NFT Business in Estonia
Despite numerous regulatory amendments that have taken place in Estonia which have affected blockchain and cryptocurrency businesses, Estonia continues to be one of the best places to establish a crypto business.
While many business models that deal with virtual assets need a license to operate in Estonia, in most cases, non-fungible token (NFT) companies are not required to obtain a license. Also, the inclination towards innovation, online business management capabilities, clear legal system and the supportive ecosystem has led to the increased trend of global entrepreneurs establishing a NFT business in Estonia.
Regulatory Compliance Associates is eager, available, and open to discuss your requirements – please do not hesitate to reach out to us!
What is an NFT?
NFT is and abbreviation of a non-fungible token which is based on blockchain technology and shares some programming similarities with some cryptocurrencies as all transaction data is recorded. However, NFTs are cryptographic tokens that usually represent real-world objects like art, music, in-game items, and videos and have been around since 2014. While NFTs have been around since 2014, they only started to gain attention from a broader audience when artists saw it to sell their digital artwork which can also protect their rights.
NFT assets are usually one of a kind and have a unique identifying code that acts as proof of ownership. This means that they cannot be replaced by another token without changing the value or data of the object and allows the buyer to own the original item.
Why Should You Establish Your NFT Business in Estonia
Start-ups, businesses, and entrepreneurs from all over the world which are looking to launch a company or project that involves NFTs should consider establishing their business in Estonia. As mentioned above, and described in further detail below, Estonia offers a great ecosystem where new ideas can be tested.
Recent statistics regarding Estonia as a good business jurisdiction:
- In 2021, Estonia ranked 1st in the International Tax Competitiveness Index;
- In 2022, Estonia ranked 3rd in the Global Cybersecurity Index and 1st in the European Union;
- In 2022, Estonia ranked 4th in the World Press Freedom Index;
- In 2022, Estonia ranks 7th in Economic Freedom Index.
Regulatory Environment That Supports Innovation
In Estonia, issuing NFT tokens is not regulated by law. This means that there are no restrictions provided by the local legislation for the creation and sale of an NFT. In business operation terms, it takes away numerous regulatory and technical requirements when establishing an operational business.
On the other hand, income earned with activities that involve virtual currencies in Estonia is taxed in the same way as income earned in regular FIAT currency, making the rules clear and simple.
Compared to other jurisdictions, Estonia already has extensive experience with licensing and supervision of businesses in the virtual assets sector. While the regulations in Estonia have become stricter due to the need to lower money laundering risks and increasing transparency, the local regulators have already adopted necessary amendments that are aligned with the European Union’s larger approach towards virtual assets. These developments have led to the clear definition of what is required of and allowed for virtual asset service providers, which ultimately makes investors and customers feel more secure and enables business owners to continue innovating.
Also, the fact that Estonia has been using blockchain in their digital public services since 2008, has put it ahead of many other countries.
An Ecosystem That is Set Up for Growth
While Estonia has a clearly defined legislation that lets entrepreneurs know exactly what is allowed and what not, many founders enjoy Estonia because of its digitally advanced ecosystem. Thanks to the Estonian e-services, which are available 24/7 online and run on blockchain, business owners can easily manage their business and run it from anywhere around the world. Whether you wish to create your company in one business day or do your taxes in less than ten minutes, e-Residency makes it all possible.
In addition, as Estonia was one of the first countries in the world to provide a license for virtual asset service providers (VASPs), it created an immensely advanced fin-tech scene where numerous solutions in the financial sectors have emerged.
Besides fintech businesses, Estonia is home to more 105 start-ups per 100,000 inhabitants. The local startup community also plays a significant role in the whole ecosystem. They are places where one can connect, network, make friends with like-minded people, and even embark on a journey of a lifetime.
What Kind of an NFT Business Should You Establish in Estonia?
It is only recently that NFTs became popular, despite being around since 2014, and the market keeps on growing and developing every year. So far, it has captured millions of artists, investors, collectors, gamers who are interested in obtaining unique objects in digital form. In 2021, the global NFT market showed an increase of 2,500% compared to 2020. The main beneficiaries of the NFT market were NFT marketplaces and issuers. In Estonia, NFTs have had a significant growth which can be directly linked to the increase.
There are various NFT businesses in Estonia that can be established, however, the main point to think about is the objective or your project. Are you looking to collect, develop, sell or to act as an intermediary? This is one of the most important aspects as technological and regulatory requirements for each activity can be very different.
NFT Company in Estonia
In case you are interested in launching your very own NFT token, a collection of tokens which are to be sold to others as desired collectables or pieces of art, establishing a NFT business in Estonia is straightforward as in most cases licensing from the Estonian government is not needed. However, your business plan should be carefully studied beforehand to avoid any compliance pitfalls as mistakes can end up being very expensive in the virtual assets and compliance industry.
RCA offers a complete package for entrepreneurs that are interested in a quick and streamlined process of establishing their own NFT business. Our experienced crypto lawyers will go through the whole process of setting up your business and learning the intricacies of your business to obtain the desired outcome.
NFT Marketplace in Estonia
Unlike cryptocurrency it is not possible to trade NFTs directly on conventional cryptocurrency exchanges as different technological solutions are required. Thus, one can only buy and sell NFT on special trading platforms that allow to release, store and trade NFTs.
RCA has also developed a packaged solution for entrepreneurs and businesses that have their aims on establishing their own NFT marketplace in Estonia. RCA’s fully operational NFT marketplace provides everything you can need to get an exchange running and operational with the minimum amount of time.
RCA Can Help Set Up Your NFT Business in Estonia
We have developed two specialized NFT company formation packages that enable crypto entrepreneurs to establish their own NFT project or marketplace in Estonia in a clear and transparent manner.
In case you wish to obtain more information about our NFT packages or want our expert help with legal compliance in Estonia, please do not hesitate to reach out to us!