Crypto license in Bulgaria

What Are the Requirements for Obtaining a CASP License in Bulgaria?

To obtain a CASP license in Bulgaria, a service provider must have true local presence, which is an important Bulgaria-specific feature. It means that an applicant must:

• have its registered office in Bulgaria;
• handle a segment of its crypto-asset-related workflow in Bulgaria;
• have at least one executive officer residing in Bulgaria and fully dedicated to the CASP’s activities;
• have part of its staff actually working in Bulgaria; 
• have part of its clients consisting of Bulgarian natural or legal persons.

The FSC also says that specified key functions may be outsourced within the EU. But a licensed entity cannot fully outsource core or critical key functions, such as risk management, internal audit, AML/CFT compliance, etc., in a way that abdicates regulatory responsibility or creates a hollow shell company.

To apply for a licence, an entity must prepare and submit a package of documents that includes the following:

• a formal application;
• corporate and statutory documents;
• information about a director and top managers;
• sources of own funds;
• governance and organisational structure;
• a three-year business plan;
• AML/CFT policies and risk management strategy;
• documents describing IT systems and internal security measures.

The business plan must meet the regulator’s requirements. It must include a realistic business model.

What Are the Capital and AML/KYC Requirements for CASPs in Bulgaria?

In Bulgaria, CASPs must comply with strict AML/CFT and KYC requirements. They must identify and verify their customers, whether individuals or corporate clients. They collect information that includes a customer’s name, residence or registered address, the legal form of an entity, the information about a person acting on its behalf, etc. Suspicious operations and transactions must be reported to the Financial Intelligence Directorate (FID) of the State Agency for National Security.

The minimum own-fund requirements depend on the CASP service class. Services are divided into three classes with minimum requirements of EUR 50,000, EUR 125,000, and EUR 150,000, respectively.

How Does the CASP Licensing Process Work in Bulgaria?

The normal MiCA Article 63 procedure applies. Once an application package is submitted to the FSC, the authority acknowledges receipt within 5 working days. Within the next 25 working days, the regulator conducts a completeness check.

If everything meets general requirements, a substantive assessment of the applicant is conducted and must be completed within 40 working days. While the statutory framework is roughly 3 months, incomplete applications or interruptions may extend the process. Actually, the process takes up to 8 months.

What Are the Steps to Apply for a CASP License in Bulgaria?

Before obtaining a CASP license in Bulgaria, a business must:

1. Incorporate a legal entity in Bulgaria.
2. Prepare and submit the application package to the FSC. 
3. Communicate with the regulator and provide any additional information.
4. Receive the FSC’s information about the decision.
5. Obtain the license.

The FSC must issue notification within 5 working days of making a decision. Applicants registered with the EIS can track the progress of the authorisation procedure through the EIS.

How Is a CASP Company Incorporated in Bulgaria?

To set up a Bulgarian legal entity, businesses choose from the most common forms, such as a single-member limited liability company (EOOD) or a limited liability company (OOD). An applicant is expected to do the following:

1. Choose a company name.
2. Appoint a director and managers.
3. Prepare the constitutional documents.
4. Open a temporary capital account at a Bulgarian bank.
5. Deposit the share capital (EUR 1 for OODs/EOODs).
6. Prepare and submit the registration documents (electronically or on paper) to the Bulgarian Registry Agency.
7. In about 2 weeks, receive a unique company identification number (UIC) and notification about entry in the Commercial Register.

After registration, the temporary capital account is converted into a regular business bank account for the company’s ongoing operations.

How Does the CASP Application Submission Work?

All documents, including the application and supporting documentation, must be prepared in Bulgarian. Declarations signed by foreign nationals must be submitted in bilingual form. Documents may be submitted:

• In person. The application is submitted at the premises of the Financial Supervision Commission (FSC) in Sofia.
• Electronically. The applicant uploads the application and supporting documents through the FSC’s Unified Information System (EIS) or by email to the FSC’s document-registration address.

If documents are submitted electronically, they must be signed with a qualified electronic signature.

How Does the Review Process Work?

The FSC assesses whether the applicant complies with MiCA’s requirements. The review is not just a document check. The regulator looks at the applicant’s business model, governance, management, shareholders, financial resources, internal controls, AML/CFT risk management, and other organisational arrangements. The FSC may request additional information or clarification, where necessary.

Applicants can request a meeting with the regulator. The FSC invites businesses to meetings to guide on preparing their licensing documentation.