Cryptolicense in Finland: Gateway to Legitimate Crypto Operations

Finland can be characterized as a jurisdiction with a simplified process of obtaining the status of a Virtual Currency Provider (VCP), where regulatory clarity and innovation promote the growth of the digital economy.

The Act on Virtual Currency Providers (572/2019) (VCPA) states that VCP means a virtual currency issuer, a virtual currency exchange service and its marketplace and a wallet service provider.

The Finnish Financial Supervisory Authority (FIN-FSA) is the authority for supervision of the virtual currency sector in Finland.

Virtual Currency Provider (VCP) means a virtual currency issuer, a virtual currency exchange service and its marketplace and a wallet service provider

Key Numbers about Cryptolicense in Finland

3 months

average term of obtaining license

20%

corporate income tax (CIT) rate

no

minimal contribution for share capital

up to 44%

personal income tax (PIT) rate

minimum of 1

shareholder in the company

30/34%

capital gains tax (CGT) rate

Legal Opinion about Cryptolicense in Finland

Ganna Voievodina

Manimama, CEO

"As a lawyer, I believe cryptolicense in Finland fosters innovation in the financial sector, promoting economic growth and positioning Finland as a forward-thinking hub for blockchain technology and digital assets. Contact our experts to know more about this cryptolicense".

Types of Activities with a License

The issuance of a virtual currency: when a natural or legal person issues a virtual currency.

The provision of a wallet service: when a natural or legal person holds virtual currency for the account of some other party or provides for the transfer or storage of virtual currency.

The exchange of a virtual currency: a virtual currency exchange service, practised by a natural or legal person as a business or professional activity, is:

  • the exchange of a virtual currency into legal tender or another virtual currency as a service;
  • the exchange of a virtual currency into another commodity or the exchange of another commodity into a virtual currency as a service; and
  • the operation of a marketplace where a provider’s customers may engage in the activities referred to in points above.

Choose the Package of Services

Advanced

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

€20,000

  • Company Formation in Finland
  • VASP autorization
  • Address of Registration for 1 year
  • Individual AML/KYC Policy
  • Handling the communication with FIN-FSA
  • Corporate account
  • Order now

    Basic

    VCP authorization under the minimum regulatory requirements

    €15,000

  • Company Formation in Finland
  • 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

    • Choosing the company type (the most popular one is Limited Liability Company, in Finnish - Osakeyhtiö)
    • Choosing and reserving a company name with the Finnish Trade Register (FTR) at Finnish Patent and Registration Office
    • Preparation of the company’s founding documents
    • Opening a bank account for the company (it is activated when the company is registered in the FTR)
    • Registration of the company with the FTR
    • Payment of the registration fee
    Duration: 2 months

    Step 3. Registration as a VCP

    • Documentation preparation
    • Registration is applied for from the FIN-FSA by means of a registration application in writing (electronically or in paper form)
    • The registration application and attachments must be submitted either in Finnish or Swedish (other language must be agreed with the FIN-FSA in advance)
    • Upon receipt of the registration application, the FIN-FSA will assess whether the service provider fulfils the requirements prescribed by law and will decide on the matter
    Duration: 3 months

    Understanding Finnish Requirements

    According to VCPA:
    • a virtual currency issuer is a natural or legal person who issues a virtual currency
    • a virtual currency exchange service, practiced by a natural or legal person as a business or professional activity, is the exchange of a virtual currency into legal tender or another virtual currency as a service; the exchange of a virtual currency into another commodity or the exchange of another commodity into a virtual currency as a service; the operation of a marketplace where a provider’s customers may engage in the activities mentioned above
    • a wallet provider is a natural or legal person who holds virtual currency for the account of some other party or provides for the transfer or storage of virtual currency
    The FIN-FSA shall register the notifier as a VCP if:
    • the applicant is entitled to carry on business in Finland
    • the notifier is not bankrupt and, if he is a natural person, he is of full age, has no restrictions on his capacity to act and has not been appointed a guardian
    • the notifier is reliable
    The obligation to register does not apply to:
    • a trader who provides virtual currency services within a limited network
    • a trader who provides virtual currency services occasionally in connection with other professional activities that require some other authorisation, registration or prior approval
    • virtual currencies issued by central banks and other authorities

