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Crypto Regulation in Slovakia

Slovakia is one of the European countries that encourages crypto-currency activities. However, the country has strict rules regarding the circulation of digital currency to avoid money laundering and sponsorship of terrorism. The main body that controls and regulates the cryptocurrency niche is the Financial Intelligence Unit. The Authority has developed and implemented strict controls on cryptocurrency Slovakia transactions. Also, this state body issues licenses for exchanging and storing cryptocurrencies. However, the company must comply with strict regulations. If a company fails to comply with Slovak law, the Financial Intelligence Unit may close a bank account and seize money accounts. Local law enforcement agencies can access information about companies conducting cryptocurrency transactions. Also, the emphasis is traditionally placed on the process of combating money laundering and the financing of terrorism. In this review, you will learn more about the legal regulation of a crypto business in Slovakia, how to obtaining a cryptolicense, and register a company.

Cryptocurrency Legislation in Slovakia

In Slovakia, cryptocurrency is regulated by EU law, so a license is required mainly to comply with AML/CFT requirements. Although the national authorities have recognized the importance of innovative technologies and even shed light on the taxation of cryptocurrencies, they are currently advocating a liberal approach to the regulation of cryptocurrencies, meaning that the comprehensive regulatory framework for crypto activities will not be fully implemented any time soon. Despite the lack of law, the jurisdiction of Slovakia has many advantages for crypto business in the European jurisdiction. If you want to benefit from low company formation costs, a competitive and business-friendly tax regime, nominee director and shareholder services, no restrictions on foreign ownership and employees, and the highest levels of productivity in Central and Eastern Europe, read on. learn how to become a licensed crypto business in Slovakia.

Formation of a Slovakia Crypto Company

You must have a local company providing cryptocurrency services to obtain a license for a crypto exchange in Slovakia. The minimum amount of the company’s authorized capital is 5,000 euros (the amount must be paid immediately upon registration). In addition, it is required to appoint a director with EU or Slovakian citizenship and develop and submit a business plan. All cryptocurrency businesses are subject to verification and identification. Such requirements came from the EU, which Slovakia has implemented in state rules and Slovakiacryptocurrency regulation. Anti-money laundering (AML) laws and KYC regulations apply to cryptocurrency service providers through the regulatory and licensing process. In addition, all regulators have access to corporate information.

How to Get a Crypto License in Slovakia

Crypto finance
There are two options for a cryptocurrency license in Slovakia. You can obtain a permit to provide e-wallet services and a license to exchange cryptocurrencies. In both cases, it is necessary to register a local crypto company. This legal entity is also required to have a realistic business plan. At a minimum, to register a local company, it is necessary to collect and form the following package of documents:
  • Passports of the beneficiaries and directors of the company.
  • Proof of residence (such as local government registration or utility bill).
  • Three options for the desired name for the company.
  • Power of attorney.
  • Certificate of no criminal record.
  • Diploma of secondary education. If the document was issued abroad, the owner must go through the nostrification procedure in advance (which may take 8-12 weeks).
Steps to obtain a license to exchange cryptocurrencies in Slovakia:
  1. Register a company in Slovakia.
  2. Get a local address and a local manager.
  3. Fill out an application at the Trade Licensing Bureau.
  4. Get a trade agreement.
  5. After: preparation of AML policies and internal KYC processes.
  6. Start managing your crypto company.
Required documents:
  • Statement.
  • Charter and other corporate documents.
  • Proof of premises for registered office in Slovakia (virtual office allowed).
  • Confirmation of the permanent residence of the founders and managers of the company.
  • Confirm relevant professional competence to enable the founders and senior management to carry out activities with cryptocurrencies.
  • Certificates issued by the Prosecutor General’s Office (or authorities of the country of origin) that the founders and senior management have not been prosecuted for economic crimes or other crimes related to the proposed economic activity (should not be issued earlier than 90 days later).

Benefits of a Crypto License in Slovakia

Demand creates supply. There are increasing cryptocurrency companies, and Slovakia’s jurisdiction has significant advantages. Slovakia can offer many benefits for crypto companies, despite the strict restrictions that the government and the control of regulations impose. Among the benefits, first of all, it is necessary to note the following:
  • Company executives and shareholders are not required to be citizens of Slovakia.
  • There are no restrictions on the movement of capital and income;
  • There are no currency control restrictions;
  • The company may employ foreign workers.
  • It is allowed to use the services of nominee directors and shareholders.

