Crypto license in
Czech Republic 2024
The Czech Republic is widely recognised as a prime European Union jurisdiction for cryptocurrency businesses due to its unique regulatory landscape and low requirements. The Czech Republic has established a clear regulatory framework for cryptocurrency operations, reflecting the country’s commitment to fostering a secure and transparent digital financial environment.
The issuance of crypto licenses is managed by the Czech National Bank (CNB), which ensures that entities engaging in cryptocurrency-related activities, such as exchanges, wallet services, and trading platforms, comply with stringent regulatory requirements. These regulations encompass anti-money laundering (AML) measures, know-your-customer (KYC) protocols, and operational transparency to protect consumers and maintain market integrity.
Legalaes offers a guaranteed turnkey solution, with ready-made companies available with an acquired license in less than 2 weeks.
Regulations for Crypto license in Czech Republic
Activities associated with cryptocurrencies is categorized as a licensed trade, requiring the registration of the company in the Trade Licensing Register. This administrative process is overseen by the Czech Ministry of Industry and Trade. Crypto licensed entities in Czech Republic fall under the purview of the Financial Analytical Office (FAÚ), a financial intelligence unit tasked with overseeing their compliance with obligations mandated by Czech Anti-Money Laundering (AML) legislation.
The regulatory framework for obtaining a Czech Republic crypto license is comprehensive and designed to ensure the security and integrity of the cryptocurrency market. The key regulations include:
Licensing Authority: The Czech Ministry of Trade and Industry is responsible for issuing and regulating crypto licenses. Businesses engaged in cryptocurrency activities must obtain approval from this ministry.
- Scope of License: Entities involved in cryptocurrency exchanges, wallet services, trading platforms, and other related activities are required to secure a license. This includes both domestic and international companies operating within the Czech Republic.
- Anti-Money Laundering (AML) Compliance: Applicants must adhere to strict AML regulations. This includes implementing robust AML policies, conducting regular risk assessments, and reporting suspicious activities to the Financial Analytical Office (FAÚ).
- Know Your Customer (KYC) Requirements: Licensed entities must establish comprehensive KYC procedures to verify the identity of their customers. This involves collecting and maintaining accurate customer information and performing ongoing monitoring.
- Operational Transparency: Companies must ensure transparency in their operations. This includes providing clear and accurate information about their services, fees, and terms of use to customers.
- Financial Stability: Applicants need to demonstrate financial stability and the capability to manage operational risks. This may involve providing financial statements, proof of sufficient capital, and evidence of a sustainable business model.
- Security Measures: Robust cybersecurity protocols are mandatory to protect against hacking, fraud, and other threats. This includes implementing advanced encryption methods, secure data storage practices, and regular security audits.
- Consumer Protection: Regulations emphasize protecting consumers’ interests. Licensed entities are required to have mechanisms in place for resolving customer complaints and disputes.
- Regular Reporting and Audits: Licensed crypto businesses must regularly report their activities to the Ministry of Trade and Industry and undergo periodic audits to ensure compliance with regulatory standards.
- Penalties for Non-Compliance: Non-compliance with these regulations can result in severe penalties, including fines, suspension, or revocation of the license.
By adhering to these regulations, businesses can legally operate in the Czech Republic’s crypto market, ensuring a safe and transparent environment for consumers and fostering the growth of the cryptocurrency industry in the country.
Types of crypto licensing in Czech Republic
With crypto license or Virtual Asset Service Provider (VASP) in Czech Republic you can provide following services:
| License type | Description of license |
|---|---|
1. Classical License | This license authorizes businesses to facilitate the exchange of one cryptocurrency for another (crypto-to-crypto) for a fee. Requirements:
|
2. Fiat License | This license allows companies to exchange cryptocurrency for fiat money and vice versa, earning a commission on these transactions. Requirements:
|
3. Traditional License | This comprehensive license covers both crypto-to-crypto and crypto-to-fiat exchange transactions. It also allows companies to offer wallet services, including custodial services for cryptocurrencies. Requirements:
|
4. Specialised License | This license focuses on services related to the creation, management, and storage of crypto wallets and encrypted client keys. It is tailored for companies that provide technological and security solutions in the cryptocurrency space. Requirements:
|
Overview of requirements to obtain crypto license in Czech Republic
- Comply with AML/CFT requirements
- Non-criminal record for shareholder and director
- Company must have AML/KYC Policies
- Application form fulfilment
Additional requirements:
- Obligation to store clients data
- Share capital 1 CZK
- Opening a corporate bank account is recommended but not legally required to be done immediately.
