Crypto License. Why Is It and Why Is It Important In 2023?

Crypto license, as a term, is generally used to refer to a certain type of certification that allows a particular company to carry out different activities in the field of cryptocurrency. Not every crypto license has something to do with a country’s crypto legislation. In some cases, a generic business license can be called a crypto license since it enables the company to run its crypto business in a given country. But in other cases, additional evaluations are required to grant a specific crypto license. In general, when looking for a crypto license, the most important thing to do is pick a country that will grant you a crypto license. Each country has different requirements and suits for different projects. For instance, a crypto license in Czech Republic will be different from a crypto license in the U.S. or Estonia.

What License Options Are Available in Europe?

Europe’s crypto landscape is dominated by several countries that propel their respective economies through the activities of cryptocurrency businesses. The most prevalent jurisdictions are Germany, Lithuania, Estonia, and the Czech Republic. Each country’s legal framework concerning cryptocurrency is different, so it is best that you figure out your project’s needs, goals, and activities before looking for a license.

For instance, Germany, arguably Europe’s most important country when it comes to cryptocurrencies, is one of the most prestigious crypto jurisdictions, but not all projects place a strong emphasis on the reputational advantages of registering a German business entity and obtaining a license. 

What Attracts Czechs to Obtain a Crypto License? 

Local crypto entrepreneurs have long realized the advantages of obtaining a crypto license. The crypto boom in the Czech Republic coincided with the sharp rise in the number of Czechs who opted for a crypto license. The locals were adamant about their choice of a license and oftentimes expressed their desire to obtain a license by convincing their foreign counterparts to obtain a license as well.

There are many advantages of receiving proper accreditation for your business, including the fact that you are now able to secure additional funding, partake in governmental programs and contribute to many business activities within the country. Czech entrepreneurs cite the tremendous monetary gain as one of the major benefits that they enjoy as a result of a Czech cryptocurrency license.

How Do I Get a Crypto License in the Czech Republic?

A crypto firm must be legally set up in the Czech Republic before applying for one of the four available licenses. The benefits of forming a Limited Liability Company (SRO) in the Czech Republic include the prospect of being immune from an audit of finances, a modest minimum capital prerequisite, and a small number of founders. As long as all paperwork is filed on time, it may be set up in as little as 21 days. The process includes two key stages:

1. Gathering the paperwork (1-2 weeks);
2. SRO registration (2-3 weeks).

With the company all set up, you will be able to apply for a license. It will take up to 2-3 weeks to hear back from the government regarding your application. Then, you just need to open a corporate bank account and you are good to go.

For Which Companies Will a Crypto License Be Arranged in the Czech Republic? 

In total, there are four different licenses for four different types of crypto activities:

1. Transactions involving the buying and selling of virtual currencies for fiat ones (Fiat to Crypto, Crypto to Fiat). Needed for making a monetary transaction with cryptos.
2. Swapping one kind of virtual money for another (Crypto to Crypto). Facilitates the purchase and sale of digital money between businesses for fiat cash.
3. Custodian wallet service. It entails creating digital currency wallets and holding onto the private keys. 
4. Online money transfer system. Businesses are offering wallets to manage the generation and storage of encoded client keys.

Additional crypto-related activities are also included, but this is where the legal base gets a little more complicated, and the licensing terms are not always clear-cut. It is always important to make sure that you receive help from qualified professionals that know what it takes to properly set up a firm in CZ with a suitable type of license.

Benefits Of a Crypto License in the Czech Republic

The benefits of holding a crypto license in the Czech Republic are numerous. The following list includes only a handful but is already enough to make it seem like an excellent business opportunity:

• The EU’s quickest licensing process (two to three weeks). The Public Trade Licensing Register (TLR) registration for exchange and custody operations takes one to two weeks after firm formation takes place (one week).
• Permits unrestricted access to EU markets for customer onboarding. EIDAS verification procedures, in addition to standard KYC practices, are required for non-EU nationals.
• There are no residency obligations in place. It is possible to register a business with headquarters, along with the CEO and AML officer all outside the country.
• There are no stringent standards for admission to upper management. There is no screening process for members of the board or the KYC officer other than the submission of a clean-slate guarantee.
• Scored 5 out of 37 on the Tax Competitiveness Index, making it one of the EU’s most appealing tax frameworks.
• Low legal fees, both upfront and recurring. Costs might range from €1900 to €7000, depending on the infrastructural elements used.
• There is no minimum share capital needed. 1 CZK is all that is needed to successfully register a business account.

Conclusions

Summing up all of the above, a cryptocurrency license in the Czech Republic may offer a very welcome alternative to setting up your crypto business in the more prominent and, therefore, demanding countries. You can easily set up shop from home and in-house, so the only thing separating you from one of the most advantageous jurisdictions available today is a few thousand dollars.

The only caveat here is that there are conditions that must be met when applying for a crypto license. You need to hire a qualified company that knows what it takes to properly set up your firm.