Eternity Law International News REGISTRATION OF A CRYPTOEXCHANGE IN THE CZECH REPUBLIC

REGISTRATION OF A CRYPTOEXCHANGE IN THE CZECH REPUBLIC

Published:
October 7, 2020

Cryptocurrency is a digital currency controlled by cryptographic methods (international electronic money created using data encryption).

Fiat is the traditional currency (dollar, euro, pounds), which has a physical shell in the form of banknotes and coins. Advantages: officially recognized currency, subject to exchange at a fixed equivalent. Disadvantages: less protected from the factors of decentralization, compared to the cryptocurrency. Has control from the states.

Earned crypto money is stored on the blockchain, an encrypted chain of algorithms, which, in turn, is divided into blocks, and stored on several computers at the same time. The principle of operation is similar to the program of downloading files, like torrent.

In recent years, the popularity and demand for cryptocurrency has aroused growing interest in the crypto industry. To create a company in this area, you need a license for cryptoexchange / cryptoexchanger / ICO.

The Czech Republic is one of the countries in Europe with advanced economic and political trends. On the territory of the state of cryptocurrency, you can freely pay for any goods and services – food, housing, clothing, leisure, etc.

HOW TO REGISTER A CREATIVE EXCHANGE IN THE CZECH REPUBLIC

The first time to register a crypto exchanger is the easiest in the Czech Republic. Having gained experience in the field of cryptocurrency, you can register your own stock exchange for cryptobusiness. Depending on the specific type of activity, the types of licenses are conditionally divided into:
• classic – exchange of cryptocurrency on each other;
• Fiat – with the ability to change real money for cryptocurrency and vice versa;
• traditional – control over the procedure for manipulating currency of all types;
• specialized – the influence extends only to the work of the crypto business.

WHAT WILL BE REQUIRED FOR REGISTRATION?

Of paramount importance is the choice and verification of the name for your crypto firm. After – you need a package of documents identifying the future owner, along with a certificate of no criminal record. Necessary requirement – legal address.

Duration – one year. This is followed by opening an account for business, recruiting employees, buying software and technical equipment.

In the final stages of registration, you need to have with you the entire package of documents relating to the company, pay state fees and submit the collected papers to the appropriate structures of the country.

THE POINT OF VIEW OF THE CZECH GOVERNMENT WITH RESPECT TO CRYPTIC BUSINESS IN THE CZECH REPUBLIC

The Czech code of laws does not interpret digital currency as a monetary unit. but as a commodity. Cryptobusiness in the Czech Republic does not require a license. But for international work with cryptocurrency it is possible to obtain a license – EMI.

Digital money is not subject to special taxes. But for paying cryptocurrency VAT is charged. Otherwise, the legal entity – the buyer is forced to pay value added tax instead of his supplier.

CZECH NATIONAL BANK ON CRYPTO-VALUE AND RELATED ACTIVITIES

The official opinion of the CNB states that Bitcoin is not included in the definition of non-cash currency. Accordingly, cryptocurrency is a symbolic money that does not have a fixed value, in contrast to the officially recognized currencies.

Bitcoin exchange can not be considered currency, so the control of the activity of cryptocurrency LCH does not exercise.

The head of the currency control department of the NCHB expressed fears that Bitcoin would become a tool to bypass the payment sanction on online games. Given this possibility, the Ministry of Finance was proposed to modernize the charter relating to the control of gambling.

WHAT DO WE NEED TO TAKE INTO ACCOUNT DURING REGISTRATION OF CRYPT-CURRENCY ACTIVITIES IN CZECH REPUBLIC?

With the growing popularity and extensive use of cryptocurrency, it is not within the jurisdiction of the state. Moreover, the NCB has established a ban on opening an account for crypto exchangers and cryptobirds.

In this regard, it will be necessary to open accounts for companies related to cryptocurrency in a different jurisdiction than in the Czech Republic.

It is necessary to take into account the requirements of the Ministry of Finance of the Czech Republic, according to which cryptocurrency activity is impossible without verifying the identity of each participant in this process.

The law requires sellers and buyers of cryptocurrencies in the Czech Republic to strictly comply with the rules of KYC and AMI. The firm must maintain and send reports on all stages and process of activity.

The requirements are due to the state’s fear of the number of tax evaders, fraudulent activities in the field of finance and terrorism.

SOLUTION OPTIONS

The workaround for registering a crypto exchanger / cryptoexchange is other countries with more progressive conditions.

FOR EXAMPLE:

1 United Kingdom – cryptocurrency laws have not yet been amended, but the state does not prevent cryptographic activities in all its forms. There is the possibility of withdrawal of digital money in fiat.
2 Estonia – Issues licenses for all existing cryptocurrency manipulations.
3 Malta recently adopted three statutes: on virtual financial assets, on innovative technologies and services, and on the operation of digital innovations (The Virtual Financial Assets Act, VFA; The Innovative Technology Arrangements and Services Act; The Malta Digital Innovation Authority Act, MDIA).
4 Luxembourg – issues EMI licenses that include all the ability to work with cryptocurrencies.
5 Switzerland – depending on the project issues a license or FINMA or SRO.
6 Belarus – issues licenses for crypto-activity, but asks not to withdraw funds outside the country.

The Japanese crypto business is considered to be leading and expensive in terms of the number of state exchange trades. In America, the license is specific and specified for each individual type of manipulation of digital money.

In view of the above, the state should be chosen to register the crypto business very carefully. Determine the options will help competent experts of Eternity Law International.

We successfully work more than 5 years in forty two countries. We provide professional advice on finance, corporate law, international licensing, and international planning. We are pleased to help you.

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