As the ICO boom passed, blockchain technologies began to spread actively and were used not only in financial and investment environments, but also began to gradually enter other areas of everyday life. Thus, in the last few years, the NFT industry has developed extensively, making it possible to create standardised property certificates for digital objects.
An NFT (non-fungible token) is a type of cryptographic token that, as elements of the blockchain network in the form of digital records, is tied to specific digital objects, making each exemplar of NFT unique in nature and not replaceable with another similar token.
Any digital product, content or asset that claims to be unique can be represented as an NFT: an image or picture, a gif or animation, music or song, video or film, text or post, or any inventory or asset from a computer game that is exclusive to that game for one reason or another.
By purchasing an NFT token, the user becomes the holder of an electronic or, in other words, cryptographic certificate for a piece of virtual art, asset or content. At the same time, a record is generated in the blockchain network that confirms the user’s ownership of the digital object, which is sent to IPFS (InterPlanetary File System) for storage.
NFT tokens are particularly popular with progressive collectors and modern art lovers, as well as gamers who invest in unique and exclusive inventory for their characters and other virtual goods and objects in game universes.
NFT services and industry
The main players in the market for NFT services are the developers and issuers of NFT tokens, as well as platforms for placement and further sale of NFT, also referred to as NFT marketplaces. In 2021, the volume of trading in non-interchangeable tokens exceeded the amount of 13 billion US dollars, so this indicator increased almost 400 times compared to 2020, with OpenSea becoming the most significant marketplace, which provided about 88% of the NFT trading volume.
Based on the above data, it can be unequivocally asserted that NFT is no longer a niche product and is currently of interest to a wider user audience; in addition, the NFT industry has acquired a significant business component among other blockchain projects.
Your NFT project in Europe: why Estonia?
Development and promotion of any NFT project and provision of NFT-related services on a commercial basis involves setting up a legal entity, in whose name all the necessary infrastructure for successful business operations (website, trading platform, settlement accounts, etc.) will be registered, and on whose behalf all legally significant actions will be performed, including the creation, placement and sale of NFT tokens.
Are you looking for the most suitable jurisdiction to start your NFT project in the European Union? Among all European countries, we recommend that you first of all pay your attention to Estonia, as the most efficient jurisdiction in the NFT context.
Estonia has long gained a reputation as one of the world’s centres for the development of innovative technologies – for many years, Estonia has paid special attention to the development of its IT industry and high-tech business environment. Adding to the above circumstances the fact that Estonia has no corporate tax on undistributed profits and that Estonia was the first country in the world to introduce regulation of cryptocurrencies and services for their exchange and storage at the legislative level, it can be said with full confidence that Estonia is the ideal jurisdiction to register and start the activities of your NFT startup.
Registering your NFT business in Estonia will necessarily become an effective solution for the successful start of your NFT project and the entry of your NFT startup to the international market for non-fungible tokens.
NFT company in Estonia: token development and issuance
If you have unique digital content and you want to develop and offer your own non-fungible token to an interested audience, or you have plans to create an entire line of NFT tokens, opening an NFT company (an NFT token developer company) in Estonia will undoubtedly be the best solution for developing your NFT project. Feel free to contact our specialists and we will help you set up an effective corporate structure for launching your NFT business as soon as possible.
NFT marketplace of Estonia: listing and sale of tokens
Do you want to place (list) and offer NFT tokens developed by third parties to a wider audience by setting up your own NFT exchange or NFT marketplace? Our specialists have many years of experience in supporting various blockchain projects of various kinds and are ready to offer the most advanced organisational and technological solutions for your NFT project, which will help introduce your marketplace into the legal framework of the European Union as soon as possible.
Is it necessary to obtain a licence to issue the NFT?
Generally, NFT projects that create, place or sell NFT tokens do not require any separate licensing or obtaining a permit to operate.
NFT tokens are not directly described or regulated in Estonian legislation and are not virtual assets within the meaning of the AML Act of the Republic of Estonia, as they are not primarily a means of payment and are not accepted as a means of payment by a wide range of persons.
However, the intergovernmental organisation FATF (Financial Action Task Force on Money Laundering) has pointed out in its 2021 guidelines that some NFT tokens, which at first glance have nothing to do with cryptocurrencies, may still fall within the definition of virtual assets if practically used for payment purposes; in this case the issuing company or marketplace will have to obtain a VASP (Virtual Asset Service Provider) licence as part of its business.
You should also be careful if the NFT token is directly or indirectly intended to be used for investment purposes, or potentially gives its holder the right to receive a part of the profit or the right to participate (share) or vote in any enterprise (project) – in this situation, you may be dealing with a security token, the issue and offering of which may be subject to securities regulations and the competence of the financial regulator.
If you find any of the features or properties outlined above in the NFT tokens you are developing or placing, we strongly recommend that you conduct a thorough analysis of the nature of your NFT token in order to avoid any future difficulties.
We would also like to note that accepting payments in cryptocurrency for services or goods is a legal payment method for Estonian companies. However, a clear distinction must be made between the implementation of transactions for the purchase and sale of NFT for cryptocurrency and the provision of VASP services, which include cryptocurrency exchange and storage services and the implementation of cryptocurrency transactions that require an appropriate licence.
Setting up an NFT business in Estonia has many advantages and will certainly become an effective tool for developing your NFT startup. If you are interested in the possibility of registering an NFT company in Estonia or you have any additional questions, please contact our specialists by phone, e-mail or by using the feedback form on our website.
You can find additional information about starting a company in Estonia on the subject page of our website.