Thanks to the flexible structure established by the Gibraltar regulatory body, Gibraltar is an ideal place to obtain a cryptocurrency license. Opportunities are provided here for initial coin offerings, the operation of cryptocurrency exchanges, and wallet providers. In addition, Gibraltar holds a strong reputation in the blockchain community as a leading jurisdiction for registering blockchain-related companies. Gofaizen & Sherle offers its expert support in the process of registering and obtaining cryptocurrency licenses not only in Gibraltar but also in other legal jurisdictions
Gibraltar is a popular international tax haven with a well-developed financial infrastructure including banks, insurance companies, and investment funds. This makes it a profitable place to do business and invest.
Gibraltar is unique in its economic model, based largely on its status as an offshore financial services center. The blockchain industry is also currently active in this area, and Gibraltar's regulatory body has issued a significant number of licenses to blockchain operators. Some of the most prominent cryptocurrency exchanges and primary coin offerings in the world have chosen Gibraltar as their jurisdiction for licenses. The list of licensed companies includes several major cryptocurrency trading platforms. These include Huobi, which is the fourth largest exchange by trading volume, and Coinfloor, the oldest cryptocurrency trading platform in the UK.
Gibraltar has a specialized legislative framework that regulates cryptocurrencies and blockchain businesses. It provides legal clarity, investor protection, and compliance with anti-money laundering (AML) and customer identification procedures (KYC). Gibraltar's regulatory body, the Financial Services Commission (GFSC), oversees compliance with these laws and standards.
Gibraltar has a favorable environment for commercial activity, including low tax rates and tax incentives for cryptocurrency companies. This makes the country attractive for fintech companies and cryptocurrency projects. In addition, cryptocurrencies are regulated and recognized as a means of payment alongside regular fiat money in Gibraltar. Exchanges, cryptocurrency exchanges, token issuance, and initial coin offerings are allowed in the country.
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Currently, according to CoinMarketCap, the daily global bitcoin trading volume exceeds 20 billion dollars. Thanks to Gibraltar's simplified and cost-effective process for obtaining a cryptocurrency license, you can join this lucrative market in as little as three months.
In the context of increasingly complex cryptocurrency regulation in key economic countries such as the United States and the European Union, Gibraltar offers a cost-effective and risk-free alternative for launching a licensed cryptocurrency exchange or conducting broker-dealer activities.
Obtaining a cryptocurrency license in Gibraltar can provide your company with several significant benefits:
1. Well-defined regulatory structure
Gibraltar has developed a robust regulatory structure specifically tailored for cryptocurrencies and blockchain-based businesses. This structure provides clarity and legal certainty for cryptocurrency-related activities and ensures compliance with anti-money laundering (AML) requirements and customer identification procedures (KYC).
2. Low tax regime
Gibraltar has a favorable tax regime for crypto businesses, which can help reduce your company's costs. The corporate tax rate is only 12,5%, which creates a favorable environment for profitability and growth. In addition, there are no taxes on capital gains and dividends, making Gibraltar a tax-efficient jurisdiction for cryptocurrency companies.
3. Strong infrastructure
Gibraltar has a strong infrastructure to support crypto-business, including banks, lawyers, and accountants familiar with the sector.
4. Strong investor protection
Gibraltar's regulatory structure emphasizes investor protection, including strict capital requirements and proper governance systems. This inspires confidence in potential investors, attracts capital, and promotes growth in the cryptocurrency sector.
5. Innovative ecosystem
Gibraltar has a vibrant and innovative ecosystem for blockchain and cryptocurrency companies. The jurisdiction actively encourages innovation by providing support and resources for the development of cutting-edge technologies and projects.
6. Various expansion opportunities
Obtaining a cryptocurrency license in Gibraltar opens up opportunities for expansion and access to a large customer base within the EU.
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In 2018, Gibraltar became one of the first jurisdictions to adopt and implement the Distributed Ledger Technology Framework (DLT Framework), which provides licensing requirements for cryptocurrencies and other blockchain-based businesses. Today, Gibraltar continues to actively develop legislation to ensure the integrity of crypto-businesses and encourage the development of blockchain-based products and services.
The Financial Services Act passed in 2019, is the primary legislation regulating cryptocurrency companies in Gibraltar. This law establishes 10 principles for the regulation of crypto-businesses and requires all DLT providers to conduct their economic activities in good faith to maintain the continuity of the market's reputation.
