Crypto Licensing in Czech Republic

Benefits of Obtaining a Crypto License in Czech Republic

• Speed: Among the fastest licenses in the EU, taking just 2-3 weeks.
• Global Flexibility: No need for a physical presence; the company director, AML officer, and HQ are free to be located abroad.
• Tax Advantage: a favourable tax regime.
• Capital Flexibility: No share capital requirements, only 1 Czech Krone needed without the obligation to open a corporate account.
• Customer Onboarding: Allows seamless onboarding of EU customers, with EIDAS methods for non-EU residents in addition to standard KYC measures.
• Management Qualifications: No strict qualification requirements for senior management, minimal due diligence for board members and KYC officers, requiring only a certificate of non-criminal record.

Types of cryptocurrency licenses in the Czech Republic 

In Czech legislation, there aren’t distinct licenses for crypto activities. Instead, the license falls under activity No. 81, labeled as “provision of services related to a virtual asset.” According to the Czech AML Act, a crypto company is defined as an entity engaged in buying, selling, storing, managing, transferring, or facilitating the purchase or sale of a virtual asset. This encompasses providing financial services linked to the virtual asset or offering similar services associated with it. Therefore, the Czech crypto license encompasses the following transaction types:

1. Crypto Exchange: Facilitating the exchange of fiat currency to virtual currency and vice versa, as well as the exchange of virtual currency to another virtual currency for a fee.
2. Crypto Wallet and Custodial Services: Managing cold and online wallets for secure cryptocurrency storage, including the creation and storage of encrypted client keys.

Main Requirements for Obtaining a Crypto License in Czech Republic

• Establish internal policies, including Anti-Money Laundering and Know Your Customer (AML/KYC), together with internal control policies.

• Appoint an employee specifically responsible for fulfilling Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) obligations.

• Proactively identify customers and continuously monitor established business relationships to enhance compliance.

• Fulfill obligations related to international sanctions regimes, ensuring a global standard of compliance.

• Safely store and manage customer data, strictly adhering to data protection standards for enhanced security.

• Establish a swift reporting mechanism for suspicious transactions and specific operations to enhance transparency and compliance.

• Ensure that the company’s shareholders and senior management maintain a positive business reputation and possess a clear criminal record.

• Incorporate a proactive risk-based approach throughout licensed activities, considering risks identified through a comprehensive national risk assessment.

• Strictly adhere to all other obligations arising from applicable law to maintain legal compliance and ensure a secure operating environment.

Process of Obtaining Czech Republic Cryptocurrency License

Step 1 – Company Registration (2-3 Weeks)

Upon initiating the process, the company is officially registered with the chosen name, preparing for the subsequent crypto license application at the Czech Trade Licensing Register, all achieved within 2-3 weeks.

Steps Involved:

1. Sworn Translation of Documents:

• Ensure a sworn translation of the power of attorney and certificate of criminal records into Czech.

1. Notarial Deed for Company Registration:

• Facilitate the notarial deed required for the formal registration of the company.

1. Commercial Register Entry:

• Complete the entry of company data into the commercial register, finalizing the registration process.

Step 2 – Crypto Licensing in the Czech Republic (2 Weeks)

This phase ensures that the company successfully secures a license for engaging in crypto-related activities, marking readiness for operational activities.

Process steps:

1. Gathering Client Business Information:

• Obtainment of detailed information about the client’s business, including risk appetites, customer geography, and nature of operations. Develop customized Anti-Money Laundering/Know Your Customer (AML/KYC) policies aligned with the client company’s cryptocurrency activities.

1. License Application Submission:

• Preparation and submission of the license application to Czech authorities. Maintain communication throughout the issuance process.

1. AML Officer Recruitment and Training:

• Recruitment of an AML officer for the company and provide comprehensive training. Tailoring their skills to align with the company’s specific operations. Instruct the officer on regulatory reporting and registration procedures.

1. AML Officer Registration:

• Preparation of the AML Officer’s registration form at the Financial Analytical Office (FAU) and submission of the application.

STEP 3 – Corporate Account Opening and Accounting Process (2-3 weeks)

This is the final phase where the company achieves full operational status, with a successfully opened corporate account meeting both tax authorities and regulatory standards as a virtual asset service provider..

Process steps:

1. Bank/EMI Selection and Risk Assessment:

• Conducting an in-depth analysis to identify the most suitable Banks/EMIs. Compare the risk appetite of the chosen bank with that of the client based on previously formulated AML policies.

1. Document Collection and Onboarding Initiation:

• Gathering essential documents from the Client, encompassing the flow of funds, source of wealth, purpose of account opening, key partners, company website, utility bills, etc. Initiate onboarding simultaneously with 2-3 crypto-friendly EMIs.

1. Client Guidance through Account Opening:

• Guiding the client’s company through the entire account opening process, ensuring a seamless experience.

1. Accounting Rules Development:

• Developing tailored accounting rules for the client’s crypto company, aligning with industry standards and regulatory requirements.

1. Accountant Integration and Preliminary Consultation:

• Integration of an accountant into the system and provide preliminary consultations on the conduct of activities within the framework of crypto accounting.

Step 4 – Post licensing support (Optional)

This optional stage completes all necessary arrangements, ensuring the VASP license holder is fully operational. It includes:

• Internal control services.
• Assistance with customer complaints.
• Audit of AML/KYC procedures.
• Periodic employee training.
• Representation during regulator supervision.
• Preparation of legal opinions.

Additional Services Related to Obtaining Crypto License in Czech Republic 

1. Establishment of organizational structure – assistance identifying the appropriate legal structure, incorporation of holding companies in tax efficient jurisdictions, transferring companies shares, designing ownership structure, etc.;
2. Tax advisory – guidance and advice regarding tax obligations and liabilities, minimizing tax liabilities from cross-border activities, creating a tax planning strategy, etc.;
3. Preparation of internal documentation – preparation of tailor made AML / CTF Policy with Annexes, Terms & Conditions, Privacy Policy, Cyber Security Policy, etc.;
4. Assistance in hiring employees – guidance and support to employers who are looking to hire new staff. Such service includes potential employees background / knowledge check, interviewing, establishment of employment policies and procedures, etc.;
5. Assistance in creating partnerships – support and advisory in various potential partnerships and collaborations with other entities in terms of additional services (e. g., IT, KYC, banking service providers) or additional financing (e. g., organizing meetings with VC, agnel investors, preparation of pitch deck, etc.);
6. Legal support in other crypto related projects – assistance in token offering legal support (ICO/STO/IEO), private placement rounds, preparation of legal opinions, analysis of business models, etc.

For more please see our Services page.

Summary of Crypto license in the Czech Republic

Project time frames	Up to 1 month
State fee for application	€ 0
Required share capital	€ 1
Corporate income tax	15%
Annual supervision fee	€ 0
Local staff member	Not required, recommended
Physical office	Not required, recommended
Accounting audit	Not required
Bank account options	European EMIs, specialized credit institutions