Eternity Law International News Setting up a crypto exchange business in Georgia

Setting up a crypto exchange business in Georgia

July 22, 2021

Among countries being quite democratic and welcoming to crypto-currencies, Georgia occupies an honorable place. Country’s authorities – state apparatus in general and the local regulatory body – are making tremendous efforts to make the procedure for creating business-structure for crypto-currencies exchanging as loyal and understandable as possible, however, along with this, properly legalized and regulatory strict.

Our company works with establishing crypto-companies and obtaining a crypto license in Georgia and in hundreds of countries globally. In particular, we are ready to become your reliable allies in licensing a crypto project in Georgia. We will take care of all the most challenging aspects of this process: opening bank accounts, collecting and preparing relevant documentation, and communicating with the regulator.

Georgia crypto-license requirements

In view of its loyal and progressive attitude towards crypto-assets and the mass circulation of crypto-currency funds, Georgia sets quite simple and understandable rules for creating business-projects connected with blockchain and obtaining crypto license in Georgia.

  1. Firms intending to obtain the status of officially established crypto-currency organizations must provide the regulator with data on all owners. The latter may not have Georgian citizenship, however, it is mandatory that they have no criminal record and no problems with the law. The last condition is not limited to just one jurisdiction – we are talking about the excellent reputation and legal obedience of these persons, regardless of the country of their activity.
  2. The firm must demonstrate evidence of its solvency if such a commercial structure intends to provide professional services for the exchange of crypto-currencies, storage of virtual assets, and so on.
  3. After the organization has passed and completed the registration procedure as an official crypto-structure, it is required to undergo a professional independent audit on a regular basis and keep accounting records.
  4. A company that intends to act as a provider of services for crypto-assets exchange and storage must immediately and urgently send a message to the regulator regarding any changes and modifications that are of serious and important significance – entity’s liquidation, temporary suspension of activities, and so on.
  5. The founders are required to demonstrate to the regulator a detailed and well-written business plan, a list of services that firm plans to provide, as well as a description of the methods and mechanisms for protecting against hacker attacks.

Setting up crypto exchange in Georgia: types of cryptocurrency licenses 

  • Crypto-currencies in jurisdiction do not act as legally-recognized means for making payments along with conventional fiat money, however, the state apparatus is actively committed to promoting a loyal attitude towards digital assets, in every way contributing to their mass distribution. Jurisdiction has a single general license allowing companies to conduct crypto-activities. This permission is issued to those organizations being registered as LLCs or JSCs and intending to conduct crypto trading Georgia. Founders of such firms may have residence in any country. The presence of such a permit grants companies formal rights to the following:
  • acquiring;
  • provision of services for crediting crypto-funds to accounts and debiting or transferring them;
  • issue of cryptocurrency wallets, their storage and maintenance;
  • use of various compounding tools, particularly, encrypted private keys;
  • making transfers using crypto-currencies;
  • crypto-currencies exchange among themselves and for fiat money.

Relying on it and taking into account that Georgian crypto-license provides real opportunities to sufficiently scale up the commercial activities of a crypto-exchanger or small exchange, it should be noted that this is perfect option for startups and novice entrepreneurs. Additionally, such permission may be attractive to financial institutions seeking to expand their services list.

Advantages of crypto licenses in Georgia

Georgia is quite attractive for activities connected with blockchain. This is facilitated by several arguments in favor of this country, in particular next-mentioned.

  1. Process for establishing and officially registering firm is quite fast. Getting cryptocurrency exchange license Georgia takes only 5-10 days, provided that the documents are submitted correctly and the company complies with the necessary standards.
  2. Low tax rates. It is worth noting that such dividends are subject to taxes. Rate is 15%. Accordingly, there isn’t income tax, VAT and estate tax for firms being FIZ registered.
  3. There are no rules and regulation regarding the standard thresholds for the size of the initial capital.

In addition to the specific excellences for setting up firms, it’s also worth highlighting general privileges that country itself provides.

