Cryptolicense in Croatia: A Guide to Regulatory Compliance

In recent years, financial and economic realms of Croatia have flourished, marked by a steady rise propelled by burgeoning foreign investment and enhanced infrastructure. Guided by the government's commitment to reform, the business landscape has been revitalized, drawing in global investments and fostering economic expansion.

There is no specific crypto legislation in Croatia. However, virtual currency service providers (VASPs) are subject to the Anti-Money Laundering and Terrorist Financing Act (Official Gazette No 108/17) (AMLTF Act).

The main body regulating the activities of VASPs is the Croatian Financial Services Supervisory Agency (Hrvatska agencija za nadzor financijskih usluga; HANFA).

There is no specific crypto legislation in Croatia

Key Numbers about Cryptolicense in Croatia

up to 2 months

average term of obtaining license

18%

corporate income tax (CIT) rate

HRK 20,000

minimal contribution for share capital

up to 35.4%

personal income tax (PIT) rate

minimum of 1

shareholder in the company

10%

capital gains tax (CGT) rate

Legal Opinion about Cryptolicense in Croatia

Ganna Voievodina

Manimama, CEO

"Operating with a legitimate crypto license in Croatia enhances market access and facilitates partnerships with financial institutions, fostering growth opportunities. As a law firm specializing in regulatory compliance, our expertise can streamline the licensing process, ensuring seamless navigation of legal complexities while positioning your crypto company for success in Croatia's burgeoning market".

Types of Activities with a License

Сustody and management of virtual assets on behalf of third parties: this is the custody or control on behalf of third parties of virtual assets or the means of access to such virtual assets, if necessary in the form of private cryptographic keys.

Management of a platform for trading virtual assets: the management of one or more multi-party systems that aggregates or facilitates the aggregation of multiple third party interests to buy and sell virtual assets, within the system and in accordance with its non-discretionary rules, in a manner that leads to the entering into a contract in relation to virtual assets, either by exchanging one virtual asset for another or by exchanging virtual assets for a fiduciary currency that is legal tender.

Exchange of virtual assets for fiduciary currency: entering into a contract for the purchase and sale of virtual assets with third parties for fiduciary currency that is legal tender, using own capital.

Exchange of virtual assets for other virtual assets: entering into a contract of sale and purchase of virtual assets with third parties in exchange for other virtual assets using own capital.

Execution of an order for virtual assets on behalf of third parties: the conclusion of a contract for the sale of one or more virtual assets or for the registration of one or more virtual assets on behalf of third parties, and includes the conclusion of a contract for the sale of virtual assets at the time of its issuance.

Virtual asset offer or sale services: this is the placement of newly issued virtual assets, or virtual assets that have already been issued but not listed for trading on a virtual asset trading platform, to specific customers and does not include a public offer or offering to existing virtual property owners of the issuer.

Receiving and transmitting orders for virtual assets on behalf of third parties: receiving an order from a person to buy or sell one or more virtual assets or to register one or more virtual assets and transmitting that order to a third party for execution.

Consulting on virtual assets: offering, giving or agreeing to give personalized advice to a third person either at the request of a third person or at the initiative of a virtual asset service provider who advises in connection with one or more transactions related to virtual assets or the use of virtual asset services.

Choose the Package of Services

Advanced

Set up of company ready to start cryptocurrency operational activity

€10,000

  • Company Formation in Croatia
  • VASP autorization
  • Address of Registration for 1 year
  • Individual AML/KYC Policy
  • Communication with HANFA
Order now

Basic

Creating the company and VASP authorization

€6,000

  • Company Formation in Croatia
  • VASP autorization
  • Standard AML/KYC Policy
  • Order now

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Step by Step Description

Step 1. Initial Setup

  • Initiating a preliminary project assessment
  • Preparation and filing of the package of documents
Duration: 1-2 weeks

Step 2. Company Registration

  • Selection of a company name (it is selected at the window of the HITRO.HR entrepreneurial service at one of the branches of the Croatian Financial Agency)
  • Certification of required documents (all documentation in a foreign language shall be translated by a sworn translator)
  • Registration in the Court Register
  • Publication of company registration
  • Business activity classification
  • Opening a bank account and depositing a minimum of HRK 20,000 (~ €1,700) of the share capital (the deposit certificate shall be submitted upon registration of the company)
  • Pension insurance registration (HZMO)
  • Health insurance registration (HZZO)
  • Registration with the Tax Administration
  • Decision of the Competent Administrative Body
Duration: up to 1 month

Step 3. Registration as a VASP

  • Preparation of all necessary documents (AML policies, etc.)
  • Applicants intending to carry out activities related to virtual assets are obliged to undergo the registration process and be entered into the Register of virtual asset service providers (Register of VASPs) maintained by the HANFA
  • Application review
Duration: up to 2 months

