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Crypto License in Gibraltar

Gibraltar is highly sought after as an international tax haven. In addition, the Member of the European Union is highly respected by offshore professionals due to the development of the financial services sector and a favorable tax structure. The entire economy of Gibraltar is based on its status as an offshore financial services center. For several years now, this area has included blockchain technology. It would be surprising if such a popular destination were not represented in a country that stands out for its favorable laws. The regulator has issued numerous crypto license Gibraltar to blockchain operators.

The quality of the permit is confirmed by many years of experience. In addition, some of the world’s most famous cryptocurrency exchanges and new digital coins have chosen Gibraltar as their licensing jurisdiction. It confirms that Gibraltar is a suitable jurisdiction to obtain a cryptocurrency license. What are the features of this license? The Gibraltar regulator has created a unique, flexible framework for initial currency offerings, cryptocurrency exchanges, and digital wallet providers. Over the years, this jurisdiction has managed to maintain its credibility in the blockchain technology market and establish itself as one of the preeminent jurisdictions for registering and licensing cryptocurrency companies.

Cryptocurrency Regulation in Gibraltar

Consideration Period

6 months

Application Fee

from 11 800 euros

Required Capital

24,000 euros

Income Tax

12.5%

Annual License Fee

from 11 800 euros

Company Employees

at least two

Physical Office

necessary

Accounting Audit

necessary

 

Cryptocurrency Legislation in Gibraltar

The cryptocurrency industry has long remained without full regulation. Starting in 2018, the jurisdiction of Gibraltar began to bring clarity to the management of cryptocurrency activities. The national authorities implemented the Distributed Ledger Technology Framework (DLT Framework) during this period. This framework contains licensing requirements for cryptocurrencies and other blockchain-based businesses. To date, Gibraltar continues to promote legislation aimed at the integrity of the crypto business and the implementation of blockchain-based products and services.

The Financial Services Act regulates DLT activities in Gibraltar. This legislative act is the main one in the country. Initially, the Law provided for nine basic principles of regulation. 

However, the legislative action is supplemented by the 10th principle of regulating digital ledger technology (DLT). This principle aims to prevent and eliminate insider trading and manipulating prices and information. According to paragraph 10, each DLT supplier is obliged to conduct its economic activities in good faith so that the reputation of the market remains unchanged. The actions of crypto companies are further displayed and regulated through the Proceeds of Crime Act (PCA) and the Guidance on Control Systems. The legislation was created to prevent using the financial system for money laundering, terrorist financing, and other financial crimes.

Benefits of Obtaining a Cryptolicense in Gibraltar

By obtaining a license for crypto-currency activities in Gibraltar, companies receive several advantages:
  • Provides lucrative lending opportunities for crypto startups.
  • Favorable and flexible taxation system.
  • All activities related to digital currency are governed by EU law.
  • Implements crypto regulation at the national level since 2018.

Crypto Licensing in Gibraltar

Any company is primarily interested in obtaining a crypto license in Gibraltar. The distinguishing feature of this procedure is that the mechanism is very efficient and well-structured. In addition, there are no hidden conditions that could cause discomfort in the future. The only negative is the license cost, which may vary depending on the nature of the licensed activity. The amount of the state fee can range from 11,800 to 35,000 euros. The application is considered for up to three months. The application process consists of several steps:
  • Interaction before applying
  • Initial Application Evaluation
  • Full application and presentation
Below, you can learn more about all the stages of obtaining a Gibraltar License for cryptocurrency activities.

Interaction Before Applying

At the first stage, a Gibraltar cryptocurrency company that plans to obtain a license must initiate contact with the GFSC. To do this, a potential candidate should contact the GFSC Risk Management and Innovation team. This stage also discusses the type of economic activity envisaged, the business model, and their proposals for the application. Only companies that use DLT to transfer or store valuables can proceed to the second step of the license application process.

Initial Application Evaluation

The initial assessment is carried out within two weeks. A task force categorizes the applicant according to the inherent risks and complexity of the proposed business model and activities. In determining the inherent risks and complexity of the proposed business model and activities, the following factors are considered:
  • Distributed ledger technology
  • Using smart contracts
  • Type of clients the company will work with
  • Level of interaction with other regulatory regimes
  • Risks and complexities associated with investment products and services
  • Number and variety of products and services offered
  • The complexity of the organizational structure of the company.
  • Scale of proposed operations
  • Exposure to money laundering and terrorist financing.
After passing the second stage and the initial assessment, the company receives all the information and further step-by-step instructions. Some details may need to be adjusted, as well as the filing of additional documents and the payment of the prescribed full filing fee. The expected annual fee is also communicated to the customer at this stage. Once the notification requirements are met, the company proceeds to the last step and can apply for a DLT provider license.