Estimated time frames
Business name verification
1 day
Company formation
up to 2 weeks
Documents preparation
1-2 weeks
Trade Office application review
1-2 weeks
Legal services for obtaining Crypto license in Czech Republic
Basic Package
3500EUR
- Company registration
- Provision of Legal Address for 1 year
- Standard AML/KYC Policy
- Registration as licensed VASP (crypto) provider
- Corporate documents
- Communication with regulator authorities
- Legal Support throughout the entire project
This package meets the minimum regulatory requirements for establishing a licensed VASP company
Additional services on request
- Accounting services
- Additional corporate account
- Bank account for keeping client’s funds (safeguard)
- Apostilled corporate documents
- Business plan
- AML/CFT Training material
- Legal framework for launching Your Token
Ready-Made solution
6500EUR
- Registered company
- Legal address for 1 year
- No debts, no liabilities – clean company
- Active license
- Corporate documents
- Assistance with transfer of ownership
Eriks Fijalovs
Head of Blockchain and Crypto
Detailed Requirements for Czech Republic Crypto License
To obtain a Czech Republic crypto license, businesses must fulfill various regulatory requirements and provide specific documentation. Below is an in-depth explanation of the required documents, business premises, share capital, and personnel requirements:
List of required documents
- Power Of Attorney
- This a public document authorized by a public notary, allowing a designated individual or company to act on behalf of another entity. This authorization is essential for tasks such as company incorporation and obtaining a crypto license.
- Power of attorney enables legal representatives to handle administrative and legal processes without the physical presence of the company’s owners or directors.
- AML/KYC/CFT Policy: These are detailed policies and procedures related to Anti-Money Laundering (AML), Know Your Customer (KYC), and Countering the Financing of Terrorism (CFT). Contents:
- AML Policy: Strategies to identify and prevent money laundering activities.
- KYC Procedures: Processes for verifying customer identities and understanding their financial activities.
- CFT Measures: Steps to detect and prevent the use of financial systems for terrorism financing.
- Purpose: Ensures the company complies with regulatory requirements and mitigates risks associated with financial crimes.
- Application Form: The Virtual Asset Service Provider (VASP) application form available on the Czech Trade Licensing Portal. The application form provides the regulatory authority with comprehensive information about the business and its operations. It contains:
- Business details: Name, address, and contact information.
- Nature of business: Description of primary and secondary activities.
- Operational plans: How the activities will be carried out.
- Memorandum and Articles of Association (MAA): These are legal documents prepared during company incorporation. Contents:
- Memorandum of Association: Agreement among the founding members establishing the company.
- Articles of Association: Internal rules governing the company’s management and operations.
- Purpose: Defines the company’s structure, governance, and operational guidelines.
Share Capital and Government Fees
Czech Republic minimum share capital is 1 CZK. During registration process it is possible to state and raise any share capital.
Personnel Requirements
- AML Officer: By local regulations, AML officer is not required to be presented in the corporate structure for obtaining crypto license in Czech Republic. However AML Officer is strongly recommended for future bank account openings, to increase chances and adapt company to higher compliance level.
- Director: Foreigner can be appointed and act as a director in Czech Republic.
Business premises requirements
- To obtain a crypto license in the Czech Republic, it is not necessary to have a local physical office. A legal address will suffice to start operational activity. However, certain payment gateways or digital banks may require a virtual office or physical office with a lease agreement. Legalaes can provide this service upon request.
By adhering to these requirements, businesses can successfully apply for and obtain a Czech Republic crypto license. This regulatory framework ensures that crypto companies operate transparently, securely, and in compliance with local and international financial regulations.
Roadmap of obtaining crypto exchange license in Czech Republic
Any business activity in the Czech Republic is generally subject to the issuance of a trade license (regulated by the Trade Licensing Act) or another specific permit, depending on the type of business activity as dealing with virtual currencies. Czech law generally provides that a foreign person may undertake business activities in the Czech Republic under the same conditions and to the same extent as Czech persons.
For more detailed road map of the project and commercial offer – get in touch with our Crypto professional.
Eriks Fijalovs
Head of Blockchain and Crypto
Documents Preparation
Collaborating with responsible stakeholders to collect the necessary documentation for the company formation process and reserve the company name with the Trade Register. This includes the preparation of the Power of Attorney and business description. Documents are sent to our office in Prague.
Limited Liability Company (S.R.O.) Registration
Translation of the Power of Attorney and non-criminal record into the Czech language. Scheduling an appointment with a notary for the company registration procedure. Once completed, the company data will be entered into the commercial register.