Understanding Croatian Requirements

No one except legal entities and crafts registered in the Register of VASPs may carry out activities related to virtual assets in Croatia

VASPs are legal persons or crafts that perform one or more of the following activities related to virtual assets on a professional basis on behalf of, or at the request of, another person or entity:

  • custody and management of virtual assets
  • managing a trading platform for virtual assets
  • exchanging virtual assets for fiduciary currency that is legal tender
  • exchange of virtual assets for other virtual assets
  • execution of orders for virtual assets
  • offer or sale services for virtual assets
  • receiving and transmitting orders for virtual assets on behalf of third parties
  • consulting on virtual assets

No one except legal entities and crafts registered in the Register of VASPs may carry out activities related to virtual assets in Croatia. As an exception, the mentioned above activities may be carried out by a legal or natural person authorized by the competent supervisory authority of the country of origin or being registered in the register of the competent supervisory authority in the Member State of origin, whereby it is obliged to notify the HANFA before starting activities in Croatia and submit with the notification at least the following documentation:

  • information on the activities related to virtual assets, which it is authorized to provide
  • information on the date after which it intends to start the implementation of the activity
  • information about the country of residence
  • name and contact details of the competent supervisory authority
  • certificate of approval of the competent supervisory authority or extract from the register of the competent supervisory authority of the country of origin

The management of a legal entity or a craft registered in the Register of VASPs is obliged to manage the activities of this legal entity or trade from the territory of Croatia. An activity is considered to be carried out in Croatia if any of the following criteria are met:

  • the service provider has a commercial establishment in Croatia through which it carries out commercial activities related to virtual assets or through which it advertises its services to natural persons having residence/domicile in Croatia or legal entities having headquarters in Croatia
  • the service provider offers virtual assets in Croatia through one or more automated systems
  • the service provider, regardless of the mass media, sends marketing information to natural persons with residence/usual residence in Croatia or legal entities headquartered in Croatia
  • the service provider has organized the distribution of products and/or services through one or more distribution channels intended for natural persons with residence/usual residence in Croatia or legal entities with headquarters in Croatia
  • the service provider has a postal address or telephone number in Croatia or has the domain extension ".hr" on its website

Requirements for VASP registration in Croatia

To legally provide virtual asset services in Croatia it is necessary to register a local legal entity (e.g. LLC or D.O.O. in Croatian), have a registered address in Croatia and submit the application to HANFA with necessary documents

To legally provide virtual asset services in Croatia it is necessary to:

  • Register a local legal entity (e.g. LLC or D.O.O. in Croatian: minimum statutory capital HRK 20,000 (~€1700); at least 1 director/ 1 shareholder)
  • Have a registered address in Croatia (the address can be a virtual address, but it must be a physical mailing address)
  • Submit the application to HANFA which must contain information about the company, its beneficiaries, shareholders and directors, the directors must prove that they have the necessary knowledge and experience in the cryptosphere, there must be information about the employee who will fulfil the role of AML officer
  • The application needs to be accompanied by such documents as AML documentation, criminal record clearance certificate for beneficiaries, shareholders and directors, a business plan (if necessary)

Taxes in Croatia

CIT is usually levied at a rate of 18%, but a 10% rate applies to taxpayers whose income for the tax period does not exceed €1 million

Corporate Income Tax (CIT): usually levied at a rate of 18%. A 10% rate applies to taxpayers whose income for the tax period does not exceed €1 million.

Value Added Tax (VAT): Croatia-based companies with an estimated annual turnover of more than €40,000 must register for VAT and begin collecting and remitting VAT on taxable supplies.

The VAT rates are the following:
  • standard rate is 25%
  • reduced rates of 13% (covers some food, hotel accommodation, cafes, restaurants, concert tickets, non-daily newspapers, periodicals, water supply (excluding bottled water) and electricity, etc.), 5% (this includes certain foods (bread and dairy products), books (including electronic books), medicines (with a doctor's prescription), some medical equipment, etc.) and 0% (applies to intra-community and international passenger transportation (not including rail and road)

Personal Income Tax (PIT):

  • 15% - 23.6% on monthly amounts up to €4,200 (€50,400 per year)
  • 25% - 35.4% for monthly amount above € 4,200 (€ 50,400 per year)

If the local government representative body has not adopted a decision on the level of tax rates, a rate of 20% is applicable for the tax base below € 50,400 per year and 30% for the amount exceeding € 50,400 per year.

Capital gain Tax (CGT): capital gains of the corporate sector are subject to the standard corporate income tax rate, and the standard CGT rate for individuals is 10% and is levied on capital gains, including interest and dividends.

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