Today there are a huge number of people who dream of opening their own business in the crypto industry because of its huge opportunities for development and making huge profits even with minimal financial investments. For your business to be able to operate legally, you must receive a cryptocurrency license. At the same time, many people have a question about how to choose the most suitable jurisdiction and what you should pay attention to first. We want to talk about this in more detail in our article.
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Why is choosing the right country so critical?
There are a huge number of countries that issue work permits for crypto organizations, but each of them sets its own rules for regulating this industry. Some types of permits allow people to legally work only in a selected country, while others open up almost all countries. Thus, choosing a country is a choice of the path your organization will take and what opportunities it will have for development.
What should you pay attention to when choosing the right country?
Making a choice is often quite difficult because you need to study the rules for regulating the crypto industry in different countries, determine your capabilities, and choose the most suitable options. First of all, you need to pay attention to such points.
In today’s world, reputation is critical. If you obtain permission from a respectable jurisdiction, it will be much easier for you to attract new investors and clients, because they can be sure that you are a reliable partner and all controversial issues can be resolved within the legal framework. By being authorized in a respectable country, you will be able to collaborate with other reputable firms, including payment processors, software providers, and financial institutions.
Demands for applicants
The higher the reputation of the jurisdiction, the more difficult it will be for you to obtain a work permit here. This will set quite complex requirements for each applicant. As a rule, the requirements relate to the following aspects:
- The reputation of the owner and employees in key positions;
- Availability of local office and employees;
- Compliance with AML and KYC rules;
- Thoughtful business plan;
- Amount of money in the account
- The quality of the software that the firm plans to use in its work;
- The direction of your organization’s work (exchange, wallet, or other more innovative project).
Meeting complex demands, especially if you have a small project with a limited budget, is incredibly difficult. As a result, many organizations choose to take the simpler route and receive permission in offshore jurisdictions where the requirements are minimal.
However, if you decide that reputation is more important to you, we advise firm owners to immediately build the organization’s architecture, taking into account the requirements of government agencies in the chosen jurisdiction. This will help you save money, time, and effort.
Speed of obtaining permission
Quite often there are times when there is a need to launch a business as quickly as possible. This is often due to a race of potential, especially if you know that your competitors want to release something similar to the market before you. In addition, if you have a limited budget and have an urgent need to make a profit as quickly as possible, you should choose a jurisdiction that makes decisions as quickly as possible. So, the UK decides within 6 months, and in the UAE it takes about 2 weeks.
What area does the permit cover?
Some countries offer enormous opportunities for organizations that choose to obtain a work permit here, while others provide the opportunity to legally operate only on their territory. Thus, obtaining a license in any European country opens up the opportunity to legally work throughout the EU. And having a permit in any of the US states opens up opportunities to work in the entire American market.
After receiving a permit, cooperation with the jurisdiction does not end, because you will have to regularly pay taxes. The amount of taxation varies greatly depending on the chosen jurisdiction. There are quite a few offshore jurisdictions that exempt you from paying taxes, while reputable jurisdictions such as Lithuania, Poland, or the Czech Republic ask you to pay 15% to 20% of your income.
Choosing on your own is extremely difficult because you need to study a huge number of regulations, which is extremely difficult if you do not have a specialized education. We advise you to seek help from Gofaizen-Sherle lawyers, who will study the activities of your company, listen to your wishes, and help you choose the most suitable jurisdiction.