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A Crypto-Asset Service Provider (CASP) authorisation is legally mandatory to operate most crypto businesses in Bulgaria. Now, market members have strict but comprehensive rules and must navigate a demanding licensing process. The SBSB team of fintech lawyers has many years of experience in crypto licensing in EU member states, including the Netherlands, Malta, and Bulgaria. We are ready to render assistance throughout the entire process, from scratch.
What Is a CASP License in Bulgaria?
In 2023, the Markets in Crypto-Assets Regulation (MiCAR) was adopted in the European Union to establish a single, consolidated regulating and licensing framework for crypto-asset service providers in the European Union, including Bulgaria. Now, to run a crypto-asset business in Bulgaria and across the EU, service providers must hold a CASP license. To start with, they must define the scope of services and apply for a license that covers them. According to Article 3, paragraph 1 of MiCAR, crypto-asset services involve providing the following:
- providing custody and administration of crypto-assets on behalf of clients;
- operation of a trading platform for crypto-assets;
- exchange of crypto-assets for funds;
- exchange of crypto-assets for other crypto-assets;
- execution of orders for crypto-assets on behalf of clients;
- placing of crypto-assets;
- reception and transmission of orders for crypto-assets on behalf of clients;
- providing advice on crypto-assets;
- providing portfolio management on crypto-assets;
- providing transfer services for crypto-assets on behalf of clients
Businesses benefit from the license, enhancing their trustworthiness, reliability, and reputation in the crypto-asset market.
How Is Cryptocurrency Regulated in Bulgaria?
In Bulgaria, the authorities aim to ensure a well-regulated crypto-asset market, easy and legal licensing, and reliable monitoring. Additionally, the Bulgarian Parliament adopted the Markets in Crypto-Assets Act to adjust local laws to the regulation. It designates the Financial Supervision Commission (FSC) as the competent authority for most CASPs. Also, the Bulgarian National Bank is involved. The BNB oversees only issuers of electronic money tokens.
What Are the Benefits of Getting a Crypto License in Bulgaria?
Applying for a CASP license in Bulgaria is fully remote but requires creating and applying e-signatures. To assist applicants, the FSC has released extensive guidance with application templates. Foreign companies can easily obtain a CASP license in Bulgaria, as they are permitted 100% ownership of Bulgarian crypto-asset entities.
What Are the Advantages of a CASP License in Bulgaria?
The license allows CASPs to offer services across the EU under the comprehensive legal and regulatory framework instead of adapting to 27 different national requirements. No local approvals are needed. However, the greatest and unique advantage is ultra-low operational costs and the EU’s lowest corporate tax rate (10%).
What Are the Requirements for Obtaining a CASP License in Bulgaria?
When obtaining a CASP license in Bulgaria, a service provider must establish a local entity, a Bulgarian Limited Liability Company (OOD or EOOD), with physical substance and a corporate bank account, opened in Bulgaria. Only virtual addresses are not sufficient. Then, share capital should be deposited, according to the specified range.
An important requirement is having robust AML/ICT frameworks. The FSC requires at least one top manager to reside in Bulgaria. Also, a CASP must develop AML/ICT policies, integrate the required AML software and CT infrastructure for real-time monitoring, and arrange reports to meet the requirements of regulatory inspections.
Before applying for authorisation, a CASP must prepare a package of documents, including a business plan, a description of services, foundational documentation, information about the shareholders and top managers, prudential safeguarding, AML/CFT, and other policies.
What Are the Capital and AML/KYC Requirements for CASPs in Bulgaria?
Under MiCAR, CASPs must deposit a minimum share capital in accordance with the class of a license:
- Class 1 — €50,000;
- Class 2 — €125,000
- Class 3 — €150,000.
Additionally, CASPs must adopt AML/KYC policies, assess risks, verify the identity of all customers, monitor transactions for suspicious activities, and check high-risk clients, PEPs, etc. An AML officer must be appointed to perform these verifications and prepare reports for the State Agency for National Security’s Financial Intelligence Directorate.
How Does the CASP Licensing Process Work in Bulgaria?
In Bulgaria, the MiCA regime is new, compared with Germany and Austria, which were among the first to process and grant CASP licenses. That is why the licensing process is not polished yet. What is more, management and shareholders undergo strict fit-and-proper assessments. You may need some assistance, and SBSB fintech lawyers are ready to render.
