Just over a decade ago, cryptocurrencies seemed like something unfathomable, distant and incomprehensible. In a relatively short period of existence, blockchain projects have opened all their benefits to the maximum number of users. As a result, the digital market has become a serious competitor to traditional banking and business.

 

Cryptocurrency-related business activity generates handsome revenues. Choosing the right jurisdiction provides good prospects for attracting investment and new customers. If you are interested in registering a crypto company in Slovakia, then feel free to contact Lawrange. Together with our lawyers, you will successfully launch a crypto business in full compliance with the legislation of this country.

 

 

Cryptocurrency exchange license in Slovakia. What is it and why is it needed?

The number of states in the EU officially regulating the field of blockchain assets is gradually increasing. Slovakia is among this number, with one of the highly productive economies in Central and Eastern Europe at the disposal of legal entities, individual entrepreneurs. 

 

A cryptocurrency license is a permissive document that everyone who is going to carry out crypto-activities must obtain. Passing the licensing procedure allows a project to be recognised as legal, i.e. compliant with the laws of the country. The main regulator of cryptocurrency activities in Slovakia is the Financial Intelligence Authority (Finančná spravodajská jednotka).

 

Having a cryptocurrency license in this jurisdiction opens up all possibilities for conducting various blockchain-related activities. Getting a cryptocurrency license in Slovakia is necessary if there are plans to set up a cryptocurrency company:

  • Exchanging different types of digital coins between each other.
  • Exchanging crypto into fiat (traditional money) and back.
  • Custody of customers’ virtual assets.
  • Transferring cryptocurrency between different wallets.
  • The issuance of digital coins.

 

When launching a crypto business, it is important to consider the volatility of the legislation in this area and how it is being adapted. Activities related to electronic coins imply the need for a company to be entered into a special register. Lawrange takes these and other nuances into account to successfully resolve all organizational issues with opening a company in this jurisdiction. To get advice, leave your application online or contact us by phone.

 

 

Advantages of setting up a cryptocurrency company and cryptocurrency license in Slovakia

The jurisdiction is a favourable environment for any business, as evidenced by the presence of representative offices of many global IT businesses, including crypto companies. Slovakia has a positive attitude towards foreign activity and attracting investment due to its small population (only 5.5 million) and significant economic growth. Anyone can register their own company here (subject to a number of conditions, of course).

 

We can help you set up a cryptocurrency company and get a cryptocurrency license in Slovakia. As a result, you will be able to take advantage of all its benefits, including:

  • absence of any limits regarding capital movement, income and hiring of foreign employees;
  • the possibility to use the services of formal shareholders directors;
  • The absence of currency control restrictions, which is beneficial for the efficient development of the crypto business.

 

In addition, the country has a favourable and competitive tax regime, which makes the cost of opening a cryptocurrency company and obtaining a license pay off fairly quickly.

 

 

Anti-money laundering requirements

States have different attitudes to cryptocurrencies. Some of them strictly prohibit any blockchain-based activity, while others, on the contrary, create conditions for legitimate business in this area. One country in Europe that does not prohibit e-coins is Slovakia. However, the extremely strict rules regarding their circulation make it somewhat difficult and time-consuming to start a crypto-company. 

 

The Financial Intelligence Authority (Finančná spravodajská jednotka), together with other regulators, inspects and identifies all businesses operating with blockchain technology. If you are interested in a cryptocurrency exchange license in Slovakia, it is worth knowing that regulation and licensing here is in accordance with the Anti-Money Laundering (AML) and Counter Terrorist Financing (CFT) Acts. According to them, the following principles should be adhered to when running a crypto-business:

  • Identify the nature, level of sophistication of crypto transactions and type of customers.
  • Develop, implement policies and procedures to manage money laundering and terrorist financing risks.
  • Hire only qualified personnel who are familiar with the specifics of Slovak law.
  • Develop and implement CDD (due diligence) and KYC (know your customer) policies to enable full customer identification throughout the business relationship.
  • Continuously monitor transactions based on risk assessment principles.
  • Liaise with the competent authorities in case of suspicious transactions according to AML/CFT.

 

Notice! The particularities of the Financial Intelligence Authority exclude the anonymity factor in cryptocurrency activities, but at the same time, it helps to build trust in Slovak cryptocurrency companies.

 

All in all, without special knowledge, not everyone can master the legal aspect with running a crypto business in this country. But such circumstances should not make you give up your plans to register a cryptocurrency company in Slovakia. All you need to do is to contact Lawrange, where they will provide you with qualified assistance in the comprehensive support of crypto projects. Our specialists keep a close eye on any changes in cryptocurrency legislation, so they can offer only up-to-date solutions for business incorporation in Slovakia.

