Interest in cryptocurrencies continues to grow, so a large number of people around the world are striving to open their businesses in this direction. To work legally, you need to get a crypto license. Licensing rules are different in all countries, but we have highlighted standard features that will be valid for various jurisdictions.
Why is it necessary to obtain a permit?
To engage in this business as safely and legally as possible, it is necessary to register for a crypto license. If crypto activities are carried out without a permit, then this is against the law, and the authorities impose fines or even ban the company’s activities.
Of course, there are countries where licensing is not mandatory (for example, the UK), but this entails excellent risks associated with the activity of financial criminals. A licensed firm has guarantees of protection from making illegal transactions because it will be subject to AML) and KYC policies. Having a permit from the company will attract other firms to cooperate.
In addition, many investors refuse to cooperate with unlicensed companies, as they are afraid of fraud. When an organization receives a work permit, it is checked, which means that these firms can be trusted.
The process of obtaining a crypto permit
Below, we will look at the general requirements for many countries that must be met to register:
- Decide on the company’s jurisdiction.
- Give a unique company name and choose the organizational form of management.
- Register a company within the country.
- Create a physical office within the state (sometimes only allow a virtual office).
- Open a bank account in that bank and put the authorized capital; in each country, the size of this is different. The financial resources should be sufficient for the company’s operation for several months.
- Hire a staff of employees with appropriate qualifications and experience in the crypto business (this must be documented).
- In each country, it is necessary to comply with the requirements regarding the company’s managers, beneficiaries, shareholders, and founders.
- Create a structure within your company whose task will be to comply with the AML policy. This unit must ensure that all transactions are carried out within the framework of the country’s laws. If suspicious crypto transactions are detected, immediately inform the authorized bodies.
- Provide a developed business plan for several years ahead.
- Create high-level technical equipment for the company – the availability of programs for conducting crypto transactions, maintaining accounting reports (with a database for storing transactions), and an IT system that detects illegal transactions.
- Pay a fee for registration services.
- Prepare the required package of documents.
- Submit the documents to the permit issuing authority.
The duration of obtaining a permit varies from 1 month to six months: in Estonia – 2 months, in Switzerland and the UK – 3-6 months; but in the USA, only 2 weeks.
The duration of obtaining a permit is also affected by the method of its registration: online or direct (physical) presence in the country.
In Poland, for the legal activity of the crypto business, you only need to register in a unique state financial registry and obtain PESEL.
Types of crypto licenses
The type of cryptocurrency permit depends on the chosen line of business of the company:
- Interchange of virtual currency (crypto-crypto).
- Exchange virtual currency for fiat money (and vice versa).
- Management of the virtual currency of another company (conclusion of transactions, storage of crypto assets).
- Act as a broker (intermediary functions).
If the organization plans to engage in more than one type of activity, then each class must obtain a license separately. But, for example, in Estonia, only one permit, “virtual asset provider,” is issued, which includes several types of activities – cryptocurrency exchange, storage of assets (wallets, vaults), and transfers of assets from one vault to another.
All countries in which crypto activities exist legally strictly follow the principles of AML – combating illegal financial transfers. In addition, such control is provided for in the very structure of companies (based on legal requirements). This attitude gives a guarantee of security to legal business.
The country’s authorized regulators monitor all transactions to detect criminal crypto transactions.
Regular audits of companies are carried out (without warning); they check accounting and the register of concluded transactions, the availability of appropriate technical IT equipment, and confirmation of the qualifications of employees; companies are required to submit reports regularly; they may be asked for personal data of employees and customers, verify the source of capital. Sometimes, they have the right to withdraw documents and equipment for verification. Also, each organization is required to have a system for assessing the risks associated with the fraud.
If suspicious transactions are detected, the company’s activities can be suspended and information sent to the competent authorities.
Before deciding which country to register your business, you must thoroughly study what fee you will have to pay for this and how beneficial it will be for the company.
Let’s take a few countries as an example:
- Poland – the corporate tax will be 19% (on a concession – 15%), and the tax on currency exchange will be from 17 to 32%.
- Switzerland – national tax from 7 to 8.5%, and the value of the same tax for the canton rate from 12 to 24% (but the percentage changes annually).
- Estonia – no corporate tax, but companies have to pay 20%.
Thus, having learned the cost of registration, the amount of taxes, the conditions for obtaining a crypto license, and the requirements for the company, its employees, and the size of the authorized capital, decide in which country it is more profitable for you to start your cryptocurrency activity.
How can our company be helpful to you?
It is challenging to obtain a crypto license on your own because you need to prepare a large package of documents and ensure that your organization meets all the requirements of regulatory authorities. Our company’s specialists will help you go through this path quickly and with minimal financial costs. The list of our services includes:
- Assistance in choosing the proper jurisdiction;
- Registration of necessary documents;
- Checking how your organization complies with the requirements of government agencies;
- Opening a bank account;
- Assistance in selecting employees for critical positions.
In most cases, it does not make sense to fly to the country where you decide to obtain a work permit. You can transfer all documents electronically, and our specialists will represent your interests in government agencies.
At the end
A license guarantees that your organization can operate legally without fear of problems with government agencies. Obtaining a work permit is a complex process requiring financial investments, patience, and specific rules. Our company’s specialists will help you collect the necessary documents and check how your organization meets the requirements and can be competitive.
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