Tax Summary:

1. Personal income tax –  0-45%
2. Corporate income tax – 25%

What law/s governs VASP activities?

1. LOI n° 2019-486 du 22 mai 2019 relative à la croissance et la transformation des entreprises (1) 
2. Code monétaire et financier (“CMF“)
3. Rules applicable to digital asset service providers (applicable from 01.01.2024)
4. Digital assets service providers – Cybersecurity system of requirements (applicable from 01.01.2024)
5. AMF General Regulation – Book VII (applicable from 01.01.2024)
6. Ordonnance n° 2020-1544 du 9 décembre 2020 renforçant le cadre de la lutte contre le blanchiment de capitaux et le financement du terrorisme applicable aux actifs numériques 
7. QUESTIONS & ANSWERS ON THE DIGITAL ASSET SERVICE PROVIDERS REGIME (“Q&A“)

What activities are included in VASP services?

According to Article L54-10-2 of the CMF digital asset services include the following services:

1. The service of conserving digital assets or accessing digital assets on behalf of third parties, if necessary in the form of private cryptographic keys, in order to hold, store and transfer digital assets.
2. The service of buying or selling cryptocurrencies in legal tender currency.
3. The service of exchanging cryptocurrencies for other cryptocurrencies.
4. The operation of a digital asset trading platform.
5. The following services:

• The reception and transmission of orders on cryptocurrencies on behalf of third parties.
• Portfolio management of cryptocurrencies on behalf of third parties.
• Advice to subscribers of cryptocurrencies.
• Underwriting of cryptocurrencies.
• Secured placement of cryptocurrencies.
• Unsecured placement of cryptocurrencies.

Who is the VASP regulator?

1. Autorité des marchés financiers (“AMF“)
2. Autorité de Contrôle Prudentiel et de Résolution (“ACPR“)

What is the procedure for registering a VASP for a local company?

The DASP must notably comply with the following conditions:

1. Either have professional indemnity insurance or a minimum amount of own funds.
2. At least have one executive manager.
3. Have sufficient human and technical resources.
4. Have resilient IT systems.
5. Have an internal control system.
6. Have a claims handling procedure.
7. Have an organization enabling it to avoid conflicts of interest.
8. Have procedures for the prevention of money laundering and the financing of terrorism. 

To provide the services referred to in paragraphs 1-4 of Article L54-10-2 of the CMF in France, you shall mandatorily register first with the AMF. This obligation applies to DASPs established in France but also outside France.

For services specified in paragraphs 1, 2 of Article L54-10-2 of the CMF, the AMF, in conjunction with the ACPR, checks that complying with the regulations on AML/CFT. In all cases, the AMF checks the good reputation and competence of the managers and beneficial owners of your organization and seeks clearance from the ACPR.

The following four forms must be completed to apply for registration:

1. AMF DASP Form.
2. AMF DASP Executive Manager Form.
3. AMF DASP Significant Shareholders Form.
4. AMF DASP Programme of operations.

The registration application and its constituent parts shall be sent by email to the AMF at the following address: psan@amf-france.org.  

Is there any specific authorization required for a VASP from another EU member state to provide services in this jurisdiction?

When a DASP referred to in points 1 to 4 of Article L. 54-10-2 of the CMF is (i)  established in France or (ii) provides services to customers residing or established in France, it must be registered by the AMF, even if it is registered or matriculated in another Member State. DASPs should provide proof of the existence of the establishment when they make their request for registration.

What is the liability for the activities of a VASP from another EU member state without local registration/authorization in this jurisdiction?

Article L54-10-4 of the CMF states that the practice of the profession of service provider mentioned in 1 to 4 of article L. 54-10-2 is forbidden to any person who has not been previously registered by AMF.

Article L572-23 of the CMF prescribes – It is punishable by two years’ imprisonment and a fine of €30,000 for any person acting either on his own behalf or on behalf of a legal entity to disregard one of the prohibitions set out in article L. 54-10-4.

Manimama Legal & Growth Agency provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.