Full Application and Presentation

At the last stage, companies must submit comprehensive information and supplement the application with data on financial forecasts, the existence of a business plan, proof of applicable rules, and more. Each founder must additionally provide the following documents:

  • Notarized copy of an identity document
  • Notarized copy of proof of residence (such as a utility bill)
  • Certified bank statement
  • Two professional letters of recommendation
  • Confirmation of the source of funds
  • Notarized confirmation of the absence of a criminal record
  • Notarized copies of diplomas of education

After all data has been transferred, company representatives should make a presentation to the GFSC. Any specific requirements based on the nature and complexity of the proposed business activity will be communicated during the initial evaluation of the application. Typically, a presentation should cover the following areas:

  • Background information on top management, including the relevant skills and experience required to run the business.
  • Business plan including company structure, products, and services, target market, strategy, etc.
  • Financial projections
  • Evidence of a company’s ability to comply with regulatory principles
  • The presentation is made available to the Risk and Innovation team, panelists, and any other GFSC decision makers. It is to reduce the time needed to understand the nature of the business, assess the company’s compliance with the rules, and expedite the application process.

The presentation is one of the most critical stages for obtaining a license. The authority can only grant a license to a DLT provider if the applicant provides sufficient evidence that it will comply with the regulatory principles. Therefore, the applicant must confirm their intention to operate and be able to pay the established annual fees, which also depend on the complexity of the business and its inherent risks. The company undertakes to inform the licensing authority of any changes.

Gibraltar Licensing Requirements

Obtaining a license for any activity in the crypto industry, the company follows many rules and principles listed below:
  • Carry out several actions to combat money laundering.
  • Develop an internal control policy regarding operations with crypto assets.
  • Adequately assess risks and take measures to minimize such risks.
  • Establish a position and appoint a person responsible for compliance with these rules.
  • Inform customers about existing procedures for compliance and control, as well as work with customers’ personal data.
  • Register and keep records of all current transactions with crypto assets.
  • To carry out constant internal monitoring and audit of operations with crypto assets.
Cryptocurrency regulation

This is a list of basic rules that a company must follow. However, the complete list of data will be available to the company during the crypto license Gibraltar application process.

How to open a crypto company in Gibraltar?

Only companies registered in Gibraltar can apply for a license. The easiest way to register activity in Gibraltar is to open a private limited company, which can be created and registered within a week. Required documents for registration of a Limited Liability Company:
  • Charter.
  • Detailed business plan, including financial projections for the coming period.
  • Founders ID.
  • Proof of residential address.
  • Power of attorney if the company is established remotely.
There are also additional requirements that companies with cryptocurrency activities may put forward. The representative of the company will be informed about this additionally.

Taxation of Cryptocurrency Projects in Gibraltar

All crypto-currency companies registered in Gibraltar must adhere to the imposed tax on their activities. Control over the amount of taxes, collection, and disposal belongs to the Tax Service. Cryptocurrency companies are usually subject to the following general taxes:
  • Corporate tax (CT) – 12.5%
  • Social Security (SI) – 20%
  • Stamp duty (SD) – 0-3% for real
    • estate or £10 (about €12) per share.
The amount of tax may vary depending on the company’s economic activity and resident status.

The Cost of a Cryptocurrency License in Gibraltar

A company that has received the appropriate crypto currency exchange license must pay a fixed annual fee, which also depends on the complexity of the business and its inherent risks. The annual fees are as follows:
  • Difficulty category 1 – 10,000 pounds (about 11,600 euros).
  • Difficulty category 2 – 20,000 pounds (about 23,200 euros).
  • Difficulty category 3 – 30,000 pounds (about 34,800 euros).
In addition, each company must adhere to all established requirements. Otherwise, the license may be canceled without the right to refund.

FAQ

Yes. Companies that plan to conduct cryptocurrency activities can obtain a corresponding license (DLT) after thoroughly checking their activities.

Before applying for a local license, the company must register its activities in Gibraltar, have an offline office and staff of two people, present a detailed business plan, and confirm compliance with other standards of the licensing authority.

Yes. There are no additional requirements regarding nationality and position in the Law.

The license is issued for one year with the possibility of renewal an unlimited number of times.

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