Any investor wants to increase their capital. And since cryptocurrency activities are popular and profitable, funds are invested in this financial sector.
Cryptocurrency license can be obtained in many countries around the world. But it is essential to make a good choice of jurisdiction. This article will tell you what to pay attention to when choosing.
General Information
The cryptocurrency industry is a profitable investment. Digital coins are gaining more and more popularity – every year, the number of cryptocurrency organizations is growing. Such firms exist in almost all areas of the world. But it is worth considering that each state has individual requirements for licensing, so the choice of state must be taken seriously.
Only some companies will be able to fulfill several conditions and will be able to meet the necessary criteria. Therefore, before choosing one of the states, analyzing several jurisdictions that satisfy your firm to one degree or another is recommended.
Tips for Choosing a State to Obtain a Crypto License
Let’s take a closer look at several fundamental factors you need to pay attention to when choosing a jurisdiction to license a crypto company.
Terms of Firm Registration and Licensing
First, you must register a company in the selected country. There are requirements for the location of the office. In most areas, having a physical office within the state is essential. It requires time and financial expenses.
Registering a company will take several days to 1.5 months. But it is worth considering that this does not include opening a corporate account, the terms of which can be up to 2 months. The difference in licensing periods can vary significantly in different countries, ranging from several days to six months or more. Therefore, if you need to start a business as quickly as possible, then the deadline is essential.
Taxation
Tax policy is essential because the more you pay, the less profit the company will have. Tax amounts can vary even within one state, not to mention comparisons between countries (from 5 to 32%). It may depend on various factors:
- form of organization;
- types of activities provided;
- profit margin;
- are there FIZ (free industrial zones) within the firm where there may be utterly different taxation?
In order to attract investors, some countries establish preferential taxation, or there may be no tax on cryptocurrency activities. Therefore, if the company does not have a sizeable financial scale, then the amount of taxes will significantly affect the profit.
Financial Expenses
A novice person in business can only sometimes pay a hefty amount at the start when registering a cryptocurrency activity. Therefore, you need to find out in advance how much you will have to invest when opening a cryptocurrency business:
- company registration from 700 to 4500 euros;
- minimum authorized capital from 12,000 to 100,000 euros or more (sometimes there are no requirements for the amount of capital);
- opening a corporate bank account from 400 to 3000 euros;
- licensing – up to 35,000 euros.
Each state will have its own cost, which can differ tens of times. Considering that this can be a significant amount, providing for this type of business registration costs in advance is recommended.
Requirements
Each area has specific requirements for registering a company and getting permits. Here are some examples:
- the office must be accurate and located within the state (but there are countries where business can be conducted remotely);
- the management team and leading managers must have a higher financial and economic education, have no criminal record, and at least one director must be a resident;
- implement AML (anti-money laundering) and KYC (know your customer) policies;
- there must be appropriate technical equipment for the office, including software (the Regulator will check this).
It is a partial list, so you must be prepared to fulfill all the conditions. Otherwise, registration and licensing may be denied.
Principles for Regulating Cryptocurrency Activities
As a rule, each state has a Regulator responsible for permitting and monitoring the activities of cryptocurrency companies. It is essential that there is a loyal attitude on the part of regulatory authorities and support is provided when various problems arise.
Conclusion
As you can see, it takes more time and effort to make a choice, considering many factors. And to avoid mistakes, set priorities for your company. For some, the timing of registration is essential, while for others, the focus is on financial costs and taxation. Of course, it is better when all the main factors, or at least most, satisfy your conditions.