The attitude towards the crypto industry is very different in different countries. The UK government has managed to appreciate all the benefits of using blockchain technology, so all kinds contribute to the development of this industry. Crypto license in the UK is advisory, so many companies are limited to simply registering and paying taxes. But practice shows that a company can achieve great results with a work permit.
London is considered to be one of the blockchain capitals of the world. Every year, the most significant number of large and small events dedicated to this topic occurs here, contributing to the crypto industry’s development. In many ways, this was made possible thanks to very soft crypto regulations in Britain. Local authorities are interested in the fact that this industry develops and brings a stable income to the budget. Today we want to discuss how cryptocurrencies are regulated in this jurisdiction and pay special attention to taxation.
As already mentioned, the UK’s crypto exchange license is advisory. The country’s government has created the Innovation Hub platform, where various companies and crypto enthusiasts can receive legal support, but registration here is advisory.
However, if you want to work legally, you need to register your company and be sure to pay taxes.
Why do companies seek a work permit if having a license is a recommendation? There are several reasons for this. First, the heads of such companies understand that the legal situation can change at any time. If the state authorities say that every company must obtain a license without fail, this will significantly burden the state bodies.
In addition, the cryptocurrency exchange UK has an excellent reputation. So, a company that has received a work permit here is more prestigious. The level of trust in such organizations is much higher, which is very convenient when looking for investors and new clients.
Obtaining a work permit in this jurisdiction is much easier than in other countries, but it makes it possible to work in the UK and other jurisdictions.
Thus, if you want to work legally and successfully develop and attract new investments, you have to obtain a crypto license in Britain.
Your organization must register with the FCA to operate legally in this jurisdiction. Organizations engaged in exchanging Britain crypto assets for fiat or other crypto assets, maintenance of crypto ATMs, or profit from the storage of crypto assets are subject to registration.
To obtain a work permit, you need to pay a state fee (the amount depends on the authorized capital of the organization), open a bank account, and collect the necessary package of documents.
Next, you need to submit an appropriate application. Crypto regulations have 6 months to consider your application, but if you provide an incomplete package of papers, this period can be extended up to 12 months.
The FCA controls cryptocurrency activity in this jurisdiction. Government agencies generally only seek to regulate some aspects of crypto activities. Still, it prohibits using this asset for illegal activities (fraud, money laundering, or financial terrorism).
The government of this jurisdiction is interested in the development of this industry. However, it makes sure that the financial assets of users are safe.
If you want to open an organization that works with cryptocurrency Britain, you must go through several necessary steps. To begin with, you need to think carefully about all aspects of your company, develop a suitable business model, think over ways to finance, and much more. The better you think through all aspects, and the more successful your business will be. In addition, you need to create software that will carry out transactions or store customer assets. Here, special attention should be paid to compliance with the rules on combating money laundering and financial terrorism.
Your customers must provide identification documents, and the system must double-check all the data. You cannot discuss people who have previously been involved in fraud.
It would be best if you also chose a unique name. Please select several options and double-check them for uniqueness.
It would help if you opened a physical office. Key personnel such as directors and anti-money laundering specialists should work here. It is worth saying that special attention should be paid to the selection of personnel; all team members should not have a criminal record. Still, they should have experience in relevant positions and specialized education.
You also need to collect the necessary documents and check how your organization meets all the requirements; after that, you can apply for a cryptocurrency license in Britain.
If you want to open a company with partial liability, you need to go through the following main steps:
Please learn in advance about the rules for regulating cryptocurrencies in this industry and create a company with them in mind.
In 2021, the state authorities of this country created a precisely simple and understandable rule for the taxation of legal entities and individuals involved in the crypto business. Organizations that are engaged in taxation are subject to the following:
Such organizations are forced to pay the following taxes:
If you find it challenging to understand all aspects of taxation on your own, you can seek help from our specialists. They will study your organization’s activities and tell you what taxes and how much you are required to pay.
Calculating income tax is difficult. You need to calculate how much profit your company received and subtract the following expenses:
If your organization incurs losses, you must report them to the regulators.
An online marketing service for selling goods or services is a digital activity subject to taxation. An exchange whose purpose is to facilitate the sale of cryptocurrencies is taxed.
The exchange of crypto assets is not subject to VAT, which makes trading as simple as possible. Mining is also not subject to these taxes. However, you must pay this tax to purchase goods and services using such assets.
You need to meet certain requirements to obtain a cryptocurrency exchange license in the UK. As already mentioned, this jurisdiction does not set complex requirements for crypto organizations:
This jurisdiction does not impose requirements for the authorized capital. It allows both large companies and small startups to work here. However, large and small companies must comply with KYC policies and combat money laundering and financial terrorism. Before obtaining a license, you must develop anti-fraud mechanisms.
