How to get a crypto license? Simple Tips
Features of obtaining a crypto license in different countries. How to simplify the process of getting a permit? What is worth knowing?
Crypto license: how to simplify obtaining?
In many countries, interest in the crypto industry is overgrowing, and at the same time, the number of crypto organizations that want to work legally is also increasing. One of the most critical steps in starting a crypto firm is obtaining a license. It guarantees that the company will work legally, honestly, and openly. The jurisdiction choice depends on your company’s characteristics and the market where you want to work. So, a crypto license in the UK is needed if you want to work legally in Foggy Albion.
How to create a crypto company?
Creating a crypto company is a rather complicated process that involves the implementation of essential steps:
- Understand what services you want to provide;
- Software development;
- Company registration;
- Collection of necessary documents;
- Checking how your company complies with the requirements of government authorities in the country where you work;
- Obtaining a license.
Why should you get a crypto license?
A crypto license is a work permit issued by government agencies in different countries. Interest in the crypto industry is snowballing, so the governments of various countries are striving to develop sustainable rules for regulating this industry. Some countries, such as India or China, completely prohibit the use of cryptocurrencies, while other countries, on the contrary, allow crypto companies to develop, but under certain conditions. Thus, the state authorities of such territories ask organizations to register and go through the verification process, and after that, they allow working on the market legally.
Suppose the company still needs to receive a license. In that case, it is automatically
recognized as a fraudster, which means that the platform is immediately blocked, and the owners have severe problems with the law. Thus, it is worth getting permission if you want your company to work stably and not have issues with government agencies.
Another point worth mentioning is that investors are more actively cooperating with licensed companies, as this is a guarantee that they are definitely not fraudsters and work honestly. The same applies to regular customers. It will be much easier for you to increase your audience, which means you will develop more rapidly.
Types of crypto exchanges and licenses
Today there are 2 main types of crypto exchanges — DEX and CEX. You can also select the third type of exchange (hybrid), which combines the first two features. What is the difference between them, and how does this affect obtaining a license?
CEX, or centralized exchanges, is the most common crypto exchange. Here, all user money is stored on the platform itself. In general, this is very similar to a regular bank, where the user keeps his assets and can exchange them, sell or buy new ones. To get started here, the user must register and replenish the account. You cannot work anonymously on such platforms.
DEXs, or Decentralized Exchanges, are platforms that allow you to exchange, sell or buy crypto assets without storing them in an internal wallet.
It is very similar to the marketplace, where users browse the offers and purchase the products they like. Here you can often trade anonymously.
It is also worth mentioning that exchanges specialize exclusively in exchanging cryptocurrencies for crypto assets or only for fiats.
How does this affect obtaining a license? So, only those platforms that adhere to the KYC (Know Your Client) policy can get a permit. Thus, if you want to obtain a crypto license in Germany or another country, you cannot provide your clients with the opportunity to work anonymously. The exception is Poland, where licensed exchanges allow you to make anonymous transactions with more restrictions.
In addition, some jurisdictions, such as the Czech Republic, have developed different types of licenses for exchanges that only exchange cryptocurrencies or allow a crypto exchange for fiat. As you can see, the choice of jurisdiction and license type strongly depends on your company’s characteristics, so it is better to consult with our specialists in advance.
What jurisdictions are suitable?
Today, there are a large number of jurisdictions that require crypto companies to obtain a license. We want to discuss the most popular of them.
Lithuania
If you want to get a crypto license in Lithuania quickly, there will be no problems. Obtaining a work permit here takes only a month, but many times less than in other jurisdictions. In addition, this country does not set special requirements for applicants:- The company must be registered in that jurisdiction;
- Authorized capital from 2500 euros;
- Payment of fees;
- At least one owner and shareholder;
- No criminal record;
- Good business plan.
Poland
Poland started issuing licenses to crypto companies relatively recently, but many have already appreciated the benefits of such a solution. While most jurisdictions prohibit anonymous transactions, in Poland, companies can provide their own this opportunity, but on the condition that the size of transactions does not exceed 1000 euros (previously, this limit was much higher). To obtain a crypto license in Poland, you need to go through several necessary steps:- Register a company in this jurisdiction;
- Get PESEL;
- Apply for a license.