    Virtual currency service means the issuance of virtual currency, the exchange of virtual currency, and the provision of a wallet service

    Requirements for VCP registration in Finland

    The registration application together with statements attached to it must be submitted either in Finnish or Swedish

    Requirements for a VCP are following:
    • Having a company registered in Finland - Private Limited Company (PLC) which must has minimum of 1 management board member and 1 board deputy member who must be residents of the European Economic Area / 1 shareholder of any nationality
    • Detailed business plan
    • Corporate legal documents
    • Authorization to practice a trade in Finland
    • Share capital for an PLC – no requirements but it is recommended to have at least €2,500
    The registration application must include:
    • a description of the services to be provided
    • the name, identifying and location information of the person submitting the application
    • proof of the right to practice a trade, such as an extract from the Trade Register, the Register of Associations to the Register of Foundations
    • an extract from the Register of Bankruptcies and Reorganisations, issued by the Legal Register Centre (LRC)
    • if the person submitting the application is a natural person, an extract from the Guardianship Register
    • an extract from the Business Prohibition Register issued by the LRC
    • the applicant’s report on fitness and propriety, and if the person submitting the application is a legal person, a report of the fitness and propriety of the company’s management
    • a statement on the holding and protection of client money (including e.g. risk assessment)
    • information on the marketing of services to be provided to customers (such as terms and conditions of agreement)
    • information on customer identification and customer due diligence procedures, risk management systems and the prevention of money laundering and terrorism financing, including e.g. a risk assessment of money laundering and terrorist financing, operating guidelines regarding customer due diligence procedures and obtaining customer information, ongoing monitoring and the obligation to obtain information as well as compliance with the reporting obligation, a description of how responsibilities have been assigned in the applicant’s organization for duties relating to preventing money laundering and terrorist financing, a description of the training and protection of employees

    The FIN-FSA will obtain extracts required for registration from the Register of Crimes and Sanctions as well as Compliance Reports.

    The registration application together with statements attached to it must be submitted either in Finnish or Swedish. Submission of documents written in another language must be agreed with FIN-FSA in advance.

    Taxes in Finland

      Corporate Income Tax (CIT)

      In Finland, the corporate tax rate is currently 20%. This rate applies to both resident and non-resident companies on their taxable income earned in Finland. However, it's important to note that there are certain deductions and incentives available that can affect the effective tax rate a company pays.

      For instance, Finland has a participation exemption system, which means that dividends received from subsidiaries are often tax-exempt if certain conditions are met. Additionally, there are provisions for deducting interest expenses and other costs related to business operations.

      It's also worth mentioning that Finland has signed double tax treaties with numerous countries to prevent double taxation on income earned abroad. These treaties typically address issues related to cross-border taxation and provide guidelines for determining which country has the primary right to tax specific types of income.

      Capital Gains Tax (CGT)

      In Finland, capital gains tax (CGT) is applicable to individuals and entities on profits generated from the sale of assets such as real estate, stocks, bonds, and other investments. The capital gains tax rate for individuals in Finland is 30% for gains realized from the sale of most assets. However, there are some exceptions, such as gains from the sale of shares listed on a regulated market, which may be taxed at a reduced rate of 20%. Certain assets are exempt from capital gains tax, such as gains from the sale of a primary home if specific conditions are met, or if the seller is over a certain age and the property has been their primary residence for a certain period.

      Personal Income Tax (PIT)

      Personal income tax in Finland is progressive, meaning that the tax rate increases as income rises. The personal income tax rates for Finland for 2024 are as follows: income up to €17,300: 0%, income between €17,301 and €31,900: 6.25%, income between €31,901 and €72,300: 17.25% income over €72,300: 31.25%. These rates apply to earned income, which includes salaries, wages, and other employment-related income. Additionally, there are various deductions and allowances available to taxpayers to reduce their taxable income, such as deductions for certain expenses and allowances for dependents. It's important to note that these tax rates and thresholds may be subject to change over time due to legislative updates or changes in economic conditions. Therefore, individuals should consult with a tax professional or refer to official sources for the most current information.

    Capital Gains Tax rate is 30% or 34% depending on income

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