How to get a cryptocurrency license in Croatia
Cryptocurrency activity in Croatia in 2021 is becoming increasingly popular. Only in the first 5 months of this year the turnover on Zagreb Stock Exchange and exchange offices was about 900 million kuna. The government could not ignore this moment and decided to regulate the market, including starting to issue crypto-licenses.
Legal regulation of the cryptocurrency market
There is no Cryptocurrency Law in Croatia, but that does not mean that trading is not regulated. The current Income Tax Act treats cryptocurrency as a form of investment. Based on that, exchanging it for real money is taxed at a flat rate of 12%. If you exchange one cryptocurrency for another, you don't have to pay the IRS.
Cryptocurrency mining is taxed under the Income Tax Act. In other words, the tax is paid from other income (intermittent mining) or self-employment income (continuous mining).
In addition, the Prevention of Money Laundering and Terrorist Financing Act came into effect on January 1, 2020. It applies to all companies involved in virtual currency trading and/or providing storage services for cryptocurrency on virtual wallets.
Cryptocurrency license in Croatia
In order to regulate the crypto market, Croatia started issuing crypto exchange and custody service provider license. The company, which will receive a license, has the right to engage in the exchange of cryptocurrency, as well as to provide storage services for virtual wallets.
To obtain a cryptolicense in Croatia in 2021, one must:
- Register a company. Minimum authorized capital is 2.7 thousand euros.
- Have a legal address in Croatia.
- Authorize with Hanfa (Croatian Financial Services Supervision Agency) to obtain cryptocurrency license.
- Prepare all necessary documents to confirm that you are not engaged in money laundering and that your reputation is crystal clear, with no criminal record.
You may also need other documents. Check with our specialists what kind of documents you need. We can help you prepare documents, open a company remotely and obtain a license.
Advantages of license in Croatia
- Cryptocurrency can be used legally in Croatia. It can be stored, transferred, sold. At the same time, cryptocurrency is not a legal means. That is, sellers are not obliged to accept it when paying as local currency.
- Exchanges and various platforms for cryptocurrency transactions are allowed in the country.
- The company is not obliged to report to anyone about transactions and possible profits in cryptocurrencies. Profits need to be reported only after the cryptocurrency (any) has been transferred to kuna and appears in the account.
- Croatia is part of the EU, which offers great prospects for companies intending to operate in European markets.
- Croatian license opens up the possibility for cryptocompanies to work directly not only with individuals, but also with large financial institutions and the business sector.
- Croatia could become one of the European blockchain centers, as it is going to ask the EU for an indulgence regarding the legal regulation of the digital market.
- Cryptocurrency investors in the country are protected by AML regulations.