Crypto License Obtainment in Czech Republic
Providing a brief business description to identify where and how the business will be carried out. Preparing AML/KYC/CFT policies. Submitting the application for license obtainment within the RŽP (Trade Licensing Register).
Optional: Hiring and registering an AML Officer within FAÚ (Financial Analytical Office). An AML Officer is needed for more complex business activities to minimize business risks and maximize the success of bank account opening.
Optional: Crypto-Friendly Corporate Account Opening
Based on the analysis of company business activity (potential customers and where business will be carried out), the most suitable, crypto-friendly bank options will be presented.
Collecting corporate and legal documentation for the account opening process. Preparing additional documentation if required (Legal Opinion, Terms and Conditions). Preparing and submitting applications to the chosen bank/banks. Representing the client during the onboarding process until the account is opened.
Advantages of the VASP license in Czech Republic
Obtaining a Virtual Asset Service Provider (VASP) license in the Czech Republic offers several advantages for businesses operating in the cryptocurrency and blockchain sectors. These benefits encompass regulatory, operational, and strategic aspects, making the Czech Republic an attractive destination for crypto businesses. Here are the key advantages:
01
Regulatory Clarity and Compliance
Compliance with EU Regulations:
As a member of the European Union, the Czech Republic adheres to EU regulations, providing a clear and standardized legal framework for cryptocurrency businesses. VASP license holders can benefit from the harmonized regulatory environment across EU member states.
Legal Certainty:
A VASP license provides legal certainty and clarity, reducing the risks associated with regulatory ambiguity. Licensed entities are recognized as compliant with local and international laws, enhancing their credibility and trustworthiness.
02
Market Access and Business Opportunities
With a VASP license, businesses can operate throughout the European Economic Area (EEA) under the principle of passporting. This broad access enables companies to expand their services and customer base across multiple countries without needing additional licenses.
The Czech Republic offers a supportive environment for fintech and crypto startups, with a growing ecosystem of technology companies and innovation hubs. The country’s strategic location in Central Europe provides easy access to major European markets.
03
Operational Efficiency and Flexibility
No Physical Office Requirement:
A legal address in the Czech Republic is sufficient to start operations, eliminating the need for a physical office. This reduces overhead costs and provides operational flexibility, especially for international businesses.
Ease of Incorporation:
The process of incorporating a company and obtaining a VASP license in the Czech Republic is relatively straightforward and transparent. The minimum share capital requirement is only 1 CZK, making it accessible for startups and small businesses.
04
Enhanced Trust and Reputation
Credibility with Financial Institutions:
As a member of the European Union, the Holding a VASP license enhances the credibility of the business with banks and financial institutions, facilitating the opening of bank accounts and access to financial services. It demonstrates a commitment to compliance and regulatory standards, which can be crucial for establishing partnerships and attracting investors.
Consumer Confidence:
Licensed businesses are perceived as more reliable and trustworthy by consumers, leading to increased customer confidence and loyalty. Compliance with AML/KYC regulations helps protect customers from fraud and financial crimes, further enhancing the business’s reputation.
05
Strong Legal and Regulatory Support
Access to Legal Expertise:
The Czech Republic has a well-established legal and regulatory framework, supported by experienced legal professionals specializing in cryptocurrency and blockchain. Businesses can leverage this expertise to navigate regulatory challenges and ensure ongoing compliance.
Government Support:
The Czech government and regulatory authorities are increasingly supportive of blockchain and cryptocurrency innovations. Initiatives to foster fintech development and regulatory clarity make the Czech Republic a conducive environment for crypto businesses.
06
Cost-Effective Operations
Competitive Tax Regime:
The corporate tax rate in the Czech Republic is relatively competitive, and various incentives may be available for technology and innovation-driven businesses. Cost-effective business operations, combined with a favorable tax environment, help optimize financial performance.
Affordable Labor Market:
The Czech Republic offers a skilled and educated workforce at competitive labor costs. This can significantly reduce operational expenses, especially in technical and customer service roles.
07
Quick Processing
One of the fastest options for obtaining a license in Europe, with a processing time of just 2-3 weeks.
.
08
Remote Management
The entire process can be completed remotely through a Power of Attorney, ensuring convenience and efficiency.
09
No Local Substance Requirements
There are no requirements for local substance, allowing shareholders and directors to be foreigners.
Links for legislation related to Crypto license in Czech Republic
A comprehensive database that documents all trade license holders in the Czech Republic, facilitating transparency and regulatory oversight of business activities.
Establishes anti-money laundering measures, requiring due diligence, reporting, and record-keeping to prevent financial crimes within the Czech financial ecosystem.
