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 typeDescription of license
Classical
  • Holders of this license are authorized to exchange one cryptocurrency for another for a fee (Crypto/Crypto).
Fiat
  • This license allows companies to exchange cryptocurrency for fiat money and vice versa for a commission (Crypto/fiat).
Traditional
  • License covers both crypto-to-crypto and crypto-to-fiat exchange and transactions. Companies can offer wallet services (Custody)
Specialised
  • This license allows companies to offer services related to the creation and storage of crypto wallets and encrypted client keys.

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 to obtain crypto license in Czech Republic

Business name verification

1-3 days

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

1

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.

2

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.

3

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.

4

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:

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.

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.

Czech Republic commercial register for VASP companies
Czech Republic crypto license regulatory body

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 valid Czech Republic cryptocurrency license?

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.

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