Crypto License in Ireland

Cryptocurrency Licence in Ireland

One of the most favourable locations for establishing a crypto business within the EU is Ireland. Coinbase and Gemini are among some of the major names in the digital currency industry. As an EU gateway to crypto trading, Ireland offers reasonable conditions for obtaining a cryptocurrency license, so cryptocurrencies are widely supported on a national level.

When it comes to comparing cryptocurrency with traditional currencies, it is imperative to note that whereas fiat (or traditional) currencies also exist in digital format, crypto exists only digitally. The term “virtual asset” is also commonly used to refer to cryptocurrencies. As a physical asset, a virtual asset is anything that can be traded digitally, transferred or used for investment or payment purposes. Fiat currencies are not represented digitally.

Regulatory distinctions are also evident, as both areas of financial activity have very different requirements for establishment and licensing.

 

Ireland crypto license

COST OF CRYPTOCURRENCY LICENSE

PACKAGE «COMPANY & CRYPTO LICENSE IN IRELAND»

THE PACKAGE OF «THE COMPANY AND CRYPTO LICENSE IN IRELAND» INCLUDES:
  • Preparation of business plan, company management structure and other financial documents
  • Company formation in Ireland
  • Submission of registration forms to the CBI
  • Application for authorization with the CBI
  • Communication with regulatory authority during the application phase
  • Legal documents – AML, KYC, IT/Security policies, etc.
  • Appointment of the necessary staff
  • Bank account opening

Financial services licenses and cryptocurrency regulation in Ireland

A Virtual Asset Service Provider (VASP) in Ireland is a company that offers exchanges between crypto currencies or between crypto and fiat currencies. A cryptocurrency license is required for companies that trade virtual assets. A VASP conducting business in Ireland is considered a “designated person” according to the legislation. AML and CFT networks regulate them, so they must follow their rules.

It is the Central Bank of Ireland which handles licensing procedures, issues cryptocurrency licenses (or denies applications) and controls licensed financial service providers in Ireland. The agency issues authorizations rather than licenses in a traditional sense. Among the operations that can be performed under such an authorization are:

  • Fiat currencies and virtual assets exchanged
  • Virtual asset trading involves one or more types of assets
  • An individual transfers virtual assets on behalf of another (also called a client, user, or customer of a financial services provider) from one address or account to another.
  • Storage wallet hosting and maintenance
  • Issuing or selling virtual assets as part of their financial services.

Advantages

Cryptocurrency licences obtained in large numbers

Set up your company quickly, easily, and cheaply

Taxation with a low income tax rate that is advantageous

Residency in Ireland is possible

FORMAL REQUIREMENTS FOR OBTAINING A CRYPTOCURRENCY license IN IRELAND

The Central Bank will be responsible for registering applicants for AML/CFT. VASP’s AML/CFT registration application must be approved by the Central Bank after the Central Bank verifies:

  • AML/TF risks associated with the company’s business model are effectively addressed by the company’s anti-money laundering/counterfinancing of terrorism policies and procedures.
  • It is appropriate and correct for the company to have a competent management team and beneficial owners.

AML/CFT compliance is required to be met by SAPs in accordance with DSS 2010-2021, Part 4. The following are among them:

  • Assessing their business’ ML/TF risks
  • For their customers, they conduct Customer Due Diligence (CDD)
  • Clients’ operations are monitored on an ongoing basis
  • When money laundering or terrorist financing is suspected or known, suspicious transaction reports are sent to the Financial Intelligence Unit of Ireland and the Revenue Commissioner
  • Policy and procedure development and implementation for anti-money laundering/counterterrorism financing
  • Relevant documents should be retained
  • A continuous anti-money laundering/counterfinancing of terrorism training program for all employees.

Senior VASP employees must meet additional formal requirements. In spite of the fact that the Central Bank has not expressed any expectations on the locations of the directors of the applicant companies, the territoriality principle enshrined in the EU anti-money laundering directives and section 25 of the CJA2010 still applies. In order to qualify for a Central Bank loan, the claimant firm must be physically located in Ireland. To act as a contact person with the Central Bank, there should also be at least one senior executive based in Ireland.

To ensure registration of applicants who meet these requirements, the Central Bank uses a robust, structured, and risk-based process. Each registration application will be processed as expeditiously as possible, fulfilling the Central Bank’s responsibility to act as a strict and effective regulator.

