What is FinTech Launchpad in Estonia?

What is FinTech Launchpad in Estonia?

ICO Fintech Licensing AIF Crypto License (VASP)
5 August 2020

We work a lot with Fintechs and crypto companies. Crypto companies do fall into the Fintech category in my opinion, but it’s also a whole separate category by its own. With the recent changes to the crypto regulations and the wide variety of required support for Fintechs, we re-branded our licensing services to FinTech Launchpad.

The next obvious question is “What is FinTech Launchpad?”.

In this article, I am going to make a conclusion of the Fintech Launchpad and what it entails. As a result, you’ll have a better overview of what we can do for you.

Licensing documentation

This is an obvious one. Any payment services, e-money services, investment services or crypto services usually require a license. The requirements on licensing documentation are pretty technical, must me presented in a concrete form, and tend to be overly lengthy.

The common misconception here is that a law firm will prepare the documentation without any input from the client. That’s not true. The client has to know and give information about the planned business. Whether it’s a description of the IT-systems, flow of funds, risk-assessment, types of clients, marketing plans, etc, etc.

Not all licenses require these things, but many do. The point here is that clients have to be ready to spend time on the licensing documentation as well. It’s not going to be “pay and forget” type of service.

The quality of the final documentation depends on both the lawyer and the client.

One more thing to note is that licensing time is usually longer than you’ll expect. There are surprises now and then, but it’s better to include a buffer period into your business plan and go-to-market timeline.

Legal Analysis Of The Business Plan

Financial services are nuanced, and so are the licenses. Small differences in the provided services can change the capital requirements and licensing process. These are not trivial matters. It’s especially true with investment services. We get many enquiries about starting a fund, and often there’s no clear plan about how the service is actually performed. And how it is performed, can make a big difference.

Hence, it’s advisable, if there are any doubts, to first do the legal analysis on the business. It costs money, but a lot less money than applying for the wrong license, as the regulator will reject the application. This means lost time as well.

In years, we’ve analyzed a considerable amount of white papers and business plans for different kinds of services, including capital raises, payment services, investment services, etc.

Setting Up The Local Office For A Fintech in Estonia

Most financial licenses require setting up a local office. It’s because the supervisory authority issuing the license needs to have an overview of the operations. Same applies for capital raises.

We’ve had our fair share of requests for registering a prospectus in Estonia. A prospectus is the investment document highlighting the details about the offering. Usually, the idea is to set up an SPV (special purpose vehicle) in Estonia to raise money. Then, the money should be transferred to the company that actually needs the money for the operations. Like a shoe factory in Poland.

The issue here is that Estonian FSA does not have any capacity to supervise that shoe factory in Poland. They don’t have any operations in Estonia. Hence, although possible, it’s going to be very difficult to register such offering with the Estonian authorities. The same principle applies to all other Member States as well.

Setting up the local office means finding the suitable office spaces according to the requests, reviewing the spaces and making the lease agreements.

Recruiting Personnel

Again, most financial licenses require you to recruit local personnel. It’s usually a requirement to have at least one Estonian resident on the board of the company. It does not have to be an Estonian citizen, but someone who resides in Estonia.

For crypto companies, the requirement took effect only this year. Now, all crypto companies need to have a local board member. This requirement was already in place for Payment Institutions, E-money Institutions, Investment firms, etc, years ago. Additionally, if you’re required to have a supervisory board, then you also need to have an Estonian resident there as well. And to really show that you will have operations in Estonia, you may need or want to hire more staff here.

This kind of local operations requirements are in place in all Member States, as all supervisory authorities want to make sure the company can understand the local regulations and have actual operations in the country.


Whatever the business is, you will need a bank account. For example, Payment Institutions need to register a public limited company, which requires securities account. Any capital requirements mean that you’ll need a bank account to deposit the capital.


Due to our experience and work with FinTechs, we’ve been in touch with a variety of technology providers for FinTechs. Whether it’s E-money Institutions, investment platforms, crypto exchanges, it’s likely that there are plug-and-play solutions built for you. However, we’re not going to be able to recommend or give you specifics about any vendor, this is something you need to decide and understand yourself.


All financial institutions need to implement KYC solutions and processes. While drafting the AML documentation is part of the licensing documentation in general, the actual implementation of the KYC processes is not. Additionally, there are many KYC software providers, as well as monitoring tools.

Similarly to the previous chapter, we usually don’t give strong recommendations in this area, but we can give you options. Additionally, if you have your own technology, it’s likely you’ll have built-in KYC features as well. That said, it’s an important part for the authorities, as they want to make sure that no funny business is being conducted.

Conclusion for starting a Fintech in Estonia

The services described are at the core of the value proposition of the FinTech Launchpad. Of course, ideally, we’d do the marketing and user acquisition as well, but we need to leave something for the entrepreneur as well :). If you’re planning to start your Fintech in Estonia, you can connect with us.