Under the Financial Services Act, cryptocurrency companies must obtain a license from the GFSC to operate in Gibraltar. A DLT Provider license is a license issued under Section 8 of the said Act to conduct the controlled activity of providing distributed ledger technology services. The process of obtaining a license involves a thorough assessment of the business model, security measures, and compliance procedures. In Gibraltar, the following cryptographic activities are subject to licensing:
Despite Gibraltar's withdrawal from the European Union with the UK, its anti-money laundering (AML) regulations remain aligned with the EU's Fifth and Sixth Anti-Money Laundering Directives (AMLD5 and AMLD6). This means that DLT businesses in Gibraltar must comply with requirements such as the proven competence of senior management and the implementation of customer due diligence (KYC) procedures and other internal policies aimed at identifying and mitigating risks associated with customers and their countries of domicile.
In addition to specific cryptocurrency regulation, cryptocurrency transactions in Gibraltar may also be subject to other relevant laws and regulations, including:
It is important for cryptocurrency companies operating in Gibraltar to comply with the relevant laws and regulations applicable to their specific activities. The Gibraltar Financial Services Commission (GFSC) and other regulatory bodies monitor and enforce compliance with these laws to ensure that the cryptocurrency ecosystem in Gibraltar is secure.
To apply for a DLT provider license, company registration in Gibraltar is required. One or more foreigners can set up a private limited company, choosing this as the most common legal business structure. This requires registering the company with the Gibraltar Registration Chamber, which usually takes about a week. The authorized capital of the company is determined based on a business plan.
The documents required to register a company are:
Requirements for a private limited company that plans to engage in DLT-related activities in Gibraltar include:
If the documents are not in English, they must be accompanied by a notarized translation.
The standard procedure for obtaining a GFSC crypto license includes:
Preparing and submitting an application, which should contain all necessary information about your company, including a business plan, description of operations, financial information, and compliance policy.
Information about the competence of the founders and directors must also be included. Each founder and director of the company must provide:
Payment of fees associated with processing the license application.
The fee for obtaining a crypto license in Gibraltar depends on the complexity of the business you plan to operate. For example:
The license must be renewed annually.
In addition, there are application fees, inspection fees, registration fees, and several other fees that are paid during the licensing process.
It is important to note that specific requirements, procedures, and fees may change over time. Therefore, it is recommended to contact the GFSC directly or the legal advisors at Gofaizen & Sherle for the latest information and guidance on obtaining a license.
Gibraltar does not levy a specific tax on cryptocurrencies. However, cryptocurrency companies in Gibraltar are still required to adhere to general taxation principles and pay the general taxes imposed by the Internal Revenue Service. The tax year in Gibraltar runs from July 1 to June 30, and tax returns must be filed accordingly by the due dates.
Gibraltar is renowned for its low taxation and offers certain tax advantages to cryptocurrency businesses. For example, Gibraltar does not impose taxes on capital gains, interest, and dividends. As of April 1, 1997, Gibraltar also discontinued the estate duty. In addition, Gibraltar's taxation system does not include value-added tax (VAT). Corporate tax in Gibraltar is governed by the Income Tax Act 2010 and applies to profits derived from income accumulated and earned in Gibraltar. For companies in the cryptocurrency industry, the corporate tax rate is 12,5%.
Under the Social Security Act 2021, all cryptocurrency companies registered in Gibraltar are required to make weekly social security contributions regardless of the location of their employees, as long as they are registered with the Employment Service. Contributions range from £28 to £50 per week ($37 to $66).
The social security exemption applies in the following cases:
Stamp duty applies to the transfer or sale of real estate situated in Gibraltar or shares in a company that owns real estate in Gibraltar and is based on the market value of the real estate. Stamp duty rates vary depending on the value of the property.
Gibraltar currently has only one international Double Taxation Agreement signed with the UK. However, companies can take advantage of relief on foreign tax that has already been paid. A Gibraltar resident who receives income subject to tax in Gibraltar and derived from another jurisdiction where tax has already been paid is entitled to a unilateral exemption in Gibraltar from taxation of that income. The amount of the exemption is equal to the tax already paid or Gibraltar tax (the lower value is chosen).
It is important to note that tax legislation is subject to change and it is recommended that you seek advice from a tax professional to obtain up-to-date information on the applicable tax rates and rules in Gibraltar.
These regulations are designed to prevent the use of cryptocurrency services for money laundering, terrorist financing, and other criminal activities. The AML and KYC rules require companies to collect and store information about their customers, including their names, addresses, phone numbers, and dates of birth. Companies must also conduct identity checks on their customers to ensure that they are who they say they are. Companies must also have a system of internal controls that allows them to identify and report suspicious transactions.
Companies that fail to comply with AML and KYC regulations can be fined or even have their license revoked.