Origin and scope of activity requirements

For anti-money laundering/terrorist financing purposes, all SAPs established in Ireland must be registered with the Central Bank.

The Central Bank requires all companies providing financial services, related to virtual assets, from Ireland that are not established in Ireland or do not operate as CSSA immediately prior to the entry into force of the 2021 Act to register with the Central Bank.

In order to apply for registration with the Central Bank, VASPs operating in Ireland prior to the 2021 Act have three months.

In order for a company to conduct business as VASP, it must register with the Central Bank if it is currently authorized for prudential and/or business services by the Central Bank.

As part of its commitment to ensure the strict and effective discharge of its functions, the Central Bank will process every application for registration as quickly as possible.

Formalities involved in establishing a financial services company in Ireland

This jurisdiction allows registration of private limited companies. Shareholders will only be liable for the amount they invested if they choose this option.

The following steps are involved in setting up a business in Ireland:

  • Analyzing how a crypto company in Ireland will carry out transactions
  • The company’s name must be selected and verified
  • Identifying a company’s legal address
  • The collection and presentation of relevant information about the founders, beneficiaries, and managers of the company
  • Documents related to constituents and registration are drafted and executed
  • Getting registered and preparing for it
  • Establishing a settlement account
  • Obtaining the central bank’s authorization for the financial transaction in accordance with the type of transaction intended.

Each authorization procedure will be determined on a case-by-case basis and may differ from the one described above.

VASP authorization: preparing for success

An applicant should ensure that the following criteria are aligned with regulatory requirements before submitting a VASP AML/CFT registration form:

  • CJA 2010 to 2021 specifies the types of services that will be offered as VASP services
  • There will be no failures or disruptions in the company’s compliance with its AML/CFT obligations under the CJA 2010 to 2021
  • The Central Bank of Ireland has provided the company with the possibility of conducting a VASP activity.

Forms and documentation required for VASP authorization applications

Applications for authorization must include the following registration forms in order to be considered successful:

  • This form includes specific information and documentation required for registration with VASP AML/CFT.
  • Each legal entity or other type of legal entity that is the beneficial owner in VASP must submit an application.
  • Every individual who is a beneficial owner of the Applicant VASP must fill out an application. A fitness and integrity questionnaire must also be completed by all relevant persons who will be asked to perform pre-approval monitoring functions. The Central Bank encourages all persons concerned to submit their questionnaires electronically through its MSA system. Before submitting an individual questionnaire, applicants should review the Central Bank’s 2018 Standards of Fitness and Integrity Guidelines.

Crypto regulation in Ireland overview

Period for consideration
9 months Annual fee for supervision No
State fee for application
50 EUR Local staff member Required
Required share capital from 25,000 EUR Physical office Required
Corporate income tax 12.5% Accounting audit Required

BENEFITS OF OBTAINING A CRYPTOCURRENCY license IN IRELAND

Ireland, a member of the European Union that embraces technological advancements, offers a favourable and profitable environment for working with crypto assets.

A company can be formed in Ireland relatively quickly and easily from a regulatory perspective. The establishment process takes approximately two weeks, and the founders do not have to be present in person during the process.

This results in a high success rate, which can be seen from the fact that many successful global companies have chosen Ireland as their legal base for their operations. There is also a unique business environment created by the presence of so many financial service providers in one place, which provides both a self-sufficient ecosystem and good regulatory response. The recent “Ireland for Finance” campaign for the international financial services industry is one example of this. In short, it predicts an increase in structural and governmental support to the fintech sector, outlining ambitious growth targets and positioning Ireland and Dublin as the leading Financial Services hub.

When it comes to opening and operating a business in the finance industry, Ireland offers an advantageous taxation system, offering a relatively low tax rate of 12.5%. Aside from tax credits, Ireland offers financial support for research and development through IDA Ireland’s funds. In addition, holders of a cryptocurrency license issued in Ireland are eligible for passports to other member states of the European Economic Area. Other EEA states do not require licenses from licensed virtual asset service providers to conduct business in their countries.

