Cryptolicence in Czech Republic: Discover Central Europe

The Czech Republic has become a welcoming hub for cryptocurrency companies, offering a streamlined licensing process and a regulatory environment that balances compliance with innovation. Companies must adhere to existing AML/CFT regulations, ensuring consumer protection and financial stability. The government's proactive support for the industry is evident, highlighting its understanding of the potential benefits of blockchain technology and cryptocurrencies. This combination of clear regulations and a supportive stance creates a fertile ground for crypto businesses to thrive in the Czech Republic.

Czech Republic is a country with minimum bureaucracy and simple process of autorization

Key Numbers about Cryptolicense in Czech Republic

6 weeks

average term of obtaining license

19%

corporate income tax (CIT) rate

€1

minimal contribution for share capital

up to 19%

Capital Gains Tax rate

€0

application fee for License

21%

Value Added Tax rate

Legal Opinion about Cryptolicense in Czech Republic

Ganna Voievodina

Manimama, CEO

"Choosing a crypto license in the Czech Republic is a smart move for businesses entering the cryptocurrency market. The country's regulatory framework promotes security and innovation, ensuring compliance while encouraging growth. By obtaining a license in the Czech Republic, companies demonstrate their commitment to responsible practices and build credibility within the global cryptocurrency space. Let us help you navigate the process and secure your Czech crypto license. Contact us today to streamline your entry into this exciting market".

Types of Activities with License

Exchange crypto to crypto: VASPs are authorized to facilitate the exchange of various virtual assets, including utility tokens and coins, ensuring diversified trading options.

Custodial wallet services: VASPs, through custodial wallets, offer a secure means of storing cryptocurrencies on behalf of users, with operators having the ability to open wallets while maintaining control over private keys.

Crypto transfers: VASPs are authorized to facilitate the secure transfer of cryptocurrencies from clients' wallets to designated third-party wallets, presenting an alternative to traditional fiat wire transfers.

Account statements issuing: VASPs have the right to reflect the balance and issue the account and transaction statements.

Exchange crypto to fiat and fiat to crypto: VASPs enable the conversion between cryptocurrency and fiat currencies, offering customers the flexibility to transact in multiple currencies.

Crypto processing and crypto acquiring: VASPs hold the capability to conduct the service allowing merchants to accept crypto as a payment with a consequent transfer of crypto to the merchant or conversion it to fiat.

On-ramp and off-ramp services: VASPs have the wide opportunities for the business development including providing B2B services as on-ramp, off-ramp, white label products which Manimama is ready to help to launch including payment service providers connection.

Token sales: The last but not the least! VASPs are authorized to conduct ICO offering the utility and limited-use e-money token.

Choose the Package of Services

Advanced

Exhaustive set up of company infrastructure for the start of operational activity

€6,000

  • Company formation in Czech Republic
  • VASP autorization
  • Registered address for 1 year
  • Individual AML/KYC policies
  • Handling the communication with Financial Analytical Unit (FAU)
Order now

Basic

VASP authorization under the minimum regulatory requirements

€5,000

  • Company formation in Czech Republic
  • VASP autorization
  • Standart AML/KYC policies
Order now

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Step by Step Description

Step 1. Initiating the process by obtaining pertinent documents from the client

  • Performing an initial and comprehensive analysis of the project's specific requirements
  • Assembling and verifying essential Know Your Customer (KYC) details along with a comprehensive and accurate business description
  • Formulating and organizing the necessary documentation for the Power of Attorney (PoA)
  • Securing the client's criminal record certificate for compliance purposes
Duration: 3 weeks

Step 2. Establishing a limited liability company (s.r.o.) in the Czech Republic

  • Translating documents, including the power of attorney and certificate of criminal records in Czech
  • Conducting a legally binding notarial deed to finalize the company's official registration process
  • Ensuring all crucial company data is accurately and promptly recorded in the esteemed commercial register
Duration: 4 weeks

Step 3. Undertaking pre-application endeavors (some in parallel with Step 2)

  • Preparation Anti-Money Laundering/Know Your Customer (AML/KYC) policies to harmonize with the unique cryptocurrency operations of the client company
  • Enlisting a highly qualified AML officer and providing them with comprehensive training, honing their expertise to align with the company's specific requirements. Furnishing the officer with extensive guidance on regulatory reporting and the intricacies of the autorization process
  • Initiating the filing and the autorization procedure with the esteemed FAU, the financial analysis unit of the Czech Republic
Duration: 3 weeks.

