Estonia is an EU member state with a simplified tax system and one of the lowest corruption rates in the world. Corporate tax in Estonia is 20% (undistributed profits are not taxed). From a business perspective, the electronic money and services industry has massive potential, particularly with EU licensing. Since January 2018, Estonia has revised the law regulating the activities of payment institutions. Until 01/13/2018, despite the fact that the activities of electronic money have already been regulated by the legislator, the license for e-money in Estonia had a serious limitation. According to clause 6.5 of Chapter 1 of the Payment Institutions and E-money Institutions Act of 2014 edition, after the release of e-money, electronic devices could not simultaneously store electronic money exceeding the equivalent of 1,000 euros, while in total for calendar year, the maximum allowable amount was the equivalent of 2500 Euros.

According to 2018 edition of the Law (hereinafter the Law), the above restriction in Clause 6.5 of Chapter 1, which was the main reason for the refusal of most investors to decide to obtain a license for e-money in Estonia, was canceled. This change is an extremely important step in the development of the e-money business in Estonia.

Features of e-money in Estonia

According to the 2018 edition of the Law, electronic money is a monetary value that is stored on an electronic medium, expressing a monetary claim against the issuer and meets the following requirements:

• Electronic money can be issued only at the face value of the amount of the received cash payment;
• The use of electronic money in payment transactions may only occur for transactions within the meaning of subsection 709(6) of the Law of Obligations Act;
• Issued electronic money must be accepted as a payment instrument by at least one person other than the one who issued it.