III. Act on Certain Measures Against the Legalization of Proceeds of Crime and the Financing of Terrorism
Introduces stringent controls and procedures to combat money laundering and terrorism financing, emphasizing the detection, reporting, and prevention of these activities.
The foundational legal framework defining criminal offenses, including economic and financial crimes, and prescribing penalties to maintain public order and protect property rights.
Regulates trade activities in the Czech Republic, setting forth the conditions for conducting business and ensuring fair trade practices and consumer protection.
Governs the establishment, operation, and governance of business companies and cooperatives, promoting ethical business practices and corporate responsibility.
A new legislative measure designed to enforce international sanctions within the Czech Republic, ensuring compliance with global efforts to maintain peace, security, and order.
Taxation of Cryptocurrency Companies in Czech Republic
The taxation of cryptocurrency companies in the Czech Republic is governed by specific regulations aimed at ensuring transparency and compliance with the country’s tax laws. Key aspects of the taxation framework for cryptocurrency companies include:
Corporate Income Tax
Corporate Income Tax
- Corporate Income Tax Rate: Cryptocurrency companies in the Czech Republic are subject to a corporate income tax rate of 19%. This rate applies to the net profits of the company, which are calculated by subtracting allowable expenses from the company’s total revenue.
- Taxable Income: All income generated from cryptocurrency activities, such as trading, mining, and providing related services, is considered taxable. This includes gains from the sale of cryptocurrencies, transaction fees, and any other revenue streams associated with the company’s operations.
Value Added Tax (VAT)
Value Added Tax (VAT)
- VAT on Services: The provision of certain cryptocurrency-related services, such as consulting and exchange services, may be subject to VAT at the standard rate of 21%. However, specific exemptions and conditions may apply, depending on the nature of the services provided.
- VAT on Cryptocurrencies: The sale and exchange of cryptocurrencies themselves are generally exempt from VAT, following European Union guidelines and court rulings that consider cryptocurrencies as a form of payment rather than goods or services.
Personal Income Tax
Personal Income Tax
Employees of cryptocurrency companies are subject to personal income tax on their earnings, including salaries and bonuses paid in fiat or cryptocurrency. The tax rate is progressive, with rates ranging from 15% to 23% based on the level of income.
Social Security and Health Insurance
Social Security and Health Insurance
Cryptocurrency companies must also pay social security and health insurance contributions for their employees. These contributions are calculated as a percentage of the employee’s gross salary and are shared between the employer and the employee.
Record-Keeping and Reporting
Record-Keeping and Reporting
- Accounting Standards: Cryptocurrency companies must maintain accurate and detailed records of all transactions, valuations, and financial statements in accordance with Czech accounting standards. This includes documenting the acquisition cost, sale price, and any realized gains or losses on cryptocurrency transactions.
- Reporting Obligations: Companies are required to file annual tax returns and periodic VAT returns if applicable. They must also report significant transactions and comply with anti-money laundering (AML) and know-your-customer (KYC) regulations.
Penalties for Non-Compliance
Penalties for Non-Compliance
Non-compliance with tax obligations can result in significant fines, interest on unpaid taxes, and other penalties. The Czech tax authorities actively monitor and enforce compliance to ensure that cryptocurrency companies adhere to the applicable tax laws.
By understanding and complying with these taxation rules, cryptocurrency companies in the Czech Republic can operate legally and efficiently, contributing to the growth and stability of the country’s financial ecosystem.
FAQ about Crypto license in Czech Republic
1. How to get a crypto license?
Multi-step process process that inlives registering LLC company, obtaining authorization for cryptocurrency-related activities within FAU - Financial Analytical Office, and setting up necessary infrastructure such as AML policies.
2. For how long is a Czech Republic Cryptocurrency license valid?
Czech Virtual Asset Service Provider authorization, has no validity period, which means there is no need to renew the license, with current regulations.
3. How long does it take to get Czech crypto license?
In overall process full process from company formation, to crypto license obtainment takes about 3-4 weeks, but there is faster possibilities by buying ready-made licensed company, where transfer of ownership will take around 7-10 days.
4. Can foreigners obtain a crypto license in Czech Republic?
Yes, both – shareholder and director can be non-resident of Czech Republic or Europe, which means any foreigner (except black listed countries) can own a crypto company in Czech Republic.
5. Is it possible to open crypto friendly bank account?
Yes, it is possible to open multiple accounts with Czech crypto license, mainly with European EMI’s (Electronic Money Institutions) , our company have partnership with 15+ crypto friendly EU banks, from which client can choose by their own preferences.
Each of our projects receives unique and tailored solutions in accordance with the initial objectives and vision of the shareholders.
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