The Markets in Crypto-Assets Regulation (MiCA) introduces a unified regulatory framework for crypto-assets across the European Union (EU), promoting legal certainty, investor protection, and market stability. One of the core requirements under MiCA is obtaining a Crypto-Asset Service Provider (CASP) license, mandatory for businesses offering crypto asset services.
This licensing ensures compliance with strict standards on governance, security, and anti-money laundering (AML), enabling licensed CASPs to operate seamlessly across all EU member states. Whether you are an emerging startup or an established operator, obtaining a CASP license is essential to access the EU’s vast and dynamic market for digital assets.
In Bulgaria, the Financial Supervision Commission (FSC) is a competent authority overseeing CASP licensing under MiCA. Businesses operating or planning to provide crypto-asset services in Bulgaria must adhere to local implementation requirements alongside MiCA’s EU-wide provisions.
Our firm has a thorough knowledge of Bulgarian law and FSC requirements, ensuring that your compliance efforts are efficient and effective.
We can help your business meet compliance requirements and unlock the potential of the EU crypto market!
In Bulgaria, the FSC is a competent authority overseeing CASP licensing under MiCA
Key Numbers about a CASP License in Bulgaria
3 mountsaverage term of obtaining CASP license after application submission |
at least severaldirectors in a CASP |
up to €150kamount of the share capital depending from CASP activity |
10%personal income tax (PIT) rate |
10%corporate income tax (CIT) rate |
10%capital gains tax (CGT) rate |
Legal Opinion about a CASP License in Bulgaria
Ganna Voievodina
Manimama
|
CEO
“The CASP license in Bulgaria allows companies to legally offer crypto-related services, such as trading, exchange, wallet custody etc. in compliance with EU regulations. Bulgaria is an attractive jurisdiction for crypto businesses seeking legitimacy within the European market. Companies benefit from Bulgaria's favorable tax regime, relatively low operational costs, and access to the EU single market. In conclusion, securing a CASP license in Bulgaria provides businesses with a competitive edge while ensuring compliance with international standards”.
Types of Activities with a CASP License in Bulgaria
Providing custody and administration of crypto-assets on behalf of clients
This service means safekeeping or controlling, on behalf of third parties, crypto-assets or the means of access to such crypto-assets, where applicable in the form of private cryptographic keys. Holdings of crypto-assets on behalf of the clients shall be segregated from CASP’s holdings.
Operation of a trading platform for crypto-assets
This service contains of the management of one or more multilateral systems, which brings together or facilitates the bringing together of multiple third-party buying and selling interests for crypto-assets – in the system and in accordance with its rules – in a way that results in a contract, either by exchanging one crypto-asset for another, or a crypto-asset for funds.
Exchange of crypto-assets for funds
This service means the conclusion of purchase or sale contracts concerning crypto-assets with clients for funds by using proprietary capital.
Exchange of crypto-assets for other crypto-assets
This service means the conclusion of purchase or sale contracts concerning crypto-assets with clients for other crypto-assets by using proprietary capital.
Execution of orders for crypto-assets on behalf of clients
This service means concluding agreements to buy or to sell one or more crypto-assets or to subscribe for one or more crypto-assets on behalf of third parties and includes the conclusion of agreements to sell crypto-assets at the moment of their issuance.
Placing of crypto-assets
This service includes the marketing, on behalf of or for the account of the offeror or of a party related to the offeror, of crypto-assets to purchasers. Before placing the crypto-assets a CASP shall obtain the agreement of the issuers or any third party acting on their behalf.
Reception and transmission of orders for crypto-assets on behalf of clients
This service means the reception from a person of an order to buy or to sell one or more crypto-assets or to subscribe for one or more crypto-assets and the transmission of that order to a third party for execution.
Providing advice on crypto-assets
This service means offering, giving or agreeing to give personalized recommendations to a third party, either at the third party’s request or on the initiative of the a CASP providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services.
Providing portfolio management on crypto-assets
This service includes managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets.
