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Financial Institution License

Author: Admin
December 29, 2021
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Financial institution license (FFA-license) is a unique license in Estonia, which gives your financial institution an easy way to broaden the scope of financial side activities/services and stand out. It also allows providing simpler financial services with unusually favorable conditions, compared to many other jurisdictions. Previously, our articles have described the advantages regarding virtual currency regulation and public funding in Estonia. This article will illustrate the one-of-a-kind characteristic of Estonian business environment regarding the FFA-license as well as aims to answer some important questions that may arise.

When banking, forex, payment service providing and other such activities, considered as being large scale, oblige to obtain a license from the Estonian Financial Supervision Authority (EFSA) – the highest financial supervisory authority in Estonia – and require a minimum share capital of 25 thousand for gambling activities to a minimum of 5 million for banking activities. In comparison, financial activities under the FFA-license require no minimum share capital and the supervision of the conduct of business and issuing licenses falls under the jurisdiction of the Financial Intelligence Unit (FIU) – a structural unit of police and guard board.  Additionally, while obtaining an EFSA license for large scale financial activities may take from 3 months up to 1 year (depending on the nature of the business project), obtaining the FFA-license is usually acquired within 2 months (FIU has provided an examination period of 1 to 3 months). The FFA-license in Estonia particularly creates a favorable hub for financial institutions with the necessary payable government fee of 3 300 EUR and no requirement for physical presence directors, nor shareholders – they can even be non-EU residents.

The FFA-license permits to carry out the following service (provided by the FIU):

  • Central contact point designated by an e-money institution or a payment service provider
  • Management company
  • Savings and loan association
  • Provision of advice to clients
  • Borrowing and lending operations
  • Leasing transactions
  • Money broking
  • Guarantees and commitments
  • Currency exchange


However, it is important to note, that while the prior list is exhaustive, the opportunities for activities, which can be derived from the listed fields, create numerous possibilities, especially when combined with the growing virtual currency-world.

Here are just a few examples of the possible side activities:

  • Escrow services
  • Staking services
  • Loans in virtual values backed with fiat
  • NFT digital arts auction
  • Investment advising
  • Issuance of B2B loans in fiat


One of the most attractive fields of activity under the FFA-license is small alternative investment fund (AIF). Apart from the other fields, small AIF requires an additional authorization from the EFSA but also gives a possibility to manage up to 500 million in initial investments from investors all over the EU – on the other hand, savings and loan association, which also allows funds management, sets the limits to manage up to 5 million in assets and applies territorial restrictions. Hence a savings and loan association service constitutes a great opportunity for people with common goals and economic interests to create a sustainable and supportive business environment, while small AIF constitutes a broader opportunity to support specific economic areas by investing and through that generating greater profit to its investors. The table below illustrates the possibilities and characteristics of a small AIF.


Fund type

Small AIF

License issuer

FIU (and FSA authorization)

Regulatory legal acts



Investment Funds Act (Est)

Minimum share capital requirement


Fund structure

2 legal entities = Fund manager + Limited partnership fund


Professional and non-professional

Number of operated funds

One or small amount

MAX total initial investment across all funds

500 million – minimum mandatory redemption limit 5 years

100 million – no limits on redemption time

Right to make public offering


Types of investments

No limitations

Confidentiality of investors

Full confidentiality (list only enclosed to the fund manager)


The FFA-license presents a unique opportunity to operate and onboard clients worldwide and be licensed in the EU. While requiring no share capital and providing a relatively short time-period for acquiring the license, the FFA-license creates numerous possible ways for businesses to diversify their services. With the help of experienced consultants, the acquiring process will be not only fast, but also easy for your company.


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