Eternity Law International News Crypto License in Germany

Crypto License in Germany

Published:
January 9, 2023

Germany isn’t only one of most trustworthy, commercially honest and strict in terms of compliance jurisdiction, but also a country that is committed to massive technological and financial development. Despite the fact that the status of a fairly conservative commercial space has been assigned to jurisdiction, this country strongly supports innovative solutions and tools, in particular, crypto-currencies and blockchain-technologies. Obtaining a crypto-license here is an opportunity to declare yourself as a reliable and honest partner for other organizations and potential clients.

Our company is ready to provide you with various services related to the establishment and licensing of crypto exchange Germany and in various other jurisdictions. We also give comprehensive professional advice and support in any commercial areas and issues, in particular, for FinTech companies, gambling structures, brokerage firms and others.

Germany and crypto: crypto-license requirements

Speaking of this jurisdiction, it should be noted the particular strictness of this jurisdiction in relation to implementation and meeting certain regulatory rules put forward at the local legislative level. Companies that do not comply with the standards and norms accepted in the jurisdiction cannot obtain a crypto license and, accordingly, conduct their business-activities. According to local regulation, main normative points for commercial crypto-projects are as follows.

  1. Obtaining crypto license in Germany can only be available to a resident of the country. Thus, the actual presence within jurisdiction of organization is mandatory and inalienable.
  2. Firms intending to conduct crypto-activities and being connected with blockchain within the jurisdiction are needed to demonstrate evidence of starting capital of 125,000 euros.
  3. The entrepreneur provides evidence of the reliability of shareholders and their stability in a given market niche.
  4. The firm also needs documentary evidence that the persons hired for managerial positions are reliable and professionally competent.
  5. A detailed business-plan containing a description of business-prospects, possible extensions of commercial horizons and financial progress.
  6. Correct plans for creation of balance-sheets and reports containing data on profit and loss received during 3 functional years.
  7. Written review of firm’s structure, internal controls and performance monitoring mechanisms in place.
  8. Providing well-formed IT strategies for progressing of crypto-business and IT-security systems, which is mandatory to ensure proper protection of clients’ assets and data.

Types of cryptocurrency licenses in Germany

According to the  crypto regulations in Germany, category of the corresponding license permission is classified depending on what range of services the firm intends to provide and in what direction to run its business-activities. So, as jurisdiction’s regulation determines it, there are the following categories.

  1. Exchange of crypto-assets among themselves.
  2. Operations for the exchange of fiat, that is, real, money for a crypt.
  3. Trading and mining crypto-currencies.
  4. The performance by the company of deals and operations in which it acts as an intermediary broker and acts within the framework of a mutually concluded agreement between the parties.
  5. Making investments using crypto-assets for clients, acting on their official behalf and maintaining security of their means.

Our company will help you decide on direction of crypto-activities if you are still in doubt and cannot find your path. We are competent specialists in the field of IT-law, gambling, Fintech technologies, brokerage services and many other rapidly developing commercial niches that are in demand on the global market.

Advantages of cryptocurrency licenses in Germany

This jurisdiction compares favorably with next-mentioned privileges and enticing prospects that it offers to capital holders who decide to invest in the crypto environment and get cryptocurrency exchange license Germany.

  1. Despite all the strictness and steadfastness of the regulator and jurisdiction in general regarding the strict implementation of regulatory requirements, German jurisdiction is quite loyal in terms of taxation and all kinds of support provided towards crypto-startups.
  2. Crypto-coins in the jurisdiction can be used legitimately and make transactions with them within the legal framework, which has not yet been defined and is prohibited in some European countries.
  3. Stability and reliability of jurisdiction on a global level, which contributes to the establishment of strong and trusting connections between business-partners and clients.
  4. Germany’s unrivaled reputation as a hyper “responsible” and profitable space among global corporations, in particular those active in cryptocurrencies.
  5. The lack of prerequisites for slowing down the efforts of the banking sector to spin up new money and provide its clients with crypto-opportunities.

Procedure for obtaining a German crypto-license 

Procedure for obtaining legal cryptocurrency license in Germany is quite simple and intuitive, and most importantly, transparent and honest in terms of the relationship of the regulator to the licensee.

  1. The stage of preparation for firm’s establishment; it consists in holding a meeting of all company members and forming statutory documentation.
  2. Next step to get a crypto-project is pre-registration. This step involves and includes notarization of documentation, necessity to open an account for a crypto-company, and submitting a correctly drafted application for establishment of a commercial structure. Documents include personal data of founders and heads, confirmation of their expertise and professional background, as well as the absence of a criminal record. In addition, the company needs to provide Statute, business-plan, proof of capital presence and developed AML policies.
  3. Establishing a company and applying for a procedure to get crypto blockchain license in Germany.

Our specialists will accompany you at every stage of this process and will take care of all the nuances and difficulties, in particular, the preparation of the necessary documentation. We’ll greatly help you to open accounts for commercial and cooperative purposes.

Taxation of crypto companies in Germany

In this jurisdiction, deals with crypto-currencies are exempt from VAT and are not subject to capital gains tax. Owners of crypto assets must keep them for 12 months in order to be fully tax-exempt. If cryptocurrencies are sold, staying with their owners for up to a year, then the profit from their sale will be subject to a progressive income tax of 45%.

If exchanges that buy or sell cryptocurrencies under their own name act as and have the official status of an intermediary, then they will be exempt from paying tax. However, exchanges that operate on the technical market will not get any privileges and benefits.

How much does a crypto-license in Germany cost?

Cost of procedure to open a cryptocurrency company in Germany is calculated purely individually for each commercial project. This is due to the fact that the total price is a derivative of many factors, in particular, the range of services of the company, its initial budget, and others.

Our specialists have sufficient knowledge and experience not only to accurately calculate the cost for you, but also to optimize your costs as much as possible. We work for your comfort and commercial efficiency.

What is a cryptocurrency exchange in Germany?

A cryptocurrency exchange is a separate platform officially controlled by a local regulatory authority. On such platforms, individual users and entrepreneurs can exchange cryptocurrencies for fiat and among themselves. Crypto exchanges can operate legally and unrestrictedly only if they have the appropriate cryptocurrency exchange license Germany.

Is cryptocurrency regulated in Germany?

The activities of crypto companies are controlled and regulated by the supervisory authority BaFin. The regulator is responsible for issuing crypto blockchain license in Germany for firms that want to work with crypto assets. Crypto investors must bring their business into compliance with the requirements and rules set out in the European directives on the prevention of terrorism and funds from illicit sources.

Which bank in Germany supports cryptocurrency?

Crypto-friendly banking institutions popular among crypto investors are Deutsche Kreditbank (DKB) and Fidor Bank AG. Firms that wish to operate as a crypto service provider in this jurisdiction are required to have the appropriate cryptocurrency license in Germany.

How is Germany using blockchain?

Cryptocurrencies in Germany are used to make payments for commercial and personal purposes. They can also be exchanged among themselves and for fiat. Activities in which the company appears as a provider of crypto services are permitted only with the appropriate crypto license in Germany.

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