIU) are responsible for giving out licenses and supervising financial services. Both agencies oversee and license different areas of the sector and therefore it is important to determine where you must submit your license application. This, however, can be a somewhat complicated process, as the Estonian Money Laundering and Terrorist Financing Prevention Act and the Credit Institutions Act both contain a definition for the term “financial institution”. In case you are interested in using our services, we can help you determine it based on the information you give us.
Here is a basic overview of where you can expect you have to obtain your financial service license by determining your business’ main activity:
- Operating as a bank
- Operating as an insurance company
- Providing insurance intermediary services
- Operating as an investment firm
- Providing fund manager services
- Operating with investment and pension funds
- Operating as a payment institution
- Operating as an e-money institution
- Operating as a Creditor and/or a creditor intermediary
- Operating in the securities market
- Operating as a financial institution (except areas of activities related to the responsibilities of the Financial Supervision Authority)
- Operating as a trust and company service provider
- Providing pawnbroker services
- Providing virtual currency services (e.g., virtual currency exchange and/or wallet)
- Purchase or wholesale of precious metals, articles of precious metals or precious stones
Applying For a Financial Service License in Estonia
Once the main activity and the institution that licenses it has been determined with our help, the application process can begin. However, before handing in the application to one of the authorities, there are several considerations to make and requirements that must be met.
Now, obviously, the requirements for each individual financial service license that can be obtained in Estonia are different due to the nature of the services that are provided. But in general, all businesses that have a financial service license in Estonia must meet a high standard of diligence to be granted a license and to maintain it.
This is because of the high local and international anti-money laundering (AML) standards that Estonia has introduced to its legislation to reduce risk, prevent criminal abuse, and to maintain the Estonian financial system stable. In relation to that, the companies that are applying for financial service licenses must successfully demonstrate their internal controls, codes of conduct and procedures that will decrease the risks of money laundering and terrorist financing.
Here, we can help you determine which systems you must have in place and help to put them there so you will be fully compliant prior to making your application and prior to starting your operations.
Another important aspect here is that people connected to the company may not have any convictions for money laundering, anti-governmental activities, or for any other intentionally committed crimes. This aspect will also be verified by the local authorities by doing a background check on the company’s shareholders, board members and ultimate beneficial owners. Also, the company’s local AML contact person must be appointed for the company, which is a service that we also offer.
RCA Offers Local Expertise Regarding Financial Service Licenses in Estonia