All crypto organizations are required to provide regular reports on their activities. Also, large organizations must undergo an annual audit. Government agencies scrutinize the actions of crypto firms to ensure that your organization is not being used for fraud or money laundering. All records must be kept for 6 years.
However, a number of organizations are not subject to audit. Usually, these include small firms with few employees and authorized capital. To learn more about corporate reporting, you can contact our specialists.
There are several business entities in this jurisdiction, but crypto entities refer to:
The type of entrepreneurial entity choice depends on your business model’s characteristics, equity availability, and many other aspects. Our experts will study your organization’s activities and suggest which type is best for you, considering local legislation.
You can quickly get a crypto exchange license in the UK if you are willing to work honestly and openly. This jurisdiction does not impose complex requirements on organizations, but it must comply with the KYC policy and ensure the safety of clients’ assets.
Thus, obtaining a work permit is very high if you use software that protects financial assets and clients’ data.
Why study securities law? The government of this jurisdiction has divided all tokens into 3 large groups:
Thus, if you are using tokens with securities properties, you need to understand how this market works in the UK. It is worth saying that the government of this country is interested in developing this market. Therefore it establishes straightforward and understandable regulation rules. You will not have any particular problems with selling or purchasing tokens with the properties of securities. If you use such assets, we advise you to seek the help of our company’s lawyers to understand what problems you may encounter and how best to organize the work.
Today you can get 2 types of crypto licenses – exchange and wallets. They need to be discussed in more detail.
Every company or private specialist engaged in crypto asset exchange must obtain a work permit. It includes organizations that exchange crypto for crypto or crypto for fiat. Also, this type of license must be received by operators of equipment management that perform the exchange of assets automatically.
It would be best if you got a license for crypto wallets to profit from holding crypto assets. This category includes firms or private practices that keep users’ financial assets and encrypted private keys.
Obtaining a crypto license is a rather lengthy process, which takes an average of 3 months to six months. It is because you have to go through several rather complicated but very important steps:
In addition, you need to prepare a paccage of documents that includes all the provisions of the company’s work, from a business plan to a risk assessment. It is worth saying that the preparation of documents must be approached very responsibly, so it makes sense to seek help from the lawyers of our company immediately. They will help you complete the necessary paperwork, check the availability of the essential documents, and how correctly they are executed.
If all the documents are in order, you can get a license quickly, and there will be no big problems with this. But, if the state authorities find errors, they can return them for revision. If you want a license to be as easy and fast as possible, it makes sense to seek the help of qualified lawyers.
Obtaining a cryptolicense here is advisory, but all crypto organizations must undergo mandatory registration and pay taxes regularly. However, many organizations choose to get a work permit as there are many benefits.
First, Britain’s cryptocurrency regulation can change at any time. Now there is talk that there is a need to make licensing mandatory and that there is a need for more laws to better protect users from possible fraud or money laundering.
Secondly, obtaining a work permit in this jurisdiction is simple, but it makes it possible to work in many jurisdictions. It allows you to enter new markets and actively develop.
Thirdly, having a license is the primary proof that a crypto organization is ready to work honestly and openly, so it will be much easier for you to attract new customers and investors.
In addition, this jurisdiction has the most favorable taxation rules. The corporate tax rate here is one of the lowest among European countries, so that you can invest your profits in business development.
Thus, obtaining a work permit in this jurisdiction has many advantages; it will enable your business to thrive.
CryptoLicense is a company that provides legal services and assistance in obtaining a crypto license. Thus, our services include the following:
We provide services for obtaining a crypto license and in the following jurisdictions:
Crypto license UK
In the first stage, our experts study your company’s activities and provide a full consultation, so you should be prepared because this will take a lot of time. Then, fruitful work begins to create the necessary documents and improve your company to meet the requirements of regulators.
You can create a power of attorney for our specialists, who will then conduct business on your behalf. This will simplify your work as much as possible, so your participation in this will be minimal. So, our specialists will be able to represent your interests in government bodies, help you find an office and provide other services.
Interest in cryptocurrencies in this country is very high, so many companies tend to work in this jurisdiction. If you want your business to thrive, it makes sense to get a license. To simplify the process of obtaining a permit, you should contact the specialists of our company. It will help keep your involvement in the process to a minimum.
Yes, you can legally use crypto licenses as a payment method for mining or trading. Currently, this jurisdiction has pretty simple and understandable rules for regulating this industry.
No, having a license is a recommendation, but you must be registered and pay taxes.
Yes, companies that profit from the use of crypto assets are required to pay taxes. We talked about tax rates a little higher.
Senior Partner, Lawyer
Senior Partner, Lawyer