Cryptocurrency Rules for Business in Slovakia

As you may have noticed above, Slovakia has a Financial Intelligence Service responsible for ensuring that companies comply with all rules and crypto regulations. For violation of all the rules of established laws, companies’ accounts can be blocked and the license canceled. To avoid this, it is necessary to understand the basic requirements of local legislation:

  • All companies must develop and implement procedures to manage the risks associated with money laundering and terrorist financing.
  • All personnel must be screened as well as preparatory briefings to identify potential risks.
  • The company must apply the CMC policy for customer identification and verification.
  • The company must keep records and monitor all transactions. Suspicious transactions related to digital currency should be investigated further.
  • Adhere to the provisions of Law No. 297/2008 on preventing the legalization of proceeds from crime.
  • Report all suspicious customer activity.

The Financial Intelligence Service can request the reports necessary to verify customer data and transaction information.

Accounting and Auditing Requirements

In Slovakia, a Law from 2018 sets the rules for crypto-currency companies. First of all, this applies to reporting. For example, one of the obligations is the conversion of virtual currencies into euros on the reporting day. On the evaluation day, the average market price of the digital currency should also be monitored, and the actual value of the crypto coins should be indicated. In the reporting period, only the true value of virtual currencies should be displayed. In the same law, there are a few clarifying questions about mining. For example, all cryptocurrencies mined through mining must be out of the general balance until they are sold or exchanged.

The Accounting Act also determines which companies are required to audit their financial activities. An audit is mandatory if the company’s total assets exceed 1 million euros or the net turnover exceeds 2 million euros. Suppose you are delighted with the local legislation and regulations regarding cryptocurrencies. In that case, you can seek the help of professionals for other company registration and license of crypto activities in Slovakia.

Create a Crypto Company in Slovakia

To obtain a cryptocurrency license in Slovakia, you must first set up a local company regulated by the Commercial Code. There are no citizenship requirements, and foreigners are subject to the same rules and are entitled to the same benefits as Slovak citizens. One of the most common organizational and legal forms is a private limited company, which can be created within 3-4 weeks, provided all the necessary documentation is prepared in advance.

Types of Business Entities in Slovakia

To register activities in the territory of Slovakia, any crypto-entrepreneur can choose the preferred type of business structure. The Joint Stock Company and the Private Limited Liability Company are the most popular types of entrepreneurial activity. These business models are ideal for predominantly high-risk crypto activities. In this case, the obligations of shareholders are limited to their contributions, which are registered in the authorized capital. Registration of both forms of activity is carried out with the standard procedure described above in this review. All reports related to the company are submitted to the State Register of Financial Reporting, which is responsible for providing documents for the collection of documents.

Private limited company (SRO)

A limited liability company is often chosen to set up a small or medium-sized business. In this case, the requirements for the authorized capital are relatively low, and the corporate rules are not as strict as for the Joint Stock Company. The company name must be unique. The maximum number of shareholders is 50 people. The starting authorized capital must be at least 5,000 euros. Each shareholder must contribute at least 750 euros. The company director may reside in Slovakia or the EU but not outside. The company is required to have a bank account in Slovakia, as well as to establish a supervisory and executive board to control activities.

Joint Stock Company (AS)

This business structure is more suitable for large-scale companies with significant start-up capital. Capital and regulatory requirements are significantly higher than a private limited company (SRO). In this case, the contributions of each shareholder are fixed in the form of shares of a specific nominal value. The claim’s size determines the shareholder’s rights to participate in the company’s management processes. The higher the value of the share, the greater the influence of the shareholder. Claims can be sold. The company name must contain the abbreviation Akc. The minimum authorized capital is 25,000 euros. The company’s director must be a citizen of one of the EU countries or have a residence permit in Slovakia. There are no citizenship requirements for shareholders. The total nominal value of the shares must equal the authorized capital. Shares and bonds of the company can be sold or transferred by each shareholder at their will.

Taxation of cryptocurrencies in Slovakia

Crypto companies can only operate legally. This means that any activity is subject to taxation. Initially, a crypto company must be registered with the tax office. The tax year in Slovakia is equal to the calendar year. The standard tax rate is shown below:
  • Corporate income tax – 21%
  • Value Added Tax – 20%
  • Withholding tax – 0%-35%
  • Social insurance contributions – 25.2%
  • Subsidies for health insurance – 10%
If you are planning to create a cryptocurrency company, but are afraid of a complex registration and legalization scheme, then we advise you to seek professional help. Legal companies will help you quickly create a company and provide detailed advice on any issue of interest to you.

FAQ

Yes. All crypto companies must register their activities with the tax office and pay income tax and other fees.

Yes. Slovakia does not hinder the development of cryptocurrency companies. However, it imposes strict measures to control the activities of such companies.

Yes. Coinbase allows you to sell, buy and exchange cryptocurrencies securely and securely. Coinbase is available in over 100 countries around the world, including Slovakia.

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