Providing transfer services for crypto-assets on behalf of clients
This service means transfer, on behalf of a natural or legal person, crypto-assets from one distributed ledger address or account to another. Such service may be provided without virtual currency wallet opened for a CASP’s client.
Benefits of Obtaining a CASP License in Bulgaria
Legal recognition:
- The CASP license provides legal authority to operate crypto-assets related services, ensuring compliance with EU regulations.
- It legitimizes businesses, enhancing trust among clients and partners.
Favorable tax regime:
- Bulgaria offers a low corporate tax rate of 10%, one of the most competitive in the EU.
- This allows businesses to maximize profits and reinvest in growth.
Cost-effective operations:
- Bulgaria has relatively low operational costs compared to other EU countries, including affordable office space, utilities, and labor.
- It provides a cost-efficient setup for crypto businesses.
Regulatory compliance:
- The CASP license ensures adherence to EU AML and KYC standards.
- Compliance reduces risks of legal penalties and promotes responsible business practices.
Supportive legal environment:
- Bulgaria’s regulatory framework is well-defined and aligned with international standards, providing clarity for businesses.
- The government maintains a progressive stance towards crypto regulation.
Customer protection measures:
- Licensed CASPs must adhere to policies that safeguard customer funds and data.
- This helps prevent fraud and builds a long-term loyal client base.
Our Services
STEP 1
Incorporation stage
- Company formation in Bulgaria
- Provision of a registered address for 1 year
- Opening corporate bank account and transferring the share capital
- Appointment and employment of a local director
- Detailed company structure documentation
STEP 2
Pre-licensing stage
- Preparation and submission legal and financial documents (non-exhaustive list) according to MiCA
- Review of existing policies and procedures, if the company already has them
STEP 3
Licensing stage
- CASP license application assistance
- Conducting communication with the FSC during the license process
Our Experts in this Area
Step by Step Description
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Initial setup
- Initiating a preliminary project assessment
- Creating an action plan
- Preparation and filing of the package of documents
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Company registration
- Opening a bank account for depositing share capital and providing support during the funding process
- Notarized company registration
- Entering company data into the Bulgarian Commercial Register
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Obtaining a CASP license
- Preparation of documents according to MICA
- Submission an application to the licensing authority - FSC
- Reviewing the application to ensure it is complete (if any documents or information are missing, the applicant will be notified and given a specific deadline to provide the necessary additional documentation)
- Assessment of the documents` content submitted (a detailed review to verify that all regulatory requirements are met)
- Requesting of additional details (if applicable)
- Notification of grant or refusal of the CASP license
- Granting or refusal notification to European Securities and Markets Authority (ESMA)
- Publication in ESMA register
Bulgarian National Legislation
In Bulgaria, a transitional period for VASPs in effect until 31 December 2025
Regulation:
On 20 August 2024, the Ministry of Finance of Bulgaria submitted for consideration the Draft law ‘On Cryptocurrency Markets’ (Draft law), which introduces measures for the implementation of the MiCA and acts for its implementation, concerning the conditions for licensing, conducting activities and state supervision of cryptocurrency issuers and cryptocurrency service providers in Bulgaria. This act, although still at the draft stage, is already having an impact on the cryptocurrency markets in Bulgaria. The draft was at the stage of public discussion, and the deadline for submitting comments to it was 20 September 2024.
Licensing authority:
Draft law provides the obligation to obtain a license for cryptocurrency issuers and cryptocurrency service providers from a special authorized body - the FSC. The decision not to create a separate state body is due to the fact that the creation of a new unit within the FSC, will be accompanied by lower costs and, in addition, will allow it to rely on the administrative resources of the existing general administration of the FSC.
The CASP planning to operate in Bulgaria will be subject to the Draft law and will be required to undergo the licensing procedure and comply with the established requirements.
Procedure, timelines, fees:
The procedure for obtaining a CASP license in Bulgaria is carried out in accordance with the MiCA. It can be divided into two sub-procedures - licensing and registration. Proceedings for granting or renewing a license are initiated at the FSC by submitting an application for a license or a request for renewal of a license. The FSC, in turn, upon the proposal of the Deputy Chairman, issues a license or, accordingly, expands the scope of the license for the provision of crypto-asset services in accordance with the procedure and conditions.
