CASP License in Bulgaria

Bulgaria is an attractive country for starting and developing a cryptocurrency business due to its favorable economic climate, loyal regulation of digital assets, and accessible legal framework.

Bulgaria’s membership in the EU guarantees financial stability, making it a promising jurisdiction for both new projects and experienced companies that are actively expanding. Local legislation creates comfortable conditions for operating in the crypto sphere – from young enterprises to large-scale players targeting the global market.

Why CASP License in Bulgaria is a Smart Choice for Your Business

The registration of a cryptocurrency company in Bulgaria attracts crypto companies thanks to its advantageous tax policy. Taxes here are among the lowest in Europe. This allows businesses to start with lower costs and obtain a license for operations in the field of digital assets without significant financial burden.

The following are some other key benefits of the CASP License Bulgaria:

1. The procedure for establishing a cryptocurrency company in this country is significantly simplified. The licensing process takes less time than in most EU states.
2. Local regulations facilitate the launch and management of a crypto business. This enables companies to start operating efficiently without unnecessary complications and with minimal expenses.
3. A license obtained in Bulgaria covers a wide range of cryptocurrency operations. This includes fiat exchange, trading of various digital assets, as well as storage, transfer, and acceptance of virtual currencies within financial transactions.

So, which laws must be followed to take advantage of these appealing opportunities?

Overview of Bulgaria’s Regulatory Environment for CASPs

The updated European Union legislation on crypto-assets – Regulation (EU) 2023/1114 (known as MiCA) – introduces a unified legal framework for the cryptocurrency sector across all EU member states, including Bulgaria. Although this Regulation officially came into force on June 29, 2023, the majority of its provisions began to apply on December 30, 2024. An exception includes some requirements that came into effect earlier – from June 30, 2024.

EU countries are entitled to implement a transitional period for licensing Crypto-Asset Service Providers (CASPs). The duration of this period may extend up to July 1, 2026, depending on whether the country has stricter national regulations in this area. If the local legislation is less strict, the transitional period may be shorter or not applied at all.

Bulgaria has not yet made a decision regarding the implementation of a transitional mechanism. Since the current legislation does not contain requirements stricter than those in MiCA, the country is unlikely to make full use of the allowed period. Therefore, crypto companies already operating or planning to operate in the Bulgarian market should study the provisions of national law and the MiCA Regulation to prepare for the new legal environment.

Currently, operations involving virtual assets in Bulgaria are regulated by the provisions of the Measures Against Money Laundering Act (MAMLA). The category of service providers working with digital assets includes not only providers exchanging virtual currencies for fiat or storing funds in custodial wallets, but also those who:

• exchange or transfer cryptocurrency;
• provide services for virtual asset storage or management;
• organize public offerings of digital assets (raising capital through tokens).

All these companies must comply with MAMLA requirements:

• conduct customer identification;
• assess risks;
• report suspicious transactions;
• cooperate with the Bulgarian authority responsible for preventing money laundering and terrorism financing.

They must operate in the field of crypto-assets only after being entered into the public register of the National Revenue Agency (NRA). Moreover, the new rules stipulate that individuals associated with such companies (representatives, shareholders, beneficiaries) must meet specific criteria to complete the registration.

Providers previously registered under the old regime are obliged to update their data and submit supporting documents within the established deadlines. Failure to comply will result in cancellation of their registration.

The updated law also provides a clear definition of a “virtual asset”: a digital form of value that can be used for payment or investment purposes and is transferable or sellable through digital channels. In cases where the asset is simultaneously considered a financial instrument, MAMLA does not apply (except for banks and investment firms, which are subject to the general provisions of the law). Meanwhile, such activity must be licensed under separate regulations, such as the Credit Institutions Act, the Markets in Financial Instruments Act, or other regulations.

Similar to MiCA, providers of crypto services in Bulgaria are also subject to several other EU acts: the Prospectus Regulation; the directives establishing transparency obligations, prohibiting market abuse, and ensuring settlement finality; along with the Short Selling Regulation, the Central Securities Depositories Regulation, and the Regulation on a pilot framework for market infrastructures based on distributed ledger technology. All these documents have already been implemented into Bulgarian legislation and are mandatory for compliance.

Categories of CASP Licenses Available in Bulgaria

The MiCA Regulation introduces new capital requirements for CASPs, classifying them into three categories based on the type of activity and the degree of responsibility toward clients:

1. Category 1 CASPs. For companies engaged in basic activities – such as receiving and transmitting orders, client advisory, and placement of crypto-assets – a minimum capital of EUR 50,000 is required. Due to the lower risk level of such operations, the capital requirements remain moderate.
2. Category 2 CASPs. Companies that, in addition to Category 1 functions, perform exchange of crypto-assets for fiat currencies or other digital assets and manage trading platforms must have a minimum capital of EUR 125,000. These companies engage in active market operations, requiring a higher level of financial security.
3. Category 3 CASPs. The highest capital requirement – EUR 150,000 – applies to companies providing all services from the first two categories and additionally performing custody and management of crypto-assets on behalf of clients. This level of responsibility for client assets demands maximum financial stability.