  1. The crypto industry is actively developing, which contributes to mass distribution of crypto-currencies in financial space.
  2. Individuals don’t need to make mandatory payment of income taxes on any profit obtained from trading deals with tokens.
  3. Exchange of crypto-coins for fiat isn’t covered by VAT.
  4. Vending of hashes to other countries isn’t covered by VAT.
  5. Low expenses for electricity-supply. It makes it admissible to freely and in large volumes to engage in mining.
  6. There are no direct prohibitions on crypto-currency settlements.
  7. Georgia is one of leaders worldwide in terms of ease, clarity and transparency of running business-structure.
  8. There are many functioning cryptomats through which tokens can be transformed into real money.

To get crypto blockchain license in Georgia: whole procedure

First businessmen need to establish organization locally. By the way, this can be done remotely by issuing power of attorney for our specialist. To establish a company, our experts:

  • draw up constituent documentation – Statute and minutes of meeting. Apostille of a Georgian notary are not needed;
  • will negotiate with local representatives to include company in General Entrepreneurs Register.

Then, it’s necessary to fill out special form, which is then transferred to PPE-administrator. After that, a permit is provided. Additionally, for complete business-structure, you need to open an account with a foreign banking institution. You can choose, for example, Singapore, Latvia, Kazakhstan, Macedonia, Cyprus, etc.

Our firm gives professional assistance in getting cryptocurrency license in Georgia. In addition, we provide support in obtaining permits for other commercial areas and jurisdictions, in particular, Forex broker licenses in Singapore, Malta, the UK and other countries. We’ll help you to open account on most appropriate and stable conditions.

Taxation of crypto-companies in Georgia

As noted earlier, local regulation is quite loyal in terms of taxes.

  1. Individual capital holders don’t pay taxes on incomes obtained from trading operations with crypto-currencies.
  2. VAT doesn’t apply to deals involving crypto-currencies exchanging for fiat.
  3. VAT also doesn’t cover deals for vending of computing power abroad.
  4. Tax on dividends is 15%.

How much is it to get crypto-licenses in Georgia?

Cost of procedure to open a cryptocurrency company in Georgia and of licensing crypto-business is calculated purely individually in each individual case. This is due to the fact that the total cost may differ, since it depends on many related factors.

Our professionals have many years of expertise and extensive professional knowledge to help you get your business up and running as soon as possible. We will calculate the correct cost for you, and also help to significantly optimize costs.

What is a cryptocurrency exchange in Georgia?

Cryptocurrency exchanges are platforms where entrepreneurs and individual users can officially exchange cryptocurrencies among themselves and for fiat funds. Such sites are regulated by local regulatory authorities in each jurisdiction. Crypto exchanges can carry out legal and unrestricted activities only if they become the holders of the appropriate cryptocurrency license in Georgia.

Is cryptocurrency regulated in Georgia?

Any interaction with cryptocurrencies is not subject to regulation at the legislative level. Accordingly, all crypto operations are carried out without the intervention of a supervisory authority. The only and main legal basis for the cryptosphere is the decision of the Minister of Finance of Georgia – a legal act through which interaction with crypto-assets is determined. Crypto investors also need to bring their business into compliance with European directives and get cryptocurrency exchange license Georgia.

Which bank in Georgia supports cryptocurrency?

Georgian banks do not provide services for placing cryptocurrency in accounts or making transfers involving crypto assets. However, the Central Bank of the jurisdiction does not prohibit the use of cryptocurrencies as such. Firms that plan to conduct activities related to crypto-services must obtain appropriate crypto license in Georgia.

How is Georgia using blockchain?

Georgia does not officially regulate cryptocurrencies and does not consider them as means of payment. However, crypto transactions are not prohibited in this jurisdiction. Cryptocurrencies can be exchanged among themselves and for fiat money. Activities involving cryptocurrencies are not permitted without obtaining a crypto license in Georgia.

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