The Draft law does not directly define a timeframe for processing a CASP application. However, it is worth noting that according to Article 63(9) of the MiCA, the competent authorities must, within 40 business days from the date of receipt of a complete application, assess whether the CASP meets the requirements and make a fully justified decision to grant or refuse the service provider a license. At the same time, clause 2 of Article 1 of Section III of the Draft law provides: “If the FSC does not make a decision on the application for a license within 6 months from the date of receipt of the application and all necessary documents and information, it shall be deemed to have refused to issue a license”.
A person who has been granted a license to operate as a cryptocurrency service provider is required to submit an application for registration in the Commercial Register to the Registration Agency within 7 days of receiving the license. This Agency enters the company into the Commercial Register, and the CASP is entitled to operate within the scope of its business after it is granted a license issued by the FSC.
Prices for obtaining the CASP license:
- Class 1: BGN 5,000 (~ €2,556)
- Class 2: BGN 10,000 (~ €5,113)
- Class 3: BGN 30,000 (~ €15,339)
In addition, the Draft Law proposes to pay for the services of extending the scope of the license of a CASP:
- from Class 1 to Class 2: BGN 8000 (~€4,090)
- from Class 2 to Class 3: BGN 25,000 (~€12,780)
Transition period:
Draft law establishes a transitional period for persons who, as of the date of entry into force of this Draft Law, already provide professional exchange services between virtual currencies. The transitional provisions of the Draft Law state that the virtual asset service providers (VASPs) which on the day of entry into force of this Draft law are entered in the electronic public register at the National Revenue Agency may continue to carry out the activities for which they are entered in the register in the territory of the Republic of Bulgaria without a license until 31 December 2025.
Requirements for Obtaining a CASP License in Bulgaria
Capital requirements for a CASP vary depending on what services the company will provide - from €50,000 to €150,000
Physical office requirements
A CASP shall have a registered office in Bulgaria where it carries out at least part of their crypto-asset services.
Requirements for key persons
-
Senior managers (directors):
- Number: MICA does not specify a minimum and maximum number of directors. However, MICA states (part 2, article 59) that there shall be at least several directors.
- Residency requirements: At least one director must be an EU resident.
- General requirements: Directories must have a solid reputation, necessary skills, and relevant experience.
- Required documents:
- a clean criminal record
- a detailed CV
- statements on time commitment and past professional conduct
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Shareholders:
- Number: MICA does not specify a minimum and maximum number of shareholders.
- Residency requirements: There is no restriction.
- General requirements: Shareholders must have a solid reputation, necessary skills, and relevant experience.
- Required documents:
- a clean criminal record
- an ownership structure chart
Capital requirements
Capital requirements vary depending on what services the company will provide:
Class 1: A CASP authorized for the following crypto-asset services:
- execution of orders on behalf of clients
- placing of crypto-assets
- providing transfer services for crypto-assets on behalf of clients
- reception and transmission of orders for crypto-assets on behalf of clients
- providing advice on crypto-assets and/or
- providing portfolio management on crypto-assets
Minimum capital requirements - €50,000.
Class 2: A CASP authorized for any crypto-asset services under Class 1 and:
- providing custody and administration of crypto-assets on behalf of clients
- exchange of crypto-assets for funds and/or
- exchange of crypto-assets for other crypto-assets
Minimum capital requirements - €125,000.
Class 3: A CASP authorized for any crypto-asset services under Class 2 and:
- operation of a trading platform for crypto-assets
Minimum capital requirements - €150,000.