Companies planning to obtain a CASP license must have at least one bank account within the European Union. For Virtual Asset Service Providers (VASPs), it is advisable to adjust their capital to meet the new requirements in advance, to avoid administrative complications and facilitate the transition to MiCA regulatory standards.

Key Requirements for Securing a CASP License

Under the MiCAR Regulation, CASPs must be registered legal entities equipped with a structure that upholds client protection and regulatory compliance.

MiCAR also requires CASPs to establish a business continuity plan covering data backup, disaster recovery, and crisis response scenarios to ensure stable company operations.

To obtain a CASP license, detailed information about the business activity must be submitted.

Minimum Capital Requirements

Applicants for a Bulgaria CASP License must have financial reserves to cover risks related to breaches of confidentiality, technical errors, or obligations to clients. These guarantees can be ensured either through own capital or via insurance.

Compliance with AML and KYC Regulations

CASP organizations are required to implement internal control policies and risk management systems that account for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures. They must develop procedures for:

• client identification;
• risk assessment;
• transaction monitoring;
• implementation of measures to prevent operational, legal, and IT threats.

Companies must also ensure the protection of clients’ personal data and assets. The Regulation requires implementation of security mechanisms, including access control, data encryption, and regular audits to ensure confidentiality and data integrity.

Additionally, companies must have a clearly defined procedure for handling customer complaints, respond promptly to inquiries, and provide information about the complaint submission process.

Rules must also be implemented to identify, manage, and disclose potential conflicts of interest – both internal and external – to ensure transparent and fair client relations.

Licensed CASPs are obliged to continuously comply with all MiCA requirements. This includes regular AML/CFT checks, proper record-keeping, timely updates of data protection procedures, and compliance with business continuity standards.

Financial Reporting Standards

CASPs are obliged to maintain detailed records of all their activities, services provided, orders received, and transactions executed. They are free to choose any data storage format they find most convenient, provided that, upon request by regulators, specific data can be converted into the format defined by regulatory requirements. The stored information must be sufficiently comprehensive for supervisory authorities to verify whether the CASP fulfills its obligations toward users and complies with the principles of market integrity.

Clients must have the right to access relevant information upon request.

Businesses registered in this jurisdiction are required to submit the following reports annually:

• Financial statements (including primary documents, contracts, invoices, bank statements).
• Tax declarations.
• Audit opinion (possibly with a requirement to provide additional documents).

Auditing is mandatory for companies that meet at least one of the following criteria: more than 50 employees, an annual turnover exceeding 8 million BGN, or asset value above 4 million BGN. The amendments also introduce stricter financial audit rules.

Company Directors and Ultimate Beneficial Owners (UBOs)

A company must have an officially registered address in the jurisdiction where the license is obtained, and actual management must be carried out from the territory of the EU. The management must include at least one director – an EU resident – responsible for oversight in accordance with local legislation.

CASP Licensing Process in Bulgaria

To prepare for submitting an application for obtaining a CASP license in Bulgaria, follow the following procedure.

Assembling the Required Documentation

Each CASP is required to compile a comprehensive set of documents, including:

• a detailed business plan;
• a program of intended activities;
• internal risk management policies;
• anti-money laundering and counter-terrorism financing procedures.

A detailed description of IT systems and cybersecurity measures, as well as comprehensive information on key executives and shareholders, is mandatory.

Registering a Legal Entity in Bulgaria

A straightforward registration procedure in Bulgaria attracts investors and entrepreneurs. Below is a step-by-step overview of the process:

Step 1: Choose a legal form and company name

Starting your own business in Bulgaria may seem complex and time-consuming. By cooperating with an EOR, you can avoid administrative obstacles and dedicate your attention to developing your business. EOR can perform tasks such as:

• hiring personnel;
• onboarding;
• payroll;
• tax compliance;
• adherence to local labor laws.

This ensures legal transparency and an operational launch without the need for physical presence.

If you plan to register a separate legal entity, choosing the right legal form is crucial. Your choice determines the level of managerial flexibility, tax obligations, and liability.

Possible options:

• Sole proprietor – suitable for self-employed individuals but entails full personal liability.
• Limited liability company with several shareholders (OOD), or sole owner (EOOD) – best suited for small or medium businesses, offering limited liability.
• Joint stock company with several shareholders (AD) – ideal for large enterprises aiming to attract investment via stock exchange.

Choose a unique company name. Its availability must be checked in the Company Register.

Step 2: Prepare and submit required documents

After deciding on the legal form and company name, prepare and submit the documents to the Trade Register.

Key documents:

• Articles of Association or founding agreement.
• Proof of legal address in Bulgaria.
• Founder and director information (passport data, contacts).
• Proof of initial capital contribution (if required).

Submission methods:

• Online: via the electronic portal of the Commercial Register.
• In person: at a local office.

When working with an EOR, this step is handled entirely by the employer under contract.

Step 3: Tax registration and compliance

Main taxes:

• Corporate tax: 10%, registration with the National Revenue Agency.
• VAT: 20%, mandatory for annual turnover exceeding EUR 25,600.

