All you need to know about the Czech Republic Crypto License

Is crypto regulated in the Czech Republic?

The Czech Republic is known as one of the most crypto-friendly countries in the European Union. Regulated by the Czech Ministry of Trade and Industry, cryptocurrency businesses are considered a trade in the country, hence the requirements for their establishment and licensing are way more lenient compared to the specific VASP regulations of other jurisdictions. 

In addition, the Czech Republic is actively working on transforming its capital, Prague, into a European hub of innovation in the blockchain industry. The creation of a Blockchain Connect Association Czech Alliance is another positive factor signaling the country’s open and incentivizing approach toward crypto businesses. 

What is the VASP license in the Czech Republic?

Granted by the Czech Ministry of Trade and Industry, the Czech crypto license is the country’s official legal permit issued to legal entities willing to operate in the crypto sphere. The license allows for such activities as fiat-to-crypto exchange, crypto-to-crypto exchange, custodial and remittance of digital assets, and more. 

The most important step on the way to obtaining a license is to register as a trade prior to submitting a licensing application. A major advantage of the Czech license compared to its other European counterparts is that the minimum share capital requirement to apply for a license is only 1 CZK, which is roughly 0,04 EUR. 

Does it mean that anyone who has this much money can apply for a VASP license in the Czech Republic? Not quite. Below, we will pinpoint the main requirements and guidelines for company registration in the Czech Republic and further license obtainment. 

How do I register for a crypto license in the Czech Republic?

Along with its general crypto-friendly environment, the comparatively lenient licensing requirements of the Czech regulator are what truly attract more and more cryptocurrency businesses to the country each year. In order to register as a VASP and obtain a crypto custody license Czech Republic, you must register a Limited Liability Company (s.r.o) in the country first since the license is only issued to domestic companies.

Then, a vital package of documents both for company incorporation and the licensing application follows. Apart from the golden standard like ID documents and non-criminal record certificates of the key shareholders, a CV, a business plan, and a legal address of the company in the Czech Republic, it is important to adhere to the local AML regulations. It can be done by drafting the AML policies and procedures compliant with the AML laws and the 67/2018 decree of April 11th, 2018, in the Czech Republic and appointing a Money Laundering Reporting Officer (MLRO) who will communicate with the Financial Authority Unit of the Czech National Bank and swiftly report any suspicious activity on the platform. 

Once the entire document package has been prepared, your startup can apply for a Trade License as a cryptocurrency business (VASP) in the Czech Republic. 

About the Czech Republic crypto tax

Taxes are among the primary aspects to consider when registering as a crypto business in the EU Member Countries, notorious for its high tax rates and stringent taxation policies. Surprisingly enough, the Czech Republic has one of the lowest crypto taxes in the EU, with a corporate income tax rate of only 19% for LLCs and 15% on dividends.

The Czech Republic welcomes crypto entrepreneurs. Why not you?

Start developing your crypto business in the stable and innovation-driven economic environment of the Czech Republic. Apply for a VASP license in the country with the support of an expert lawyer from LegalBison. You can receive more information about the license, cost, and requirements by contacting us for a free consultation.