Documentation requirements
There are list of documents that must be submitted with the application:
-
Documents required for all CASPs:
- The articles of association of the applicant CASP
- Identity and proof of good repute, knowledge, skills, experience and of sufficient time commitment of the members of the management body
- Information relating to shareholders or members with qualifying holdings
- A program of operations setting out the types of crypto-asset services that the applicant CASP wishes to provide, including where and how these services are to be marketed
- A description of the applicant CASP’s prudential safeguards (insurance policy)
- A description of the applicant CASP’s governance arrangements and internal control mechanisms
- A description of the applicant CASP’s business continuity plan
- Detection and prevention of money laundering and terrorist financing (full packet of policies)
- Descriptions both in technical and non-technical language of applicant CASP’s IT systems and security arrangements
- A description of the applicant CASP’s procedures to handle complaints from clients
- Documents required in case CASP wishes to offer services in other countries:
- List of EU countries where the company wishes to offer its services
- Documents required for certain services (each of the 10 services requires its own documents):
- Custody and administration policy
- A description of the procedure for the segregation of client’s crypto-assets and fund
- The operating rules of the trading platform and market abuse detection
- Information on the exchange of crypto-assets for funds or other crypto-assets (commercial policy)
- The execution policy
- Information on the provision of advice or portfolio management on crypto-assets
- Information on transfer services
Taxes in Bulgaria
The CIT rate is a flat 10%, applying to all taxable profits
Corporate Income Tax (CIT)
The CIT rate is a flat 10%, applying to all taxable profits. This tax applies to companies incorporated under Bulgarian law, as well as non-resident companies generating income within Bulgaria or through a permanent establishment. This tax rate is one of the lowest in Europe and makes the country one of the most attractive jurisdictions for a crypto business.
Effective from January 1, 2024, Bulgaria implemented a minimum effective tax rate of 15% for multinational enterprise groups and large-scale domestic groups with annual revenues of €750 million or more.
Capital Gains Tax (CGT)
Individuals: Capital gains are generally taxed at the standard PIT rate of 10%.
Corporations: Capital gains are included in corporate taxable income and taxed at the standard CIT rate of 10%.
Personal Income Tax (PIT)
The flat PIT rate of 10% applies to all personal income, including wages, salaries, and self-employment income. Non-resident individuals are taxed at the same rate on income from Bulgarian sources.
Frequently Asked Questions
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What is a CASP license in Bulgaria?The CASP license allows companies to legally offer crypto asset services in Bulgaria.
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Who issues the CASP license in Bulgaria?The Financial Supervision Commission (FSC) issues CASP licenses.
-
What services can be provided under a CASP license?
It allows services such as:
- 1) Providing custody and administration of crypto-assets on behalf of clients
- 2) Operation of a trading platform for crypto-assets
- 3) Exchange of crypto-assets for funds
- 4) Exchange of crypto-assets for other crypto-assets
- 5) Execution of orders for crypto-assets on behalf of clients
- 6) Placing of crypto-assets
- 7) Reception and transmission of orders for crypto-assets on behalf of clients
- 8) Providing advice on crypto-assets
- 9) Providing portfolio management on crypto-assets
- 10) Providing transfer services for crypto-assets on behalf of clients
-
What are the key requirements to obtain a CASP license in Bulgaria?Companies must meet physical office requirements, requirements for managers and shareholders, minimum capital requirements, documentation requirements.
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Is it mandatory to have a physical office in Bulgaria to obtain a CASP license?Yes, a local office in Bulgaria is required for regulatory oversight.
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Is there a minimum capital requirement for obtaining a CASP license?Yes, applicants must meet specific financial and operational adequacy standards, but the exact minimum capital depends on the services offered (€50,000, €125,000, €150,000).
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What is the process for applying for a CASP license?The process involves submitting an application to FSC with detailed documentation on the company structure, management, AML policies, and financial plans, etc.
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How long does it take to obtain a CASP license?The preparation of documents and the review process typically takes several months, depending on the completeness of the application and the authority's workload.
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What are the fees associated with obtaining and maintaining a CASP license?Application and annual supervision fees apply, and they vary based on the scale of services provided.
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What is the role of management in meeting CASP license requirements?The management team must demonstrate relevant experience, integrity, and the ability to manage crypto-related risks.
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Can an individual apply for a CASP license, or is it limited to companies?The CASP license is typically issued to legal entities, not individuals.
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