Ongoing obligations:

• Bookkeeping.
• Annual financial reporting.
• Compliance with labor standards.
• Mandatory social security contributions.

With an EOR, all these obligations are automatically handled on your behalf, with no need for your personal involvement.

Step 4: Accelerated business launch via EOR

Engaging this service allows you to start operating in Bulgaria as quickly as possible:

• No need to register a separate legal entity.
• Full compliance with current tax and labor legislation at the local level.
• Focus on scaling the business while the EOR handles payroll, administration, and legal documentation.

By choosing an EOR, you gain direct access to the Bulgarian market without unnecessary bureaucratic barriers.

Submitting the Application to the Bulgarian Regulatory Authority

In the license application submitted to the relevant competent authority, the CASP must explicitly state:

• the name of the company, its legal structure, and official registered address;
• specific types of crypto-asset services intended to be provided;
• a detailed description of internal AML/CFT programs;
• a business continuity and data protection plan;
• a description of the risk management and internal control system.

License Review and Approval

Authorized bodies carry out an in-depth audit of the submitted data and documents, evaluating their compliance with MiCAR requirements. They also check the company’s readiness to comply with all regulatory standards. It is important to confirm that all key persons and shareholders have an impeccable reputation and meet the requirements of integrity.

After the application is approved, the CASP is licensed to operate in the EU, permitting it to offer crypto-asset services across all member states. The CASP may also offer cross-border services simply by notifying the regulatory authorities of other EU countries of its intention to operate there, without needing additional authorizations.

Opening a Bank Account for Your CASP in Bulgaria

Opening an account in Bulgaria is a mandatory step for doing business. It is used for tax payments, salary transfers, and other operations.

Options:

• Traditional banks: UniCredit Bulbank, DSK Bank – offer a full range of services.
• Fintech services: Wise, Revolut – a good alternative for non-residents needing mobility.

Required documents:

• Certificate of registration.
• Founding documents.
• Proof of commercial activity.
• Information about the responsible person.

Opening a bank account can be burdensome, so the EOR provides an option to avoid this – they take over payroll and financial processing functions.

With an EOR:

• Employees receive their payment in BGN or a different currency.
• Tax compliance is ensured without your involvement.
• You are relieved from learning complex international payroll procedures.

Taxation Overview for CASP-Registered Entities in Bulgaria

The tax regime for crypto-assets in Bulgaria, including for non-residents, aligns with the definitions under MAMLA and the European Central Bank’s policy, which recognizes both individuals and legal entities as taxpayers. Cryptocurrencies are exempt from VAT, as they are considered financial services. However, other crypto-related economic activities may be subject to the standard 20% VAT rate.

Typical tax rates in Bulgaria:

• Corporate income tax: 10%.
• Personal income tax: 10%.
• Social security contributions: Total 32.70–33.40% (18.92–19.62% paid by employers, 13.78% of gross income by employees).

Types of taxable crypto-asset income:

• Profit from trading/exchange.
• Income from acquisition.
• Profit from mining and staking.

These are subject to applicable rules.

The total net result of all operations forms the annual taxable base, which must be reported in the annual tax declaration. It can arise even from exchanging one crypto-asset for another if the acquired asset generates a profit. There is no advance tax on cryptocurrencies.

Income from acquiring or mining crypto-assets is considered income from economic activity under the Personal Income Tax Act. In the case of acquisition, this may involve buying mining equipment and subsequently selling the mined crypto-asset. Such activity qualifies as economic, and the taxable result is determined under the Corporate Income Tax Act (CITA). If mining or acquisition is conducted through a company, allocated expenses may reduce the net taxable income.

Staking is considered income-generating activity, although the Personal and Corporate Income Tax Acts do not clearly define it. According to the National Accounting Standards, companies acquiring any crypto-asset must register it as an increase in intangible assets and periodically revalue it at fair or market value.

Estimated Timeframes and Costs for CASP Licensing

Bulgaria is known for offering some of the most affordable crypto licenses in Europe. Thanks to this attractive feature, the country becomes an ideal location for startups.

There are significant discrepancies between the draft Bulgarian legislation and the MiCA standards regarding the time required for processing and issuing a license. Specifically, the draft allows the Financial Supervision Commission to review applications for up to six months. In contrast, MiCA sets much stricter timeframes: up to 60 working days for crypto licenses and up to 40 working days for authorizations of crypto-asset services.

These differences may create certain difficulties for companies that wish to obtain licenses as quickly as possible to begin or continue their crypto-asset operations. Moreover, this increases the risk of “silent refusals,” where the absence of a response from the regulator within the specified period automatically equates to a rejected application.

Why Choose Lawrange for CASP Licensing in Bulgaria

By working with our law firm, you receive professional support. For example, opening a bank account in Bulgaria typically requires a personal visit. That is why Lawrange offers organizational and support services. With prior agreement from the financial institution, we can also arrange remote account opening via power of attorney.

Thanks to the decade-long experience of Lawrange’s experts in supporting international business, our clients significantly save both time and money.

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