Regulation of the cryptocurrency market is constantly becoming stricter. Nowadays jurisdictions impose high regulatory and risk management requirements on virtual asset service providers.
Despite this, we always manage to find a solution that suits the client. All the time our team provides research of the market and regulations on various markets to find the best jurisdiction. Not so long ago we have made the global overview of the VASP regulation in EEA and ready to share information with our future and existing clients. Today we will look at the features of obtaining a cryptocurrency license in Slovenia.
Tax Summary:
- Personal income tax – from 16 to 50%
- Corporate income tax – 19%
What law/s governs VASP activities?
- Law on Prevention of Money Laundering and Financing of Terrorism (ZPPDFT-2)
- Act on Foreign Exchange Operations (ZDP-2)
- Act on Payment Services, Electronic Money Issuing Services and Payment Systems (ZPlaSSIED)
- Rulebook on the register of providers of exchange services between virtual and fiat currencies and providers of custodial wallets
What activities are included in VASP services?
According to the section 1.2.(48) of the Law on Prevention of Money Laundering and Financing of Terrorism (ZPPDFT-2), virtual currency services are the following services that a natural or legal person performs as a business or professional activity for a third party:
- Exchange between fiat and virtual currencies.
- Exchange between one or more types of virtual currencies.
- Transfer of virtual currencies between different accounts or addresses.
- Safekeeping or management of virtual currencies, including the provision of private cryptographic key protection services on behalf of its customers, for the storage, storage and transfer of virtual currencies.
- Services related to the issuance or sale of virtual currencies.
Who is the VASP regulator?
- The Securities Market Agency
- Bank of Slovenia
- Office for the Prevention of Money Laundering
What is the procedure for registering a VASP for a local company?
Virtual currency service providers with headquarters or branches in the Republic of Slovenia must register in the Register of Virtual Currency Service Providers, which is maintained and managed by the Office for the Prevention of Money Laundering, before starting to provide virtual currency services.
The request for entry in the register can be submitted in an application form , which must be filled out and:
- Hand-signed and sent to the office by post at the address Cankarjeva cesta 5, 1000 Ljubljana.
- Sign with a secure electronic signature with a qualified certificate and send to the office’s email address mf.uppd@gov.si.
An application must contain the following information according to the article 3 of the Rulebook on the register of providers of exchange services between virtual and fiat currencies and providers of custodial wallets:
- The provider’s company name.
- Address of the provider.
- Provider’s headquarters.
- Provider’s identification number.
- Tax number of the provider.
- Personal name of the provider’s legal representative or business operator.
- Address of the permanent and temporary residence of the legal representative or operator of the provider’s activities.
- Slovenian Unique Master Citizen Number or the date and place of birth of the provider’s legal representative or provider.
- The tax number of the legal representative or operator of the provider’s activity.
- The nationality of the legal representative or operator of the provider’s activities.
- Activity number and name of the provider’s activity classification.
- An extract from the criminal record for representatives, owners.
- Description of the way of providing exchange services between virtual and fiat currencies and offering custodial wallets.
- Amount of ownership share or other control method for a legal representative.
According to the article 6 of the Rulebook on the register of providers of exchange services between virtual and fiat currencies and providers of custodial wallets, the certificate of entry in the register is issued to the provider after entry in the register at his request.
Is there any specific authorization required for a VASP from another EU member state to provide services in this jurisdiction?
Paragraph 2 of the article 5 of the Law on Prevention of Money Laundering and Financing of Terrorism (ZPPDFT-2) states, that Providers who have their headquarters or branches in the Republic of Slovenia shall register in the register from the previous paragraph before starting to provide virtual currency services.
No other article of this or any other law explicitly states that companies that are not registered in Slovenia or do not have their branches in Slovenia are required to register in this register.
Also, all the companies in the current register of virtual currency service providers are registered in Slovenia.
According to article 185 of the Law on Prevention of Money Laundering and Financing of Terrorism (ZPPDFT-2), providing virtual currency services without entering the register of providers of exchange services between virtual and fiat currencies and providers of custodial wallets is a violation of the law.
It follows from the above that in order to provide services related to virtual currencies, a foreign company needs to establish a division in Slovenia.
The requirements and procedure for entering branches of foreign companies in the register are similar to those for local companies.
What is the liability for the activities of a VASP from another EU member state without local registration/authorization in this jurisdiction?
Provision of services related to virtual currencies without entering the register of providers of exchange services between virtual and fiat currencies and providers of custodial wallets is a violation of the law under Article 185 the Law on Prevention of Money Laundering and Financing of Terrorism (ZPPDFT-2).
Such violation is punishable by a fine in the amount from 3 000 to 120 000 Euros for legal entities and from 800 to 4 000 euros for responsible individuals.
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.