Switzerland
A Crypto license in Switzerland is a good solution for those who want to avoid overpaying for taxes. The government of this country is interested in developing the crypto industry. Therefore, it has set meager taxes for such companies. In addition, there are simple requirements for crypto companies. If you are willing to work honestly, have a good business plan, and are eager to comply with the KYC/AML policy, then there will be no problems.Estonia
Obtaining a crypto license in Estonia takes about 3 months, as your company will undergo more complex verification than in Lithuania. In general, the requirements are not too different:- The company must be registered in that jurisdiction;
- The authorized capital of at least 12 thousand euros;
- The director of the organization must be a resident of Estonia;
- No criminal records among team members;
- Good business plan.
USA
Obtaining a crypto license in the USA is a rather complicated process since each state sets its rules for regulating the crypto industry in addition to federal laws. Choosing which states you want to work in and getting a work permit separately would be best. The process is further complicated because the laws here are constantly changing, so you need to contact our specialists to get the most up-to-date information.UAE
Among all the countries in the Middle East, the UAE has the most elaborate laws to regulate the crypto industry. The state authorities here have long been able to appreciate the advantages of the blockchain, so they have begun to use this technology widely. As a result, obtaining a crypto license in the UAE will be easy. Many people think Dubai is an independent country within the UAE, which is not surprising because slightly different laws apply here. Many companies prefer to obtain a DMCC crypto license, as it is much easier to do this, and there are a few more opportunities.Malta
If you want to get a Malta crypto license, you should be prepared because doing this will be more challenging than in other offshore zones. So, there are 4 types of crypto licenses, and the choice depends on the characteristics of your company. Understanding them is difficult, so you should contact our specialists for help. The term for obtaining a permit is from 3 to 6 months, depending on the characteristics of your company. Our specialists remain in touch during this time, as legal advice may be needed anytime.Czech
This country was one of the first to start taking steps toward the quality regulation of the crypto industry. Obtaining a crypto license in the Czech Republic will be easy since the jurisdiction does not impose complex requirements. However, it would be best if you remembered that here you are given 4 types of licenses to choose from, where the choice depends on the features of the functioning of your company. So, a classic permit is suitable if you provide services for exchanging cryptocurrencies for crypto assets. Still, as soon as you decide to increase the number of functions and start exchanging crypto for fiat, then you need to issue a standard license.Which countries do not require a license, and how do crypto companies operate here?
Today there are countries where you can pay for goods and services using cryptocurrencies and conduct business, but there is no need to obtain a license. However, you can still register and pay taxes.
Great Britain
Today no law obliges one to obtain a crypto license in the UK; however, each company that wants to work here must register and pay taxes correctly. Today, the Innovation Hub program has been created here, where you can get the opportunity for legal support. In addition, you must pay corporate tax and value-added tax. You can learn more about the peculiarities of cryptocurrency regulation in the UK from our specialists.
Canada
You do not need to obtain a crypto license in Canada. Here, crypto assets are equated with securities, and companies that engage in such activities do not need to be licensed. However, your company must register and pay taxes. Different rules for regulating cryptocurrencies may work in other provinces, so getting more detailed advice from our specialists makes sense.What determines the choice of jurisdiction?
Choosing a jurisdiction is an incredibly complex process. You need to pay attention to the following points:- Amount of taxes and duties;
- Requirements for companies;
- The license covers which jurisdictions;
- How long does the work permit process take.
Conclusion
Obtaining a crypto license is a complex process that requires specific skills and knowledge. That is why it is better to seek help from our company’s professionals. They will conduct a full consultation and tell you which jurisdiction suits you best and how you can get a work permit here.FAQ
For your crypto company to operate legally, you need to obtain a license in the jurisdiction of your choice
The easiest way to get a crypto license is to seek help from lawyers specializing in this matter. At СryptoLicense, you will find specialists who will answer possible questions and help with paperwork.
The cost of the license mainly depends on the jurisdiction you have chosen. It includes fees, shares capital, and legal fees.
If your company refuses to obtain a license, you may get in trouble with the law, and the platform will be blocked.
Yes, after obtaining a crypto license, you must pay taxes regularly. Their size depends on the jurisdiction you have chosen
Usually, countries offer crypto companies 2 types of licenses — for the exchange and the wallet. To profit from the sale of cryptocurrencies, you must obtain a permit for exchanges. The exception is the Czech Republic, where there are 4 types of licenses for crypto companies.