Please note that all the communication and reporting for FAU is processed in Czech language, it is important to have a local person as the MLRO.

Step 4. Opening B2B & C2B corporate accounts

  • Complete set of notarized corporate documents (Register Card, AoA, MoA) for account opening
  • Preliminary negotiations with the payment institution and support of the client throughout the account opening process
Duration: 6-8 weeks

Understanding the Czech's Requirements

The Czech government established a summary `Security of internet payments and cryptocurrency` at the beginning of 2015, setting new requirements for the service providers operating in this nation.

In the absence of limits imposed by Czech law, virtual currencies are subject to EU laws based on this document, which means no new national laws will be implemented.

The Czech Republic provides 4 variants of crypto licenses:

  • The Classic
  • Fiat
  • Traditional
  • Specialized

Cryptocurrency applicants in the Czech Republic can be regulated with national law or EU laws

Requirements for autorization

Need to prepare a business plan, a description of the software and hardware, one director and at least 2 managers, and adherence to AML/KYC regulations

To get a crypto license and operate in Czech Republic as a virtual asset service provider, some compulsory requirements must be met:

  • registration as a legal entity, opening a physical office and sharing capital
  • documentation must be prepared by the requirements of the regulator as well as the acquiring bank where the account will be opened
  • provide jobs for official staff members and directors with experience and education in financial activities
  • develop a business plan and a description of the software and hardware (with translation into Czech)
  • draw up AML/KYC policies, risk control, and monitoring rules
  • submit a package of documents to the regulatory body
  • pay the state fee
  • owners and directors of the company must have an impeccable reputation and no criminal record
  • at least two managers in the company

Taxes in Czech Republic

Corporate Income Tax (CIT)

  • Rate: 19%
  • Base: taxable income of Czech companies, including business profits, capital gains (excluding those under the participation exemption), interest, and royalties.
  • Key Points:
    • Paid annually.
    • Flat rate applies to all companies.
    • Participation exemption provides tax-free treatment for qualifying dividends.

Withholding Tax (WHT)

  • Rates:
    • Residents: 15% (dividends), 0% (interest/royalties).
    • Non-residents: 15% (dividends/interest/royalties), potential for reduction/exemption under Double Taxation Agreements (DTAs).
  • Base: Czech-sourced payments made to:
    • Residents (dividends, interest, royalties).
    • Non-residents (any Czech-sourced income).
  • Key Points:
    • Withheld by the Czech payer.
    • Potentially offset against the recipient's final tax liability.
    • DTAs significantly impact applicable rates.

Capital Gains Tax (CGT)

  • Rate: 19% (same as CIT)
  • Base: gains from the sale of assets (excluding those under the participation exemption), including:
    • Shares and securities
    • Real estate
    • Intangible assets (patents, trademarks, etc.)
  • Key Points:
    • Taxed as ordinary income.
    • Participation exemption may apply.
    • Specific rules vary based on asset type and holding period.

A VASP is a common taxpayer in the Czech Republic

Client Feedbacks

"Manimama created all necessary documents for the banking account opening for my Czech VASP in UK. I could not beleive that mission was possible. But we did it".

"Manimama helped to get a license in the Czech Republic to start cryptocurrency operations. Fast, cool, with account opening. Cool service, comfortable team, ready for anything for the sake of the client."

"If you seek a law firm that combines deep knowledge with a dynamic approach, Manimama OU stands out as a prime choice".

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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.