Cryptocurrency License in Bulgaria: A Comprehensive Guide

Introduction to Cryptocurrency Licensing in Bulgaria

• Tetra Consultants assists international clients in obtaining cryptocurrency licenses in Bulgaria. Our goal is to ensure a smooth establishment of your crypto business while you focus on other critical aspects of your operations.
• The rapid rise of cryptocurrencies like Bitcoin and Ethereum has transformed global financial transactions, attracting significant interest due to their decentralized nature and innovation potential. Bulgaria, with its progressive stance on technology and business, has emerged as a compelling destination for crypto entrepreneurs. The Bulgarian government has implemented a strategic licensing framework to ensure transparency, security, and legal compliance, reflecting the country's commitment to embracing digital currencies while safeguarding stakeholders and fostering economic growth.

👉 Explore Bulgaria's crypto licensing advantages

Benefits of Obtaining a Cryptocurrency License in Bulgaria

Entities applying for a crypto license in Bulgaria can leverage several advantages:

• Progressive Regulatory Environment: Bulgaria offers clear and supportive regulations for crypto businesses, ensuring stability and legal certainty.
• EU Passporting Rights: As an EU member, Bulgaria allows licensed crypto firms to operate across the European Economic Area (EEA), providing access to a vast market.
• Government Support: Initiatives like innovation hubs and tax incentives create a favorable ecosystem for crypto businesses.
• Competitive Costs: Low operational costs compared to other EU countries make Bulgaria an attractive destination.
• Tax Efficiency: Corporate tax rates are among the lowest in the EU, with potential VAT exemptions for certain crypto activities.
• Skilled Workforce: Bulgaria boasts a highly skilled labor pool in tech and finance, ideal for blockchain ventures.
• Investor Confidence: Licensing enhances credibility, attracting both local and international investors.

Legal Framework for Cryptocurrency Licensing

Bulgaria’s crypto licensing is governed by several key laws:

• Anti-Money Laundering (AML) Act: Requires robust AML/KYC procedures for crypto businesses.
• Payment Services and Electronic Money Act: Regulates crypto-related payment services.
• Currency Control Act: Oversees foreign exchange transactions involving cryptocurrencies.

• EU Directives: Compliance with EU-wide regulations like the 5th AML Directive (5AMLD), which mandates:

  • Customer due diligence (simplified, enhanced, or complex levels).
  • Record-keeping of transactions.
  • Risk assessments for financial crimes.
  • Reporting transactions exceeding BGN 30,000 (~€15,000).

Permitted Activities Under a Bulgarian Crypto License

• Cryptocurrency exchange services (trading pairs with fiat/crypto).
• Custody and wallet services (secure storage of digital assets).
• Crypto payment processing (merchant services, remittances).
• Consulting (investment advice, market analysis).

Financial Supervision Commission (FSC): The Regulator

The FSC oversees crypto licensing in Bulgaria by:

• Evaluating applications and business plans.
• Ensuring compliance with AML/CFT measures.
• Conducting ongoing supervision of licensed entities.

👉 Learn more about FSC requirements

Requirements for Obtaining a Crypto License

• Company Structure: Typically an LLC (OOD) with:

  • Minimum capital: BGN 2 (~€1).
  • Local director and registered office.
  • Corporate secretary.
• Documentation: Business plan, AML policies, financial statements, and shareholder details.

Step-by-Step Licensing Process

1. Company Incorporation (2 weeks).
2. Drafting Policies (AML/KYC, business plan).
3. Meeting Substance Requirements (local staff/office).
4. Bank Account Opening (corporate account with Bulgarian bank).
5. FSC Application Submission (2–3 months for approval).

Required Documents

• Application form.
• Business plan.
• Corporate documents (memorandum, Articles of Association).
• ID/address proofs for directors/shareholders.
• Compliance policies (AML/CFT).
• Payment account details and service descriptions.

Tax Implications

• Corporate Tax: 10% standard rate (15% for short-term asset sales).
• VAT: Exempt for crypto transactions; applicable for services.
• Withholding Tax: 10% (reduced per tax treaties).
• PIT: 10–29% for crypto-derived income.

Timeline & Costs

• Processing Time: ~3 months (FSC review).
• Estimated Fees: Includes incorporation, licensing, and advisory costs (transparent pricing provided upfront).

FAQs

1. How long does it take to get a crypto license in Bulgaria?

Approval typically takes 2–3 months after submitting a complete application.

2. Can EU companies passport their crypto services to Bulgaria?

Yes, under EU passporting rights, but local registration may still be required.

3. What’s the minimum capital for a Bulgarian crypto LLC?

BGN 2 (~€1).

4. Are there VAT exemptions for crypto businesses?

Yes, for certain activities like crypto-to-crypto exchanges.

5. Does Bulgaria tax crypto trading profits?

Yes, at 10% corporate tax (or 15% for short-term trades).

Contact Tetra Consultants for personalized assistance in obtaining your Bulgarian cryptocurrency license. Our team responds within 24 hours.