The timeline for authorisation can be broken down into two stages: preparation of a set of documents to submit and their review and processing by the competent authority.
What Are the Steps to Apply for a CASP License in Bulgaria?
The applicant must apply for a license through the FSC under MiCA. But the whole licensing process is broader. A CASP must take the following steps:
- Define the scope of services and develop a business plan.
- Register the company and the registered office.
- Appoint at least one local director and skilled top managers with a solid reputation.
- Deposit the capital with an institution.
- Complete and adopt MiCA compliance policies.
- Collect documents and prepare an application package.
- File for a license and handle FSC’s additional requests, if any.
- Obtain the CASP license.
Because of the recent introduction of the practice in Bulgaria, it is difficult to estimate the timeline. Currently, the Bulgarian authorities may review documents for about 2–6 months.
How Is a CASP Company Incorporated in Bulgaria?
To register a local company, an individual must choose a preferred corporate structure. A limited liability company is the most popular option. Then, a CASP must draft the foundational documents, ensure that the name of the company is available, appoint a director, open a capital bank account at a Bulgarian bank, and deposit the minimum share capital, which is about €1.
Finally, he must file the application with incorporated documentation to the Bulgarian Commercial Register via the Bulgarian Registry Agency. In 1 to 3 business days, a CASP receives a unique Unified Identification Code and must declare the company’s Ultimate Beneficial Owners to the registry.
How Does the Application Submission Process Work in Bulgaria?
To issue a CASP license Bulgaria authorities perform a rigorous check of the data provided by an applicant. Documents must be written in Bulgarian. Also, bilingual or translated papers may be required. If choosing a remote communication channel, an applicant must use a qualified electronic signature. It is possible to use physical delivery to the FSC’s official registry.
How Does the Regulatory Review Process Work in Bulgaria?
In Bulgaria, the regulatory review process for obtaining a CASP license is governed by MiCA and supervised by the FSC. The FSC inspires applicants to communicate openly at preliminary reviews to clarify requirements. Such meetings can be both in-person and virtual.
What Happens After CASP License Approval in Bulgaria?
The final FSC’s decision is sent to an applicant through the communication channel they used for communication. A licensed CASP is immediately entered into the FSC’s public register and can provide licensed services.
What Is the Tax Regime for Crypto Businesses in Bulgaria?
In Bulgaria, a CASP is expected to pay a 10% corporate income tax rate. The tax applies to profits generated from crypto-related activities.
Most crypto-asset services are treated as VAT-free. If there are VAT liabilities, a CASP pays 20%, which is the standard rate in the country.
What Should You Know Before Applying for a CASP License in Bulgaria?
In Bulgaria, a CASP license can be obtained only on the condition of high MiCA compliance. Before submitting, you should explore these requirements in detail and understand the class of your license that covers the restricted scope of services. Also, you should be ready to prepare a set of documents and negotiate with the regulator during the review process. If it sounds confusing, the SBSB team of fintech lawyers is always by your side to offer professional help!
FAQ About CASP License in Bulgaria
How are crypto‑asset service providers regulated in Bulgaria?
Bulgaria is aligning its national framework with the EU’s MiCA regulation, meaning CASP providers must comply with MiCA rules alongside local legislation on financial services and AML/CFT.
Do crypto‑asset businesses in Bulgaria need a CASP license?
Professional providers of crypto‑asset services such as exchange, custody, and trading will be required to obtain CASP authorisation once MiCA is fully implemented and national transposition measures take effect.
Which authority is expected to supervise CASP providers in Bulgaria?
Supervision of CASP providers in Bulgaria is linked to the country’s existing financial market regulators, which oversee investment and financial services and will apply MiCA standards to crypto‑asset activities.
What are the main compliance obligations for CASP businesses in Bulgaria?
CASP businesses must implement robust AML/CFT controls, governance and risk‑management frameworks, secure IT systems, and transparent reporting structures, in line with MiCA and Bulgarian financial services law.
Does a Bulgarian CASP license provide access to other EU markets?
Yes, once a crypto‑asset service provider is authorised as a CASP in Bulgaria, MiCA passporting rules allow it to offer its regulated services across other EU member states without obtaining separate local licenses.
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