Finland Cryptocurrency exchange license

The Finnish government and the country’s Central Bank attribute cryptocurrencies to high-risk assets and do not rank them as “real” money. Government agencies and the financial regulator consider Bitcoin and other non-fiat funds as instruments of payment, counting of “non-existing” assets, emphasizing their speculative nature and high risks.

Cryptocurrency transactions, including purchasing, selling, and using digital assets, are legal in Finland. It is also essential that entities operating in this niche must adhere to clear legal criteria. This is necessary to manage and protect client assets and guarantee integrity safely. The government has taken measures to regulate cryptocurrency services. The Virtual Currency Providers Act was enacted on May 1, 2019. This emphasizes the importance of obtaining a Finland crypto license for safe and legal work in this sector.

Main Activities for which a Crypto License in Finland is Suitable

Obtaining a Finland cryptocurrency exchange license opens doors to various crypto-related projects:

  1. Holding digital assets with Custody services.
  2. Transactions from traditional Fiat currency to cryptocurrencies.
  3. Operating a Crypto exchange for trading purposes.
  4. Launching Initial Coin Offerings (ICO).
  5. Initiating Token Offerings (ITO).

Advantages of the Finland Crypto License

  • If entrepreneurs and investors working in the sector have a cryptocurrency license in Finland, it will significantly increase the business’s credibility, showing it as a regulated entity.
  • The ability to effectively promote the company in the digital currency market, gaining trust from customers and partners.
  • For highly skilled professionals, this country will guarantee that the business will operate at the proper level.
  • Obtaining a crypto license in Finland is convenient and comprehensive for everyone.
  • Fintech innovations will have a dynamic environment with ample opportunities for networking and growth.

Finland and Other Countries in Obtaining a Crypto License

Obtaining a cryptocurrency license in Finland enhances a business’s reputation, showcasing it as a regulated entity crucial for gaining trust in the digital currency market. Finland guarantees a conducive environment for fintech innovation, with ample growth and networking opportunities, especially for skilled professionals. The Finland cryptocurrency license register process is straightforward, ensuring ease of compliance.

On the other hand, Malta offers unique advantages as the first European country to regulate cryptocurrencies. It stands out globally in the digital asset domain, providing a VAT-exempt environment for crypto exchange transactions, further cementing its position as a premier location for crypto businesses.

Crypto Exchange License in Finland Guide

A thorough understanding of the applicable Finnish legislation is required to engage in trading, exchanging, issuing, or providing wallet services.

The Fifth Anti-Money Laundering Directive and the Virtual Currency Providers Act

Legislation requires entities to register crypto licensing in Finland to operate legally, given the significant money laundering risks. The FIN-FSA oversees this registration, ensuring compliance with document storage requirements, handling customer money, and due diligence of users.

Cryptocurrency exchange services:

  • To establish virtual currency exchange services, entities must critically evaluate and categorize the virtual currencies they plan to use for trading.
  • The Law on Virtual Currency Exchange Service Providers provides for mandatory registration with the FIN-FSA. There are additional requirements for exchanges working with fiat currencies or financial instruments.
  • An assessment must be made to determine whether a virtual currency is a financial instrument impacting regulatory obligations.

Requirements and Timeframe

The Financial Supervisory Authority (FIN-FSA) oversees cryptocurrency operations in Finland, aligning with EU and Schengen regulations. High standards in KYC and AML, with a focus on fintech and non-fiat funds, are maintained.

License Requirements

For legal operation and Finnish Cryptocurrency License benefits, platforms must:

Opt for an OY, a joint-stock company, with the required authorized capital.

Acquire or rent office space, and open a bank account.

Hire Professional Employees: Directors and staff must meet European financial education and work experience standards.

Develop a comprehensive business plan, anti-terrorist financing, anti-money laundering policies, user agreements, and internal control rules.

Risk Assessment and Due Diligence are crucial for accounting for all possible risks.

Implement controlled access systems, ensuring compliance with KYC rules, especially for EU residents.

Share Capital for LLC: 2500 EUR for an LLC.

Registration typically takes 4-6 months with careful document preparation, ensuring a smooth process.

Finnish Crypto Taxation

Crypto assets are not considered legal tender but are taxable assets. Finland adheres to international taxation standards, including the EU Administrative Cooperation Directive. The country also ensures compliance with OECD crypto asset reporting.

Businesses that want to obtain crypto exchange licenses in Finland must file electronic tax returns and make advance tax payments within the specified timeframe.

More about taxes:

Corporate income tax

  • Local or international companies are subject to a 20% tax.
  • Deductible expenses include start-up costs and specific needs such as mining equipment.

Withholding tax

  • Applies to foreign legal entities and individuals with a rate of 15 to 35%.
  • There are exceptions and the possibility of refunding overly withheld tax.

Capital gains tax

  • Capital gains are taxed at 20% for businesses and between 30% and 34% for individuals, depending on the amount.
  • Different cryptocurrency activities may trigger taxable events, and losses may be offset against profits.

Value added tax (VAT)

  • The standard rate is 24%. Cryptocurrency exchanges are exempt from taxation.
  • Small businesses can voluntarily become VAT payers to receive a deduction.

Payroll taxes

  1. Employers in the crypto sector must withhold income tax and social security contributions.
  2. The rates vary depending on the level of income and municipality.

FAQ

Is a resident director required for a Finnish cryptocurrency license?

No, but having a local contact person for reporting to regulators and AML is highly recommended.

Do I need a physical office in Finland to obtain a crypto license?

Yes, your company must have a real presence. Not just a mailing address.

What are the terms of obtaining a crypto exchange license in Finland?

To obtain a cryptocurrency exchange license in Finland, ensure compliance with FIN-FSA requirements, have a Finnish physical office, maintain strong AML and transparent operational practices, and so on.

Which agency is regulating the activities of crypto companies in Finland?

The Financial Supervisory Authority (FIN-FSA) regulates the activities of crypto companies in Finland.

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