When an entrepreneur decides to open a company in Germany and make it functional for cryptocurrency, he must comply with the special provisions adopted by the German government related to virtual coins and transactions. Such a company can also operate as a Virtual Asset Service Provider (VASP) in Germany.
We are at your service if you want to apply for a crypto license in Germany.
| Quick Facts | |
|---|---|
| Special legislation available (YES/NO) | No, however, such companies must abide by the Banking Act and Securities Institutions Law. |
Regulatory authority | The Federal Financial Supervisory Authority in Germany (BaFin). |
Types of entities used to register the company in Germany | The private and public limited liability company. |
| Special management requirements (if any) | The manager(s) must have sufficient experience in the financial or crypto fields. |
| Minimum capital requisites (YES/NO) | Yes, EUR 125,000. |
| License required (YES/NO) | Yes, BaFin issues crypto licenses in Germany. |
| Licensing exceptions (if any) | No. |
| Timeframe to register the company (approx.) | Approx. 1 month. |
| Anti-money laundering regulations applicable (YES/NO) | Yes, the Money Laundering Act. |
| Specific requirements for foreign investors (YES/NO) | No, foreign investors are not subject to distinct requirements. |
| Activities permitted for crypto companies | – crypto investment advice, – crypto exchange, – ICO, – custodian services, – crypto gambling, – e-wallet creation and administration. |
| Other special requirements applicable (YES/NO) | Yes, in order to obtain the license, a crypto company must draft a 3-year business plan and hire specialized staff (financially trained personnel). |
| Taxation of crypto companies in Germany | Crypto businesses are subject to the corporate tax in Germany. |
| Why choose Germany | – access to a dedicated license, – the possibility to complete more activities compared to other countries (such as crypto gaming), – popularity of crypto coins among Germans. |
| Support in launching a cryptocurrency business (YES/NO) | Yes, you can rely on our German company formation agents for full assistance. |
Table of Contents
Are cryptocurrencies legal in Germany?
Yes, they are. They are regulated by the Federal Financial Supervisory Authority (BaFin) and are classified as financial instruments or digital assets.
Can I open a crypto business in Germany if I am a foreigner?
Yes, you can, as there are no restrictions in this sense.
How can I register a cryptocurrency company in Germany?
By following the general German company formation steps, respectively:
- choose a legal form: the private or public limited company are preferred by most investors;
- reserve a trading name;
- prepare the Articles of Association and information about the shareholders and directors and file them with the Trade Register;
- open a bank account to deposit the share capital;
- register for taxation;
- apply for the crypto license.
What are the requirements to obtain a crypto license in Germany?
You must ensure that:
- you have a physical presence in Germany as office space and to keep the operational systems of the company;
- you appoint at least 2 directors who do not have criminal records and have experience in the crypto sector;
- you have the capital required to run crypto-related activities.
Here is also our infographic on this subject:
Is there a minimum capital required to obtain a crypto license in Germany? If yes, what is the amount?
Yes, there is. The amount depends on the class of the license. There are currently 3 types of licenses you can apply for:
- the Class 1 license, which requires a minimum capital of EUR 50,000;
- the Class 2 license, which requires a minimum capital of EUR 125,000;
- the Class 3 license, which requires a minimum capital of EUR 150,000.
What are the requirements to obtain a VASP license in Germany?
Here are the main aspects to consider in light of obtaining a German VASP license:
- the company must put in place Risk-Based Approach (RBA) policies;
- the business is also required to complete Enhanced Due Diligence (EDD) on its clients;
- just like in other countries, a Know-Your-Customer (KYC) approach must also be undertaken when filing for the license.
Compared to other countries, it is also worth noting that Germany is a member of the Financial Action Task Force (FATF), which ensures greater transparency and security for the clients of crypto businesses.
What are the documents required to obtain a crypto license in Germany?
You need to file the following:
- the CVs or resumes of the directors;
- the documents proving compliance with the crypto regulations;
- the Anti-Money Laundering and Know-Your-Client policies;
- a description of the governance structure of the company;
- information about the IT system and security mechanisms.
Considering it is also possible for corporate entities to be shareholders in crypto companies, these are also required to submit various information, such as:
- annual accounts for the last 3 fiscal years;
- consolidated annual accounts in the case of corporate shareholders belonging to company groups.
What are the management requirements for a crypto company in Germany?
They include:
- having sufficient knowledge or experience in their field;
- being able to dedicate the necessary time to perform their duties.
Here is also a video guide on this subject:
What are the activities I can complete with a crypto license in Germany?
Here they are based on the Class of the license:
- Class 1: crypto transactions, crypto consultation, intermediating and overseeing clients’ orders, asset portfolio management, asset transfers;
- Class 2: custodian and administration services, crypto exchanges against money or other digital coins + all the operations available under the Class 1 license;
- Class 3: crypto trading platform operations + the activities permitted under the Class 1 and 2 licenses.
How long does it take to obtain a crypto license in Germany?
It can take between a year and one and a half years.
Feel free to contact one of our experts in company formation in Germany to speed up the procedure of setting up a cryptocurrency company or a cryptocurrency hedge fund in this country.