The cryptocurrency sector is evolving rapidly, giving rise to numerous major firms and emerging startups in this domain. But the question arises: which location should you opt for?

We aim to shed light on the crypto license in the Czech Republic in this context. This knowledge is essential for anyone looking to navigate this field.

Crypto Licensing Criteria in the Czech Republic

  1. The company must verify customer identities and continually monitor business relationships.
  2. Shareholders and top executives must maintain a reputable business standing and a clean criminal background.
  3. Compliance with international sanctions is essential.
  4. Mandatory internal policies must be in place, including AML/KYC and internal controls.
  5. Secure storage of customer information is a prerequisite.
  6. The company is responsible for reporting any suspicious transactions and relevant activities.
  7. An appointed staff member is required to oversee AML/CTF compliance.
  8. A risk-based strategy should be adopted for all licensed activities, considering the risks highlighted in the national risk assessment.
  9. Adherence to all other legal obligations is necessary.

Crypto Licensing Varieties in the Czech Republic

The Czech crypto license encompasses these transaction types:

1. Conversion between fiat and virtual currencies

  • Necessary for businesses to charge fees for cryptocurrency exchanges.

2. Trading between different virtual currencies

  • Permits companies to exchange digital currencies for fiat and vice versa for a fee.

3. Management of virtual currency wallets and safeguarding private keys (Custodial wallet service)

  • Applicable to the exchange services mentioned above.

4. Virtual currency transfer services

  • Businesses that offer wallets for cryptocurrency storage generate encrypted client keys and maintain their security.

Czech Republic Crypto License Benefits

Quick Licensing: Among the EU's fastest at 2-3 weeks, including company setup and activity registration.

EU Customer Access: Easy onboarding for EU clients, with EIDAS verification for non-EU customers alongside standard KYC.

Flexible Company Structure: No local presence is needed for the director, AML officer, or headquarters.

Relaxed Management Criteria: Minimal checks for senior management, only needing a non-criminal record certificate.

Favorable Taxation: Ranked 5th in tax competitiveness among 37 EEA nations.

Affordable Legal Costs: Ranges from 1900 to 7000 EUR based on infrastructure choices.

Minimal Capital: Just 1 CZK is needed, without the necessity for a corporate account.

Annual Reporting and Audit Obligations

Upon obtaining a work permit, the annual submission of a detailed report to regulatory authorities is mandatory. This report should cover all financial transactions, employee counts, and the company's services.

Additionally, large companies are required to conduct an annual audit. This applies to businesses fulfilling at least two of these criteria:

  • Employment of over 50 staff on average;
  • Financial turnover surpassing 80 million CZK ;
  • Total assets exceeding 40 million CZK.

Engaging a local accounting firm is advisable for accurate and timely tax filing and payment.

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Prifinance stands out for its custom approach to each client's project, focusing on understanding their unique needs and goals. The team offers specialized solutions, adept at handling both individual issues and the comprehensive development of large projects, mindful of market trends.