11 Aug 2022

Around the world and especially in Europe, there are a number of jurisdictions that have demonstrated a willingness to embrace blockchain and crypto and encourage companies from that industry to do business within their borders. In our previous article, we examined some of the factors that make Bulgaria one such destination. In that piece, we discussed, among other things, the simple and easy registration process that exists in the country. 

In this follow-up article, we’ll be examining in further detail the regulatory and legal requirements that you’ll need to meet in order to open a crypto business in Bulgaria. We’ll also be looking at how an experienced legal advisor like LimeLegal can help you in such an undertaking. So let’s dive in.

Registration in Bulgaria – fast and straightforward

One of the big advantages of Bulgaria is that the existing laws in the country already cover the most common crypto business models. The Measures Against Money Laundering Act (MAMLA) defines a ‘custodian wallet provider’ as an individual or a legal entity that provides services to safeguard cryptographic keys on behalf of their customers, to hold, store and transfer virtual currencies. Any entity that seeks to provide such services can submit an application to the relevant authorities to become a  custodian wallet provider. Obtaining a custodian wallet provider license will be enough to start a crypto business in Bulgaria unless the business operations involve fiat-to-crypto transactions. If handling such transactions is part of your business model, you’ll also need to acquire a service license for exchange between virtual and recognized (fiat) currencies.

The procedure for acquiring a custodian wallet provider license is fairly straightforward, but there are certain criteria that must be met. Firstly, like other businesses operating in Bulgaria, a custodial wallet provider has to be registered with the National Revenue Agency (NRA) in order to operate in the country. The registration process involves submitting an electronically signed online application containing relevant information about the business such as information about the company’s activity in the country, local headquarters, bank accounts, etc. Т.That information is then filed in a public registry maintained by the NRA.  Any subsequent changes in that information must be communicated to the NRA within 14 days. There shall be AML internal rules in place, however, an AML compliance officer contracted by the company is not required for the purposes of the procedure.

Once the service provider has submitted the required information and met the relevant criteria, the subsequent registration process is completed within 14 days, which is extremely fast compared to other jurisdictions. Once the service provider has been registered with the NRA, it can start operating. The registration fee paid to the NRA is only €25. This is in stark contrast with most other European destinations where registration fees can reach upwards of €10,000. In addition, opening a limited company in Bulgaria requires virtually no initial capital.

To summarize, the advantages of Bulgaria as a crypto and blockchain destination are as follows:

  • Fast registration process;
  • Straightforward procedure;
  • Low registration fees;
  • Virtually no initial capital is needed;
  • No AML compliance officer is needed for the purpose of the registration.

At LimeLegal, we have the legal and technical expertise to aid our clients during the registration process in a variety of ways, including helping them prepare the necessary documents, submitting the documentation to the NRA, and maintaining frequent communication with the agency throughout the process.

AML/KYC requirements

In terms of anti-money-laundering and know-your-customers rules, Bulgaria follows the guidelines provided by EU regulatory bodies.

Companies are required to employ a number of measures to prevent money laundering.

Those measures include: verifying customer identity; collecting and maintaining relevant information and documentation; assessing the risk of money laundering; disclosing information about any suspicious activity with the relevant authorities; implementing systems and procedures for control and prevention of money laundering and ensuring proper training for their staff, among other things.

Ready for business in Bulgaria

The straightforward registration process, coupled with Bulgaria’s 10% flat corporate income rate – the lowest in the EU, makes the country one of the best destinations for opening a crypto-related business and companies are starting to realize that. Just recently, we helped one of our clients, crypto payments provider Kasta, to acquire a crypto license in Bulgaria. Kasta announced the development earlier this year, writing in a LinkedIn post:

We are proud to announce that we have received our first European Virtual #Currency License in Bulgaria. This will hopefully be the first of many #crypto licenses for #Kasta!

Currently, LimeLegal is working to help other crypto innovators to register in Bulgaria. If you have a promising crypto startup and seek to acquire an operational license in an EU member state, do not hesitate to get in touch with us at [email protected]!


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