 

 

Specifics of crypto business licensing

According to the AML law, any company planning to engage in cryptocurrency exchange services (including the use of fiat funds) or crypto-purses should register with the Commercial Registry. The Office of Trade Licensing, where cryptocurrency licenses are issued in Slovakia, should be contacted:

  • In the direction of “exchanger”. Holders of such a permit are allowed to trade and/or exchange fiat for crypto as part of the company’s core business.
  • In the “wallet” line of business, whereby storage of customer funds in electronic coins in the company’s official account becomes available.

 

If two types of licenses are obtained simultaneously, the company gains access to the creation of a cryptocurrency exchange. However, opening a bank account for cryptocurrency activities is quite problematic. A quite common way of solving this problem is the use of various payment services (EMI) in the company’s work. We are also ready to offer cooperation with a bank in Liechtenstein, but the minimum entry threshold is EUR 70 million of annual turnover. 

 

A license for cryptocurrency business in Slovakia (as in all EU countries) is mandatory. In the absence of a license, dealing in electronic assets may lead to large fines and serious penalties for violation of applicable law. The purchase of a license is also considered fraud, which may lead to criminal liability. At the same time, according to the EU regulatory framework, it is perfectly acceptable to buy an already licensed company and then re-register it to a new owner.

 

 

The process of registering a cryptocurrency company in Slovakia

The launch of any crypto direction is preceded by the owner determining the amount and liquidity of the share capital of the future company. A complete set of documents needs to be collected and a number of organizational and legal aspects need to be resolved regarding the beneficiaries, founders, director, registered office, etc.

 

Before obtaining a license, a company must be set up and registered. It may be owned by a non-resident, its director only:

  • an EU citizen;
  • an OECD (Organisation for Economic Co-operation and Development) national;
  • a person with residence permit who performs entrepreneurial activities in Slovakia.

 

A popular legal form in this jurisdiction is a private limited company. Its creation, as a rule, requires 1-1.5 months with full documentation, and about 2 weeks for opening a bank account.

 

Important! The company must have a unique name and a minimum share capital of €5,000 as well as a local bank account (or an account with one of the EMIs in the country).

 

 

Stages of registration 

Setting up a cryptocompany in Slovakia is characterised by complexity and time-consuming and therefore needs professional support. The registration procedure with Lawrange SA is carried out in a few steps:

  • The client provides the company name (3 options).
  • A payment is made followed by the conclusion of an agreement to provide a legal address (it must be paid for 1 year).
  • The client chooses the type of business from an available list or specialization of the future company (subsequently our lawyers will choose the appropriate type of activity).
  • Provide passport, certificate of criminal record with apostille and legally certified translation into the Slovak language, as well as high school diploma (with apostille and translation).
  • A power of attorney is signed for our lawyer at the consulate.

 

With a complete set of documents we apply to the Commercial Registry, where we subsequently register your crypto-company. This is followed by obtaining a local address, a local manager and a trading agreement. Once the setup of crypto vendors and internal processes within the AML/KYC laws are completed, you can start managing your own crypto company.

 

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Nuances of getting a license

Once you have successfully registered your company, you can proceed to apply for a cryptocurrency exchange license in Slovakia. This is made possible by submitting an application with articles of association, other corporate documents and confirmation:

  • Presence of a registered office space or virtual office (e.g. lease agreement or notarised written consent of the owner).
  • Permanent place of residence of the founders, company management.
  • Professional competence to conduct business activities with cryptocurrency – the completion of training or a course related to mastering legal and practical issues of the crypto-sphere. The company founders and managers are also proof of their competence if they have experience in working with cryptocurrencies (there must be proof of this).
  • It is also mandatory to prove that the founder has no criminal record for tax crimes, crimes against justice, credibility of documents, economic relations, property, money circulation.

 

 

Opening a bank account for a future cryptocurrency company

Successful functioning of a cryptocurrency exchange, exchange or wallet is only possible with a business account (involved when you need to pay for running costs) and an operating account – for implementing transactions with customers. 

 

A crypto company with a bank account gets the opportunity:

  • Store funds without the risk of currency depreciation.
  • Reduce costs when dealing with European counterparties in the Single Euro Payment Area (it is faster and cheaper than SWIFT).
  • Eliminate risks for business in the form of raider seizures, account seizures, etc.
  • Increase your own status and reputation.

 

Since the crypto-sphere is characterised by high risks in the AML/KYC context, not every bank or payment system will want to cooperate with virtual asset owners. Lawrange specialists will help you build an efficient payment infrastructure for your crypto company, taking into account these and other important nuances. Turning to us, you can count on assistance in opening a bank account or EMI/PSP payment services.

 

Attention! The European banking sector is in a constant state of rapid change. We monitor the situation and have extensive business connections so that we have something to offer our clients.

