How to obtain a cryptocurrency license in Austria

Tax Summary:

1. Personal income tax – from 0 % to 55%
2. Corporate income tax – 24%

What law/s governs VASP activities?

1. Financial Markets Anti-Money Laundering Act (AML law)
2. FMA Circular on Reporting Obligations for the prevention of Money Laundering and Terrorist Financing 
3. FMA Circular on Due Diligence Obligations for the Prevention of Money Laundering and Terrorist Financing 
4. FMA supervision in the area of service providers in relation to virtual currencies 

What activities are included in VASP services?

VASPs are defined in Article 2 no. 22 of AML law as all providers (i.e. both natural persons and legal entities) that offer one or more of the following services:

• Services to safeguard private cryptographic keys, to hold, store and transfer virtual currencies on behalf of a customer (custodian wallet providers).
• Exchanging of virtual currencies into fiat currencies and vice versa.
• Exchanging or one or more virtual currencies between one another.
• Transferring of virtual currencies.
• The provision of financial services for the issuance and selling of virtual currencies (e.g. in connection with an “Initial Coin Offering” or an “Initial Token Offering”, etc.).

The definition of “VASPs” also covers VASPs domiciled in another EU Member State or in a third country that actively offers or provides a service pursuant to Article 2 no. 22 of the AML law in Austria.

Who is the VASP regulator?

1. Financial Market Authority (“FMA”)

What is the procedure for registering a VASP for a local company?

First of all, the local company must be registered in the Commercial Register.

Hereinafter, VASPs that intend to provide their service in connection with virtual currencies on a commercial basis domestically (i.e. with place of residence/incorporation in Austria), or offer the service from Austria, are required to apply for a registration from the FMA beforehand.

The registration application is to be submitted to the FMA electronically (where several files are submitted max. 40 MB/file) to the e-mail address reg.virtuellewaehrungen@fma.gv.at.

Depending on whether the applicant is a natural or legal person, the application must contain the documents and information, which are listed in  Art. 32a para. 1 of AML law:

1. The name or company name of the provider and where available of its director(s).
2. The place of incorporation of the undertaking and the appropriate business address for deliveries.
3. A description of the business model, from which it is possible to determine the nature of the intended services.
4. A description of the internal control system that the applicant intends to introduce, as well as a description of the planned policies and procedures in order to fulfill the requirements of this federal act and Regulation (EU) 2015/847.
5. In the case of legal entities, in addition, the identity and the amount of participations of the owners, who hold a qualifying holding pursuant to point 36 of Article 4 (1) of Regulation (EU) No. 575/2013 either directly or indirectly in the applicant.

You can also find a more detailed list in paragraphs 370-371 of this FMA Circular or on the FMA website. 

In registering the VASP there is no approval of the processes, procedures and systems for the prevention of ML and TF submitted as part of the registration procedure.

When the provider is registered, an entry is made in the FMA Company Database. 

Is there any specific authorization required for a VASP from another EU member state to provide services in this jurisdiction?

Natural and legal persons that actively offer or provide one or more of the services listed in Article 2 no. 22 of AML laws that are domiciled or headquartered in a foreign country are also required to register.

Where the VASP that is established in a foreign country provides a service pursuant to Article 2 no. 22 of AML law in Austria, then for example the following criteria are to be taken into account for the respective case in hand as part of the overview:

1. Information about or being active through an Austrian point of contact/agent.
2. Utilization of an Austrian distribution network, in order to specifically target the Austrian market.
3. Opening of a (subsidiary) company or premises in Austria.
4. Design of the website, e.g. by supplying Austrian contact details, references to Austria as a country or connection to an Austria website by means of API interfaces etc..
5. Various marketing activities or the placing of advertisements for advertising the service or the product in Austria.
6. etc.

No possibility exists for passporting in the field of provision of services pursuant to Article 2 no. 22 of AML law.

Foreign documents (e.g. excerpts from registers, memorandum of association etc.) must be submitted as certified translations (in German or English).

What is the liability for the activities of a VASP from another EU member state without local registration/authorization in this jurisdiction?

Anyone who provides services in relation to virtual currencies pursuant to Article 2 no. 22 without the necessary registration pursuant to Article 32a para. 1, commits an administrative offense and shall be punished by the FMA with a fine of up to EUR 200 000 (Article 34 para. 4 FM-GwG).

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.