THE APPLICATION PROCESS

Compared to obtaining a financial services license, the application process for a VASP permit (cryptocurrency license) is quite straightforward. The process consists of the following steps:

  • In order to pre-register, the applicant must provide the Central Bank with the VASP form.
  • In addition to providing the institution number and reporting date, the Central Bank sends the applicant an e-mail with information on how to access and submit the VASP AML/CFT registration form.
  • ONR receives the VASP AML/CFT registration form and all supporting documentation from the applicant.
  • A confirmation e-mail is sent to the applicant company by the Central Bank acknowledging receipt of the VASP registration application.
  • Upon evaluating the application for VASP registration, the Central Bank notifies the applicant firm by e-mail whether all the necessary information and documentation has been submitted.
  • The Central Bank evaluates the registration application if all the necessary information and documentation are provided. An applicant may be requested to provide additional information or clarification if necessary by the Central Bank.
  • A request for additional information or clarification from the Central Bank may be responded to by the applicant.
  • Upon receiving additional information from the applicant, the Central Bank evaluates it and informs the applicant about its assessment and subsequent steps. If any issues arise at this stage of the process, the applicant may have a chance to address them.
  • When the Central Bank decides whether to grant or deny registration, it will notify the applicant.

The appointment of senior individuals

Persons in senior positions must comply with the Fitness and Probity Regime, which is a component of the application for VASP authorization (cryptocurrency license). A regulated financial service provider (RFSP) has two types of controlled functions: Controlled Functions (CFs) and Pre-Approval Controlled Functions (PCFs).

CFs are a subset of PCFs, and appointment to a PCF role requires the approval of the Central Bank. An individual performing a CF must have the fitness and probity required to perform the function appropriately.

A Control Function (CF) does not have to be performed within the State, as stated in the Central Bank’s Guidance on Fitness and Probity Standards 2018. Thus, the Central Bank Reform Act 2010 applies to those performing CFs for regulated financial service providers authorised, licensed or registered in the State but located outside of the State.

Persons must not be permitted to perform CFs unless they:

  • Based on reasonable grounds, the firm believes the person meets the Central Bank’s standards of fitness and probity
  • In addition, the person has agreed to adhere to the Central Bank’s standards of fitness and probity.

A VASP’s managers and beneficiaries must, in any case, be reputable.

AUDITS AND REGULATORY ENFORCEMENT

The Central Bank implements a graduated approach to AML/CFT supervision. This means that higher intensity and intrusive supervisory measures (e.g., onsite inspections and review meetings) are used to monitor firms that present a higher risk of ML/TF. Other less intensive supervisory measures such as AML/CFT Risk Evaluation Questionnaires and outreach activities (e.g., presentations and seminars) are also used as part of the Central Bank’s AML/CFT supervisory programme.

CRYPTOCURRENCY TAX SCHEME IN IRELAND

In contrast to companies preparing their accounts in a currency other than euro, crypto companies cannot. For tax purposes, VASPs that are authorized by The Central Bank of Ireland or by the Irish Government must prepare their accounts in euro or another functional currency.

Tax payers’ income related to crypto trading is subject to capital gains tax at a rate of 33% at the time of the tax filing. In contrast, capital gains can be offset by losses. A 12,5% tax rate will be applied to chargeable gains made by corporations.

The VAT taxation of bitcoins and other crypto currencies deems them to be “negotiable instruments”. Bitcoins are therefore VAT-free. Therefore, those engaging in cryptocurrency exchange will not be taxed.

Employees who are paid in bitcoin must have the amount converted to euro at the time of payment to calculate their income tax. Tax systems in Ireland are still developing their understanding of the territoriality of cryptocurrencies. Cryptocurrency traders who are Irish residents will generally be subject to Irish taxation on their worldwide income and gains. Income or gains derived from Irish sources, or profits from Irish trades, will generally be subject to tax for non-residents. Read more about Ireland crypto tax.

 

Our company offers assistance in opening a company in Ireland and obtaining a cryptocurrency license. Working hand in hand with our clients to navigate the administrative side of their business with confidence, we provide legal guidance and ensure strong preparation for business and licensing applications.

