Spanish Cryptocurrency Regulation: A Comprehensive Guide

Basic price of incorporation the company with VASP authorization in Spain starts from €15,000

Cryptocurrency regulation in Spain

Spain presents an inviting landscape for Virtual Asset Service Providers (VASPs). In Spain, 6.8% of the population currently owns cryptocurrencies. Spain leads among European countries in the number of cryptocurrency ATMs, with 231 such machines, ranking fourth globally. In this context, the introduction of VASPs in Spain holds substantial promise and potential.

Spain is one of the European leaders, ranking fourth globally

Step by step description

Step 1 – Gathering documents from the client to start the process:

  • preliminary project analysis;
  • KYC collection and business description;
  • Corporate name;
  • Full personal details of the shareholders and the directors;
  • Corporate purpose;
  • Power of Attorney (Powers to appear before a Spanish Public Notary to grant the incorporation public deed & Powers to appear before any Spanish authority to perform and sign whatever acts, contracts or documents which may be necessary for or connected with the incorporation);
  • Bank wire (The amount of the initial share capital to be allocated to the company must be wired to an account opened in the name of the company at a bank in Spain);
  • The share capital (LLC, SL - €3,000, public LLC, SA - €60,000).
Duration: 10 days

Step 2 – Registration of a limited liability company (Sociedad Limitada or S.L.) in Spain (upon documents receipt on hands):

  • Opening a preliminary banking account for contribution of the shared capital and supporting of the process of deposit;
  • Preparation of corporate address;
  • Obtaining Spanish Tax Identification Number, NIF / Spanish Foreign Tax Identification Number, NIE for non-resident individuals who will be shareholders and/or appointed directors;
  • Carrying out the notarial deed of company registration;
  • Registration in Mercantile Registry.
Duration: up to 6 months. The Bank of Spain should answer in a maximum term of 3 months from the request. However, in practice, the complete processing of the license takes approximately 6 months.

Step 3 – Pre-application work:

  • Obtaining Company’s Spanish Tax Identification Number (NIF);
  • Registration in the Spanish Social Security, Seguridad Social, if the company will act as an employing entity and hire employees in Spain;
  • Development of AML/KYC policies tailored to the client company's cryptocurrency operations;
  • Hiring and training a local Director for the company and adapting their skills to the company's operations;
  • Submitting the application and registration as a virtual asset service provider (VASP) with the Bank of Spain.
Duration: 4-6 months

Step 4 – Opening B2B & C2B corporate accounts for VASP (Additional):

  • conducting preliminary assessment and match for suitable Financial Institution for further corporate account opening;
  • preliminary negotiations with the payment institution and support of the client throughout the account opening process.
Duration: 4-8 weeks

Understanding the Spanish Requirements

Cryptocurrency business in Spain is regulated as part of the implementation of measures to prevent and detect acts of money laundering derived from or in connection with criminal activities. Currently, cryptocurrency business can operate without a license, but it is necessary to register in a special crypto register maintained by the Bank of Spain.

Crypto license is not required, you need only to register in a special crypto register

A VASP license in Spain requires a minimum share capital (€1), 1 director, adherence to AML/KYC regulations and registration in a special crypto register

Requirements for VASP registration

To incorporate a company the following documents are required:

  • Form for registration in the register of Currency Exchange Service Providers;
  • Form for registration as a Custodian Service Provider;
  • Suitability assessment form for the applicant legal entity and, in addition, a suitability assessment form for each of the natural persons effectively managing the entity, signed by each of them;
  • Criminal record certificate with an issue date no earlier than 3 months prior to the date of submission (the certificate is required for the applicant legal entity and for each of the natural persons effectively managing the entity);
  • Copy of the national identity card/NIE/NIF/foreign identification document of the legal person applying for registration, and in addition, of all natural persons effectively managing the entity, where such provider is a legal person;
  • Manual on the prevention of money laundering and terrorist financing;
  • Risk analysis document;
  • Detailed Business Model description;
  • IT Systems and Internal control mechanisms to comply with the legal or regulatory provisions aimed at preventing money laundering and the financing of terrorism.

Taxes in Spain

Virtual currency exchange services are not subject to VAT, in addition, services invoiced (e.g. sales invoices) in virtual currencies are subject to regular VAT rules.

Corporate tax from 19% up to 26% depending in the income amount.

Withholding tax (for non-residents): 19% for dividends, 19% for interests, and 19 or 24% for royalties.

Capital gains taxes: corporate – 25%, individual (for non-residents) – 19%.

Virtual currency exchange services are not subject to VAT, but some kind of taxes are

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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.