 

 

Taxes and reporting on crypto assets 

Income derived from cryptocurrency trading is subject to taxation (According to the Income Tax Act). By trading, Slovak law means any exchange of crypto:

  • to another electronic coin (transfer for remuneration);
  • for property;
  • for a service.

 

When taxing crypto assets, the distinction between income, namely whether it is received, is taken into account:

  • An individual who does not include crypto as a business asset – the rate is 19% or 25%, while it is mandatory to make contributions to the health care system (14% rate). This fact is considered a significant disadvantage as legal entities are exempt from paying health insurance.
  • Individuals who include electronic coins in business assets – the interest rate depends on the amount of income. Thus 15% for entrepreneurs whose income does not exceed EUR 49,790 for the previous tax period, 19% for income which does not exceed EUR 41,445.46 (inclusive) and 25% for income from EUR 41,445.46 (inclusive) and higher. The individual is also liable to pay health insurance contributions.
  • Legal entity – 15% is charged on income not exceeding EUR 49,790 and 21% on income exceeding this amount.

 

In other words, the method of taxation differs depending on who the taxpayer is. No tax is levied if the cryptocurrency is present in the owner’s own account without movement and the owner (legal or natural person) does not derive any income from the crypto assets.

 

Every business dealing with cryptocurrency needs to be registered with the tax office. A yearly period from the date of registration of the crypto company in Slovakia or a standard tax year may be preferred. This type of profit is recorded under “other income”.

 

 

How much does it cost to obtain a cryptocurrency license in Slovakia

The process of opening a crypto startup in this jurisdiction includes the steps described above. The cost depends on the service of interest:

  • Registration of a company – 3 500 EUR.
  • Legal address for 1 year – 680 EUR.
  • Obtain cryptocurrency authorisation for existing company – 6 500 EUR.
  • Incorporate company and get crypto-authorization – 10,490 EUR (turnkey)

 

Information! As the director of the company can be a person with a local residence permit for entrepreneurship, we also provide service for obtaining this document. The fee for a residence permit for business activities is 3,500 EUR.

 

At Lawrange law firm you can order the services of a director for the duration of the residence permit, or on a permanent basis. The price starts from 950 EUR/month. In case of permanent residence permit it is paid for 3 months, in case of permanent establishment it is paid for 12 months.

 

 

Why do you need to choose Lawrange

If you need a crypto license in Slovakia, then we recommend trusting our company. We will help you organize your crypto business in this country in a short time, saving you from unnecessary risks and encountering various pitfalls. We will promptly prepare documents for registration and carry out all necessary communications with state authorities.

 

By contacting Lawrange, you can count on:

  • Honesty and decency – we adhere to the principle of open provision of information about the cost of services and all the nuances of the case, without withholding details of future obligations.
  • Individual approach – we guarantee the solution of any, even non-standard problems, taking into account the needs and expectations of the client.
  • Availability – we are always around, we are easy to contact by any convenient way (by phone, write an email to [email protected] or visit our office in Dnipro, Kyiv or London). If necessary, on our website you can order a consultation by leaving your contact information and we will call you back in a short time.
  • Professionalism – our team consists of certified lawyers, economists, consultants with years of experience in corporate law, fintech support, crypto business in the EU. This makes it possible to efficiently handle company registration, cryptocurrency, financial licenses etc.
  • Confidentiality – even the smallest risk of disclosure or transfer of client information to third parties (without the owner’s consent) is excluded.

 

 

Conclusions

Slovakia is a favourable country for cryptocurrency development, even given the rather strict governmental controls (which have been tightened since 2018). This jurisdiction is on the list of countries that recognise bitcoin and other types of electronic coins. Cryptocurrency trading in Slovakia is legal and therefore taxable. 

 

In order to run a successful crypto business here, you need to form a company and get a special license. The process is not simple and requires specific knowledge, so it is recommended to do it with the help of professionals. Lawrange’s international legal experts monitor the smallest changes in virtual currencies regulation, so they are able to provide clients with exceptional working, efficient and profitable solutions for crypto business development in Slovakia.

 

 

FAQ 

 

Is it possible to open a crypto company in Slovakia without me being present?

Yes, such a possibility is provided in most cases.

 

 

What will increase the chances of successfully obtaining a license?

Proper preparation of an AML policy, a business plan, hiring the right key people (director, manager, etc.), and submitting a proper application to the regulator. It is important to promptly provide correct answers to additional questions that arise as the case progresses. Therefore it is advisable to trust only professionals when it comes to obtaining a license.

 

 

How long does it take to incorporate?

On average it takes around 4 weeks to register a company, 4-6 weeks for a cryptocurrency exchange license in Slovakia. At least 2 more weeks are needed to open a bank account.

 

 

 

 

 

 

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