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Set up a Czech Cryptocurrency Company
Updated on Wednesday 15th January 2020 Rate this article
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based on 2 reviews
Cryptocurrency became a popular way of performing online transactions in Czech Republic, as there are more than 80 service providers that operate in this country. Cryptocurrency designates a type of virtual transaction that uses encryption for generating units that are secured in the online environment. Investors who want to open a company in Czech Republic in this field are required to follow the regulations that were created for this type of businesses. Our team of agents in company formation in Czech Republic can provide assistance for the registration of a business that uses cryptocurrency (bitcoin) transactions.
Czech Republic can be the ideal market for entering the cryptocurrency industry, considering that this country is one of the pioneers of this type of activity. Currently, the country’s capital city, Prague, is one of the locations with the highest density of cryptocurrency ATMs (in Bitcoin). The city has a very well developed infrastructure for cryptocurrency users. Prague was the first city that opened a café where clients could pay only in Bitcoin and currently, crypto-users can also pay in Bitcoin for gas bills.
Cryptocurrency regulations in Czech Republic
The cryptocurrency industry in Czech Republic was not regulated by the local authorities until recently, but the Czech government created a legal framework for such activities at the beginning of 2017, imposing new rules for the service providers operating in this country.
Businessmen interested in starting the procedure of company registration in Czech Republic for a cryptocurrency business must know that, amongst the new proposed regulations, the Finance Ministry requires such companies to determine the identity of the users, an aspect which has not been requested prior to the anti-money laundering law prepared for this field of activity. Our team of specialists in company formation in Czech Republic can offer further assistance on the applicable legislation available for this type of businesses.
Besides these, in 2019, the Czech authorities have announced that the cryptocurrency companies will need to comply to a set of additional regulations. For example, cryptocurrency companies are required to register with the Trade Licensing Authority. Provided that the company did not conclude all the necessary steps (and in due time) in order to obtain its license, the institution is allowed to apply a fine of up to CZK 500,000.
Businessmen who want to open a company in Czech Republic as a cryptocurrency business must also be aware of the fact that the local authorities will expand the scope of the current cryptocurrency law to a wide range of cryptocurrency activities, such as: cryptocurrency exchanges, cryptocurrency exchangers and to developers of crypto-wallets.
The Czech Republic is a member state of the European Union (EU), which considers, through the regulations of the European Central Bank, that cryptocurrencies are not seen, from a legal point of view, as currency. However, the governments of each country has the right to take the necessary approach toward the usage of cryptocurrency on its territory and in the case of Czech Republic, a liberal approach was preferred, with the mention that the local authorities do impose specific regulations that fall under the scope of the Anti-Money Laundering Law.
Thus, cryptocurrency businesses operating in this country have to comply with the rules prescribed under the Czech Anti-Money Laundering Act (Act No. 253/2008 Coll.), which defines what a cryptocurrency is and the types of entities that use cryptocurrencies. At a European level, EU member states must enact in their national laws the EU's Fifth Anti-Money Laundering Directive, which stipulates the specific types of cryptocurrency activities that must fall under the scope of this law.
However, the Czech authorities plan to regulate the activity of any cryptocurrency-related company and this is why those interested in starting the procedure of company formation in Czech Republic should verify the current requirements (including the licensing requirements); our team of specialists in Czech company formation can provide in-depth details on the steps for obtaining a license in this field of activity.
Statistics on cryptocurrencies
The usage of cryptocurrency became a popular event not only in Czech Republic, but also at a global level. Countries across the world started creating a legal environment that can secure cryptocurrency transactions, as it was the case of Czech Republic. Businessmen or natural persons who want to invest in cryptocurrency in Czech Republic or elsewhere should know the following:
- • Bitcoin is the most popular cryptocurrency, which appeared in 2009;
- • at the level of 2019, there were 153 million Bitcoin users across the world;
- • the average daily transactions concluded in Bitcoin account for $6 billion (EUR 5,3 billion);
- • the first purchase that was made using cryptocurrency was recorded in May 2010;
- • in August 2015, the first initial coin offering (ICO) took place, a method through which one could raise capital by using cryptocurrencies.
Why invest in the Czech cryptocurrency market?
Considering that there are numerous reputable jurisdictions for starting a cryptocurrency business, as an investor, it is difficult to decide on a particular country. With regards to choosing Czech Republic as a cryptocurrency business destination, investors should take a set of factors into consideration. For instance, using Bitcoin for cryptocurrency transactions is completely legal. Currently, the country enjoys of a high rank when referring to the safety of cryptocurrency transactions: 7.5/10.
The cryptocurrency can also be used as a means for raising capital for a start-up company. This can be done through ICOs, as mentioned above, which represents a crowdfunding method. Czech Republic has 42 ICOs and the Czech residents can easily participate in such procedures. At a global level, Czech Republic provides one of the most attractive markets for investing in the cryptocurrency sector, ranking as 6th jurisdiction in a list containing 249 countries.
Know Your Customer (KYC) procedures in Czech Republic
Companies that accept Bitcoin transactions in Czech Republic will be required to apply the Know Your Customer (KYC) procedures for transactions with a value above EUR 1,000. In this sense, the procedure of company formation in Czech Republic for cryptocurrency businesses will impose merchants to request information on their clients, such as: identity card, gender, nationality and address.
Moreover, cryptocurrency businesses may also be imposed with the value added tax in the near future, following the European Commission’s regulations related to money laundering activities and criminal financing that can be associated with this type of payment. Businessmen are invited to contact our team of consultants in company registration in Czech Republic for further details on other regulations that may be imposed to cryptocurrency providers.
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Call us at +420 721 565 868 to set up an appointment with our specialists in company formation in Brno. Alternatively you can incorporate your company without traveling to Czech Republic.
As an CorpexLab client, you will benefit from the joint expertize of local experts and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Czech Republic.
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Mihai Cuc, Partner of
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Read more testimonialsMihai Cuc, Partner of
Enescu&Cuc; Law Firm
www.romanianlawoffice.com