Cryptolicense in Slovakia: Fast and Secure

DISCLAIMER: The term "cryptolicense" in this text refers to the authorization of a virtual asset service provider (VASP). The use of the term "cryptolicense" is intended solely to simplify the perception of the text by customers and visitors to the website.

Obtaining a crypto license in Slovakia opens doors to the expansive European Union market. Here, companies can tap into the region's economic stability and vast consumer base, propelling their growth and market reach to new heights.

The Act No. 297/2008 (Prevention of legalization of profits derived from criminal activities and prevention of terrorism financing) states that companies planning to offer cryptocurrencies services are classified as a Virtual currency wallet service provider or a Virtual currency exchange service provider. The reguatory body is the Slovak Financial Intelligence Agency (Finančná spravodajská jednotka; FSJ) and the registration authority is the Trade Licensing Office (Živnostenský Úrad; ŽÚ).

Slovakia is a pioneer in recognizing VASPs and has made the registration process variable

Key Numbers about Cryptolicense in Slovakia

5 weeks

term of obtaining cryptolicense

up to 21%

corporate income tax (CIT) rate

€5,000

minimal contribution for share capital

up to 25%

personal income tax (PIT) rate

€15

state fee for application

20%

value added tax (VAT) rate

Legal Opinion about Cryptolicense in Slovakia

Ganna Voievodina

Manimama, CEO

“Obtaining a cryptolicense in Slovakia provides companies with a clear and structured path to comply with the country's regulatory framework. In addition, the process of obtaining a cryptolicense is quite streamlined, which reduces bureaucratic hurdles and makes it easier to enter the market. This clarity of the regulatory framework and simplified process increases Slovakia's attractiveness as a jurisdiction for companies wishing to operate in the cryptocurrency space, providing them with confidence in their legal position and smooth operations. We will be glad to assist you in obtaining this license.”

Types of Activities with a License in Slovakia

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

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.

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.

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.

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.

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

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.

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

Benefits of Obtaining a Cryptolicense in Slovakia

Stable legal system:
  • Slovakia has a good legal framework to regulate cryptocurrencies, which provides predictability for businesses.
  • Compliance with EU standards increases trust from international investors and customers.
  • Developed infrastructure:
  • Slovakia is investing in the development of blockchain technology and digital infrastructure.
  • Availability of reliable financial services and banking support for cryptocurrency companies.
  • Tax advantages:
  • Slovakia offers favorable tax conditions for cryptocurrency companies.
  • The concluded double taxation agreements help to reduce the tax burden for international companies.
  • Transparent and secure regulatory environment:
  • Stringent security requirements ensure that the interests of investors and users are protected.
  • An open and transparent regulatory policy promotes trust in companies operating in the cryptocurrency sector.
  • Choose the Package of Services

    Advanced

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

    €10,000

    • Company formation in Slovakia
    • Obtaining a cryptolicense
    • Address of Registration for 1 year
    • Individual AML/KYC policies
    • Communication with FSJ
    Order now

    Basic

    Obtaining a cryptolicense under the minimum regulatory requirements

    €6,000

    • Company formation in Slovakia
    • Obtaining a cryptolicense
    • Standard AML/KYC policies
    Order now

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    Step by Step Description

    Step 1. Initial Setup

    • Initiating a preliminary project assessment
    • Gathering necessary documents (copies of identity cards (or passports) of shareholders, directors and their certificates of criminal record; a proof of permanent residence for shareholders and directors (utility bills); a detailed business plan; articles of association; a registration act (for a single shareholder) or a memorandum of association (for several shareholders)) with apostille and legally certified translation into Slovak
    • Preparing the Power of Attorney with apostille (if the registration is performed by a third party) and translation into Slovak
    Duration: 1-2 weeks

    Step 2. Company Registration

    • Verification of the availability and reserve of the selected company name in the Commercial Register
    • Incorporating the company's data into the Commercial Register
    Duration: 4 weeks

    Step 3. Obtaining a cryptolicense

    • Preparation of AML/KYC policies to align with the client company's cryptocurrency activities
    • Recruitment and education of a local Director / AML Officer for the company
    • Submit an application to the Trade Licensing Office which must include the necessary documents (AML documentation, information about AML officer (it can be a person who has permanent residence), proof of company registration (statutory documents), proof of local registered address, a detailed business plan, etc.) which must be in Slovak
    Duration: 4-6 weeks

    Step 4. Opening B2B & C2B corporate accounts

    • Initial evaluation and identification of a suitable Financial Institution for corporate account setup
    • Preparation of notarized corporate documents required for the account opening process
    • Early discussions with the payment institution and continuous assistance to the client during the account opening procedure
    Duration: 2-3 weeks

    Understanding Slovak Requirements

    There are two types of cryptolicenses in Slovakia

    In Slovakia, it is possible to obtain a cryptolicense depending on the type of business activity:

  • Virtual currency wallet service provider - a person that provides services for the protection of private cryptographic keys on behalf of its clients, for the holding, storage and transfer of virtual currency
  • Virtual currency exchange service provider - a person who, in the course of its business, offers or conducts virtual currency transactions involving the purchase of virtual currency for euro or foreign currency or the sale of virtual currency for euro or foreign currency
  • Requirements for VASP registration in Slovakia

    To obtain a cryptolicense is required a director who must be Slovak or a person with permanent residence in the EEA

    To obtain a cryptolicense and operate in Slovakia, some compulsory requirements must be met:

    • establishing a local company (Limited Liability Company with a minimum share capital of €5,000)
    • unique company name (three versions)
    • having a local registered address (can be physical or virtual)
    • from 1 to 50 shareholders
    • a director must be Slovak or a person who has permanent residence in the EEA
    • a detailed business plan
    • shareholders and directors should have an impeccable reputation and confirm it with an appropriate certificate

    Taxes in Slovakia

    Сorporate Income Tax rate is 21% or 15% depending on income

    Corporate Income Tax (CIT)

    • Headline Rate: 21% (standard flat rate)
    • Reduced Rate: 15% may be available for small companies whose taxable income does not exceed €60,000 annually
    • Taxable Base: CIT is calculated on a company's worldwide taxable profits, including income from business activities, capital gains, and other sources. Certain deductions and exemptions apply

    Filing Dates:

    • CIT Return: generally, within three months following the end of the tax period (usually the calendar year). Extensions are available under certain conditions
    • CIT Payments: advance CIT payments are required monthly or quarterly during the tax period. Final payment is usually due within the CIT return filing timeframe

    Withholding Tax (WHT)

    WHT is a tax levied on certain payments made to non-residents. The rates depend on the type of income and any applicable double tax treaties
    • Dividends
      • To resident companies:10% from the profits made after 1 January 2024.
      • To non-resident companies: up to 35%. The rate can vary based on tax treaties and the recipient's tax residence
    • Interest
      • To resident companies: generally 0% or 19%
      • To non-resident companies: 19% or 35%. Tax treaties may offer reduced rates
    • Royalties
      • To resident companies: 0%
      • To non-resident companies: 19% or 35%. Tax treaties may offer reduced rates

    Capital Gains Tax (CGT)

    • Rate: capital gains are generally included in the standard CIT base and taxed at the normal corporate income tax rate (21% or potentially 15% for smaller companies)
    • Taxable Base: CGT applies to gains from the sale or disposal of assets, including shares, real estate, and other capital assets
    • Losses: capital losses can be offset against capital gains. Unused losses may be carried forward subject to certain conditions

    Important Considerations

    • Double Tax Treaties: Slovakia has an extensive network of double tax treaties that can potentially reduce or eliminate WHT rates and avoid double taxation.
    • EU Directives: EU Directives, such as the Parent-Subsidiary Directive, may provide exemptions from WHT in specific circumstances.
    • Non-Cooperating Jurisdictions: Payments to entities in non-cooperating jurisdictions (listed by the Slovak Ministry of Finance) may be subject to a higher WHT rate of 35%.
    • Personal Income Tax (PIT): 25%; 19% if income is less than €47,537.98
    • Value Added Tax (VAT): 20%; a reduced tax rate is 10% or 5%

    Frequently Asked Questions

    • What law regulates cryptocurrency activities in Slovakia?
      The Act No. 297/2008 (Prevention of legalization of profits derived from criminal activities and prevention of terrorism financing) regulates cryptocurrency activities in Slovakia.
    • What steps do I need to take to obtain a cryptolicense in Slovakia?
      Obtaining a cryptolicense in Slovakia requires registering a company in the Trade Register, submitting an application to the Trade Licensing Office with all necessary documents.
    • What documents are required to license a cryptocompany in Slovakia?
      The required documents include AML documentation, information about the AML officer, company's statutory documents, proof of local registered office, detailed business plan, which must be in Slovak language.
    • What are the requirements for exchanges to obtain a license in Slovakia?
      Exchanges must comply with KYC/AML regulations, ensure financial stability, transparency of operations and security of customer funds.
    • What are the advantages of doing business with a cryptolicense in Slovakia?
      Benefits include access to the European market, tax benefits, trust from customers and investors, and support from the government.
    • How long does the process of obtaining a cryptolicense in Slovakia take?
      The process of obtaining a license can take from several weeks to several months depending on the completeness of the submitted documents and the speed of processing the application by the regulator.
    • What types of cryptocurrency activities are allowed in Slovakia after obtaining a license?
      Licensed companies can engage in cryptocurrency exchange, provide cryptocurrency wallet services.
    • What are the requirements for the director of a cryptocurrency company in Slovakia?
      The director must be a Slovakian or a person with permanent residence in the EEA.
    • Which jurisdictions cooperate with Slovakia in the field of cryptocurrency regulation?
      Slovakia actively cooperates with other EU countries and international organizations to develop joint standards and share experience in cryptocurrency regulation.
    • What measures are taken to ensure the security of cryptocurrency transactions in Slovakia?
      Slovakia has security requirements for transactions, including KYC/AML compliance, audits and the use of advanced data protection technologies.

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