Regulation of the cryptocurrency market is constantly becoming stricter. Nowadays jurisdictions impose high regulatory and risk management requirements on virtual asset service providers.
Despite this, we always manage to find a solution that suits the client. All the time our team provides research of the market and regulations on various markets to find the best jurisdiction. Recently we have made the global overview of the VASP regulation in EEA and ready to share information with our future and existing clients. Today we will look at the features of obtaining a cryptocurrency license in Croatia.
Tax Summary:
- Personal income tax – from 20% to 30%, additionally, there is personal income tax at the level of the city where the individual resides, and local personal income tax rates from 10% to 18%
- Corporate income tax – from 10% to 18%
What law/s governs VASP activities?
- Zakon o sprječavanju pranja novca i financiranja terorizma (“AML act“)
- Ordinance on keeping the register of virtual asset service providers (“Ordinance“)
What activities are included in VASP services?
According to the AML act, paragraph 17, article 9, chapter III, legal entities and natural persons are subject to this law if they carry out any of the following activities:
- Providing virtual and fiduciary currency exchange services.
- Providing custodial wallet services.
Who is the VASP regulator?
- The Croatian Financial Services Supervisory Agency (“Hanfa“)
What is the procedure for registering a VASP for a local company?
To legally provide virtual asset services to a local company in Croatia it is necessary to:
- Register a local legal entity (e.g. LLC, minimum statutory capital 2 650 EUR).
- Have a registered address in Croatia (the address can be a virtual address, but it must be a physical mailing address).
- Submit the application via e-mail to HANFA. The application 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, and there must be information about the employee who will fulfill the role of AML officer.
- The application needs to be accompanied by documents that are: AML documentation, and a criminal record clearance certificate for beneficiaries, shareholders, and directors. HANFA may require a business plan if necessary.
Is there any specific authorization required for a VASP from another EU member state to provide services in this jurisdiction?
According to the Ordinance, all companies that wish to provide virtual asset services in Croatia must be authorized in the HANFA register, including VASPs from other EU members. The authorization procedure is the same as for local companies (described in the previous section). A foreign VASP must have a registered office (may be virtual) in Croatia.
What is the liability for the activities of a VASP from another EU member state without local registration/authorization in this jurisdiction?
Conducting crypto business without authorization is an offense that carries a fine of 4 640 to 132 720 EUR (article 150 of the AML Act).
Manimama Legal & Growth Agency provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.
The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
