Cryptocurrency regulation in Gibraltar

Over the past few decades, Gibraltar has been a popular jurisdiction for developing the fintech industry and IT. It is mainly because crypto regulations in Gibraltar set meager taxes. In addition, there are no complicated requirements for those who want to get a license. If you wish to obtain a work permit in this jurisdiction, you should seek the help of professional lawyers. They will tell you how suitable this country is for licensing, taking into account the characteristics of your company and what advantages you get.

How to open a cryptocurrency company in Gibraltar?

If you have chosen this jurisdiction to conduct your business, you will not have any particular problems. Since the country’s government is interested in developing blockchain projects, this sets the most simple regulation rules.

First, you must register an organization in this jurisdiction or buy a ready-made company. You need to think carefully about the name of the company, and it must be unique. We advise you to come up with several options, check their uniqueness, and only after that stop at one name.

You also need to determine the legal form, draw up a business plan, and collect the necessary package of documents. Particular attention must be paid to the choice of services you will provide and the development of software. Registering an organization here takes only a few days.

With a crypto license, your company can carry out the following activities:

  • blockchain-based trading platforms, which are designed to facilitate the sale and purchase of goods or services;
  • crypto wallets;
  • asset custody services.

It is worth saying that if you refuse to obtain a license, your company will be recognized as a fraud and will not be able to operate in this territory.

You also need to open an account at a local bank, which often causes problems. Many crypto organizations get rejected because banks consider this business very risky. If you want to avoid having problems with this, you should seek the help of specialists.

Many organizations choose this particular jurisdiction due to the lowest tax rate in Europe – only 10%, while many income types are not taxed. It was because many organizations are registered here today that want to obtain a cryptocurrency license in Gibraltar.

Crypto regulations

Company categories

Crypto regulations distinguish 3 main categories of organizations:

  • 1 – simple blockchain projects;
  • 2 – ICO projects;
  • 3 – crypto exchangers and exchanges.

As you can see, the choice of a category depends on your company’s activities. If you have a small startup that uses blockchain technology, you fall under the first category, and if you have a significant exchange, you are under the third.

The amount of the fee depends on the category. Suppose you need help understanding which type your company belongs to. In that case, we advise you to seek help from lawyers who will answer all questions and suggest what you need to pay attention to, taking into account the characteristics of your organization.

After you open your company, you need to get a work permit.

The process of obtaining a license

Obtaining a license is more complex than registering a company. It breaks down into 3 main steps:

  • Pre-application engagement;
  • Full application;
  • Application considerations and decision-making.

Each step is needed to test different aspects of your organization’s work. Passing an audit with the regulatory authorities is a mandatory procedure. It allows you to determine the project budget better and capital requirements and check the readiness to combat money laundering. Once the performance review is over, regulators want to ensure you’re willing to work honestly and openly.

The entire licensing process takes 4 to 6 months. If regulators notice any problems or shortcomings, they can return your company for revision. To avoid such issues, we advise you to immediately contact our lawyers, who will supervise obtaining a license, help with paperwork and monitor how your organization meets all the requirements of the regulator.

Requirements for a virtual currency company in Gibraltar

As already mentioned, this jurisdiction does not impose complex requirements for crypto organizations that want to obtain a work permit here. If you head to work honestly and openly, there will be no problems.

Among the main requirements are the following:

  • a good level of security for your software;
  • have a contingency plan;
  • risk assessment;
  • effective corporate governance;
  • high level of attention to the interests of clients and partners.

The government of this jurisdiction understands that the crypto business is associated with many risks. Therefore it wants to ensure that customers’ interests are protected in any case, no matter what challenges your company faces.

If you install a sound security system for personal data and financial assets, then there should be no problems with licensing or work in the future.

Also, you should think carefully about the organization’s business model and management system. People must fill critical positions with relevant work experience, a good education, and an understanding of how your project should function.

This jurisdiction is suitable for both large corporations and small startups. It is due to the absence of requirements for the authorized capital and the number of shareholders. Gibraltar’s cryptocurrency regulation is interested in developing small and medium businesses. Therefore it does not establish rules that can hinder their growth.

Taxation of Cryptocurrency Activities in Gibraltar

This jurisdiction is famous for setting the most simple rules of taxation. Thus, each registered organization must pay a corporate tax of 10% (this rate is the lowest in Europe). In addition, you do not have to pay taxes on dividends.

In addition, once a year, companies must pay specific contributions, the amount of which depends on the category. Please contact our specialists if you want more about taxation in this jurisdiction. They will do the necessary calculations and tell you. How much tax do you need to pay, given the size of your company?

Regulation of Cryptocurrency Activities in Gibraltar

If you want to work legally in this jurisdiction, obtaining a cryptolicense is a must. Otherwise, your platform will be blocked, and the owner may have big problems.

Cryptocurrency in Gibraltar is regulated by the GFSC and Innovate and Create Team. Each of these state bodies is responsible for its scope of work. So, DFSC issues licenses and monitors the functioning of companies that have received a work permit here, and Innovate and Create Team monitors the implementation of new crypto-economic projects.

If you want to understand better the features of the regulation of the crypto industry, you can ask our specialists possible questions.

Advantages and disadvantages of this jurisdiction

The work of Gibraltar crypto, like in any other jurisdiction, has advantages and disadvantages. Among the most important benefits are:

  • favorable tax system;
  • transparent regulation;
  • individual approach to each project by the regulator;
  • excellent reputation.

Because the license in this jurisdiction is prestigious, you can easily attract new investors and increase your client base.

However, this jurisdiction has several disadvantages. Firstly, your company must have resident specialists, and you need to open an office here, which is sometimes tricky. Secondly, Gibraltar is part of the UK, so it is no longer a member of the EU. In addition, the cost of obtaining a license in this jurisdiction is higher compared to Estonia or Lithuania.

Conclusion

This jurisdiction will be an excellent solution if you want to avoid spending the lion’s share of your income on taxes. There is favorable taxation here, making the territory attractive for the IT and fintech industries. It also does not set large requirements for applicants. However, obtaining a work permit here can be difficult, so we advise you to seek help from our specialists.

FAQ

Yes, but the tax system here is much softer than in other countries. Corporate income tax is only 10%, and dividends are not taxed.

The Financial Services Commission (GFSC) regulates the crypto industry in this jurisdiction. If you want to know more about functioning crypto organizations’ rules and requirements, we advise you to contact our specialists for help.

Yes, you can pay for goods or services with cryptocurrencies, provided that the seller is not against this asset. There are no restrictions on payment by such assets.