Best EU country for crypto business

Depending on the nature of your project, choosing the best EU country for crypto business can be a daunting task. Although the European laws create a uniform regulatory scenario across the EU members, there are still many substantial differences from a jurisdiction to another, especially when it comes to avant-garde business models, such as cryptocurrencies.

If you want to make business with cryptocurrencies within the EU, a jurisdiction analysis is strongly recommended in order to avoid bad surprises.

When it comes to crypto-businesses, there are some jurisdictions that are undoubtedly more favourable than others. Some of them are well-known, others not so much.

Let’s evaluate the most notable among them.

Germany

After the implementation of the European AMLD5, the existing law incurred in major amendments about the licensing policy. The Kreditwesengesetz now defines a new category of financial asset: crypto assets.

In order to be considered such, crypto assets must not be issued by a central bank or public entity and they are not legally recognised as a currency.

They can be, however, exchanged, sold or bought electronically.

Crypto custody businesses were also defined as a new financial service (basically, the German law now recognises cryptocurrency brokers as financial professionals). In order to operate, they need a crypto license issued by BaFin under the terms of the Kreditwesengesetz.

Regulations, however, are still under review and subject to many changes, so the scenario could change any time.

Estonia

Most of the operations to obtain an Estonian crypto license can be done with the digital platforms provided by the government.

Estonia is probably the most digital-friendly country in the EU.

The FIU is in charge of the whole process and it has connections with the Estonian Police and the Border Guard Board. The reason is simple: the Estonian authorities want to minimise the risk of money laundering activities, thus they can allow simplified customer due diligence measures, in a virtuous cycle of low risks and easy applications.

At the moment, Estonia is the best EU country for crypto business.

Malta

Unfortunately, Malta is not as crypto-friendly as it looks. According to your needs, you will need to apply for a crypto license of a certain class.

Briefly, there are four classes:

  • Class 1: you can receive and transfer orders;
  • Class 2: access to virtual financial assets services, but not operations;
  • Class 3: access to all operations but exchange;
  • Class 4: includes virtual financial assets operations, custody services and funding.

Furthermore, you need a physical address and a proof of good faith, so you will be required to incorporate a private limited liability company, rent an office and hire at least three employees.

Not so good for a country that claims to be crypto-friendly and avant-garde.

Lithuania

Lithuanian regulators are making a big effort to keep pace with their Estonian neighbours in terms of new financial instruments.

Now, any EU or non-EU business can apply for a crypto license issued by the FIU.

All you need to do is prove that you and your fellow members of the management board have an impeccable reputation.

There are two types of crypto license:

  • Exchange license: for example, if you exchange cryptocurrencies owned by your clients and get a fee in return;
  • Depository wallet license: for example, if you operate as a crypto custody company.

Many banks in the country are turning crypto-friendly, so opening an account won’t be too hard, once you get all the required permissions, to have a way to convert fiat into crypto and vice versa.

Switzerland

The Swiss Tax authority sees cryptocurrencies as assets. As such, they can be legally bought and sold or exchanged for a number of activities.

Even though Switzerland is not an EU country, it can be a very favourable jurisdiction for a number of reasons.

There are various types of cryptocurrency licenses depending on what business you want to run, but everyone can apply with no restrictions, and there are clear guidelines by FINMA.

Launching an ICO is still a bit of a hassle due to developing regulations, but definitely not a hindrance.

Timing, however, is a huge obstacle: obtaining a crypto license can take as long as one year, but this is only because deep KYC and AML checks are carried out before issuing the license.

Interested in other jurisdictions?

If for any reason you want to start a crypto business somewhere else, contact us and we will help you find the best EU country for crypto business according to your needs.

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  1. I am starting a low tech mushroom farm. I am interested an ICO? How to best present the information of my business, its model, principles, and our goals.

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