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 Luxembourg, the Financial Sector Supervisory Commission (Commission de Surveillance du Secteur Financier / CSSF) is the competent authority overseeing CASP licensing under MiCA. Businesses operating or planning to provide crypto-asset services in Luxembourg must adhere to local implementation requirements alongside MiCA’s EU-wide provisions.
Our firm has a thorough knowledge of Luxembourg law, 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 Luxembourg, the CSSF is the competent authority overseeing CASP licensing under MiCA
Key Numbers about a CASP License in Luxembourg
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 |
up to 42%personal income tax (PIT) rate |
16%corporate income tax (CIT) rate |
no specialcapital gains tax (CGT) rate |
Legal Opinion about a CASP License in Luxembourg
Ganna Voievodina
Manimama
|
CEO
“Obtaining a CASP license in Luxembourg is essential for businesses offering crypto-asset services. Applicants must meet requirements, including robust AML/CFT compliance, a formal governance structure, and sufficient operational capital. Once licensed, CASPs must adhere to ongoing reporting obligations and maintain compliance with Luxembourg and EU regulations. A CASP license enhances credibility and provides access to the EU market under a clear regulatory framework”.
Types of Activities with a CASP License in Luxembourg
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 Luxembourg
Reputable financial hub:
- Luxembourg is a globally recognized financial center, home to numerous investment funds, banks, and fintech firms.
- A CASP license from Luxembourg boosts credibility and facilitates partnerships with traditional financial institutions.
Strong legal framework:
- Luxembourg has a well-established legal and regulatory framework for fintech and crypto businesses.
- The country’s proactive approach ensures regulatory clarity, minimizing risks of legal changes disrupting operations.
Efficient licensing process:
- The Luxembourg regulator, CSSF, provides structured and transparent licensing procedures.
- Luxembourg has a reasonable timeframe for processing CASP applications.
Supportive blockchain ecosystem:
- Luxembourg actively promotes blockchain innovation through initiatives like Infrachain and government-backed projects.
- Companies benefit from state-sponsored fintech accelerators and funding programs.
EU-wide passporting under MiCA:
- CASPs are able to offer services across the EU without additional licensing.
- This enables companies to expand into 27 EU countries seamlessly.
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 Luxembourg
- 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 CSSF during the license process
Our Experts in this Area
Step by Step Description
-
Initial setup
- Initiating a preliminary project assessment
- Creating an action plan
- Preparation and filing of the package of documents
-
Company registration
- Choosing and verifying the corporate name via the Luxembourg Business Register (LBR) online portal
- Preparation of corporate address
- Opening a bank account and depositing share capital
- Registering the company with the LBR
- Obtaining the Certificate of incorporation from LBR, Memorandum and Articles of Association
- Registration for tax purposes
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Obtaining a CASP license
- Preparation of documents according to MICA
- Submission an application to the licensing authority - CSSF
- 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
National Legislation of Luxembourg
In Luxembourg, the transition period means that applicants may continue to provide services related to the provision of crypto-asset services until July 1, 2026
Regulation:
In Luxembourg, the primary legislation implementing the Markets in Crypto-Assets Regulation (MiCA) is Law No. 8387. Introduced to the Luxembourg Parliament in May 2024, this law aims to amend several existing laws to align with MiCA's requirements. The law defined:
- the competent authority in charge of supervising MiCA compliance
- the transitional regime
- fines for MiCA compliance breaches
Licensing authority:
The Commission de Surveillance du Secteur Financier (CSSF) is the authority responsible for enforcing regulations relating to crypto-assets, particularly granting or refusing in the CASP licensing.
Procedure, timelines fees:
Following the full application of MiCA, i.e. after 30 December 2024, the CSSF must assess within 25 working days of receiving an application for authorisation whether all of the required information has been included in the application. At this stage, however, the CSSF will not assess the quality of the information provided. The CSSF may ask the applicant to supplement the application if some or all of the required information is missing. The CSSF will set a deadline for the submission of any missing information. After the submission of missing information, the CSSF will have 40 working days to make a qualitative assessment of the application. During this period, the CSSF has the opportunity to submit additional requests for clarification, but only the first of these requests will suspend the 40 working day assessment period, for a maximum of 20 working days.
Transition period:
The law outlines a transitional regime for VASPs registered with the CSSF as of December 30, 2024. These VASPs can continue their operations until July 1, 2026, or until they receive or are denied authorization as CASPs, whichever comes first. During this period, they remain subject to existing AML obligations and are treated as CASPs under the Transfer of Funds Regulation.
Requirements for Obtaining a CASP License in Luxembourg
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 Luxembourg 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
-
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 Luxembourg
The CIT rate of 16% applies to companies with taxable income exceeding €200,000
Corporate Income Tax (CIT)
Starting from the 2025 tax year, the CIT rate has been reduced to 16% for companies with taxable income exceeding €200,000.
A Luxembourg resident company subject to full taxation will be taxed at a maximum aggregate tax rate (including corporate tax, municipal income tax and employment fund contribution) of 23.87%.
For companies with taxable income up to €175,000, the rate is now 14%.
Capital Gains Tax (CGT)
Capital gains are generally included in taxable income and taxed at standard rates. However, exemptions may apply under the participation exemption regime for qualifying entities and shareholdings.
Personal Income Tax (PIT)
Luxembourg employs a progressive personal income tax system. The rates are as follows:
- from €0 to €13,230 - 0%
- from €13,231 to €15,435 - 8%
- from €15,436 to €17,640 - 9%
- from €17,641 to €19,845 - 10%
- from €19,846 to €22,050 - 11%
- from €22,051 to €24,255 - 12%
- from €24,256 to €26,550 - 14%
- from €26,551 to €28,845 - 16%
- from €28,846 to €31,140 - 18%
- from €31,141 to €33,435 - 20%
- from €33,436 to €35,730 - 22%
- from €35,731 to €38,025 - 24%
- from €38,026 to €40,320 - 26%
- from €40,321 to €42,615 - 28%
- from €42,616 to €44,910 - 30%
- from €44,911 to €47,205 - 32%
- from €47,206 to €49,500 - 34%
- from €49,501 to €51,795 - 36%
- from €51,796 to €54,090 - 38%
- from €54,091 to €117,450 - 39%
- from €117,451 to €176,160 - 40%
- from €176,161 to €234,870 - 41%
- from €234,871 and above - 42%
Frequently Asked Questions
-
What is a CASP license in Luxembourg?A CASP license is a regulatory authorization required for companies providing cryptocurrency-related services such as exchanges, custodial services, advisory services, etc. in Luxembourg.
-
Who issues the CASP license in Luxembourg?The Commission de Surveillance du Secteur Financier (CSSF) 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 Luxembourg?Companies must meet physical office requirements, requirements for managers and shareholders, minimum capital requirements, documentation requirements.
-
Is it mandatory to have a physical office in Luxembourg to obtain a CASP license?Yes, a local office in Luxembourg 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).
-
What is the process for applying for a CASP license?The process involves submitting an application to the CSSF with detailed documentation on the company structure, management, AML policies, and financial plans, etc.
-
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.
-
Can CASPs provide cross-border services in the EU?Yes, once licensed under MiCA, CASPs can offer services across the EU without needing separate licenses in other Member States.
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Why is a CASP license necessary in Luxembourg?A CASP license ensures compliance with Luxembourg and EU financial regulations under the MiCA Regulation, providing legal security and consumer protection.
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