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.