FREQUENTLY ASKED QUESTIONS

  • Are crypto activities licensed in Ireland?
    That's right. Ireland's crypto license is known as the Crypto Asset Services Provider (VASP) license.
  • What is the process for getting a crypto license in Ireland?
    In Ireland, crypto licenses are issued by the Central Bank of Ireland. Upon receiving applications for VASP licensure, it evaluates those applications, grants or denies them, and then supervises the VASPs after they have been licensed.
  • In Ireland, what activities are carried out under the crypto license?
    Licensed VASPs in Ireland are allowed to provide a wide range of services, including:
    • Transact with fiat money (and vice versa) by exchanging virtual assets
    • Invest in virtual assets by carrying out trades
    • The act of transferring virtual assets from one address or account to another on behalf of another person.
    • Services related to storage wallets
    • Provide virtual asset issuance and/or sale-related financial services
  • The process of getting a license takes how long?
    It is estimated that the process of gathering and reviewing the necessary application documents will take 9 months. The process may take longer if the Central Bank of Ireland issues additional requests for information or documentation.
  • A crypto company can be owned by a non-resident of Ireland?
    That's right. It is, however, mandatory that the owner of the business is a resident of a country in the European Economic Area (EEA) or Switzerland.
  • Do Irish crypto companies allow non-residents to join their boards?
    That's right. A resident of one of the EEA member states is required as a director.
  • Can you obtain a license without having a bank account?
    That's right. For any financial transactions, a bank account should be used in conjunction with incorporation in Ireland.
  • In order to provide virtual currency services, what is the minimum authorized capital?
    According to Irish law, VASPs must have a minimum authorized capital based on their type of registration. The choice of entity type is up to the business owner, and there are no specific requirements or restrictions.
  • Are crypto currencies accepted as a means of depositing authorized capital?
    That's right. Cryptocurrencies are regulated and accepted by the Irish legislative system. Due to this, investors wishing to establish a company in Ireland may use Bitcoins, Ethereums, or Irishcoins to conduct transactions.
  • In order to open an Irish company and obtain a crypto-license, when do you need to deposit capital?
    VASPs are formed differently depending on the type of entity they are registered as. It is important to note that minimum authorized capital is a formal requirement only for certain types of corporations. Therefore, this step ultimately depends on the decision made by the company owner.
  • For a crypto company to apply for a cryptographic license in Ireland, what do they need to do?
    Applicants must meet two core requirements in order to be considered for licensure:
    • Anti-money laundering policies must be implemented by the company, as well as the ability to comply with them;
    • It is imperative that the company's managers and beneficiaries maintain an impeccable reputation.
  • What are the benefits of getting a crypto license in Ireland?
    There are multiple reasons why Irish jurisdiction is attractive for forming and operating crypto companies. The first benefit of working with crypto assets in Ireland is the favourable and profitable environment. Even small shops and restaurants accept crypto currencies as a form of payment, and there are multiple crypto ATMs throughout the country. Additionally, bitcoin and other crypto currencies can be traded in the EU with a crypto license in Ireland. The process of establishing a company has several advantages as well: it is straightforward and quick, and personal presence of the founders is not necessary. Furthermore, Ireland has a low tax rate. In addition to VASPs, corporate tax rates of 12.5% are applicable to them.
  • Cryptocurrency companies in Ireland are audited?
    That's right. VASPs are supervised by the Central Bank of Ireland regarding AML/CFT regulations. Through the application process and throughout the operation of crypto businesses, it ensures that relevant regulations are followed. Supervisors use a graduated approach to AML/CFT supervision: the more intrusive and intense supervision (e.g. onsite inspections and review meetings) they use, the higher the ML/TF risk is estimated. In addition to AML/CFT Risk Evaluation Questionnaires and outreach activities (e.g. seminars and presentations), the Central Bank's supervisory measures include lighter practices. ML/TF risk ratings determine crypto companies' engagement with these measures and supervision practices.
  • Non-resident directors of crypto companies are allowed?
    A crypto company may have two or more directors, but only if there are two or more directors. An EEA member state must have at least one director. There should only be one director in some types of business entities - the director must be a resident of the European Economic Area.
  • Does Ireland have measures in place to prevent money laundering and the financing of terrorism?
    Following are the steps applicants must follow to receive a VASP license from the Central Bank of Ireland:
    • Anti-money laundering compliance assessment for businesses.
    • The establishment of legal audit procedures aimed at clients (due diligence).
    • Follow-up on clients' activities and operations on a regular basis.
    • Suspicious transactions are gathered and submitted.
    • Anti-money laundering policies are developed and implemented in a systematic manner.
    • Preventing money laundering through personnel training.
  • How difficult is it to obtain a crypto license in Ireland?
    VASP licensing in Ireland takes a relatively long time compared to other EEA countries. An insufficient amount of information may result in even longer waiting times, since license applicants must submit an extensive collection of reports and surveys.

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At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Tallinn, Vilnius, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.

Company in Estonia OÜ

Registration number: 14153440
Anno: 16.11.2016
Licence number: FIU000186
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Registration number: 304377400
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