Crypto license in Portugal

Portugal has become one of the most attractive jurisdictions for cryptocurrency companies due to its favorable regulatory environment and tax benefits. The license for cryptocurrency activities in Portugal is issued by the Central Bank of Portugal (Banco de Portugal). This regulatory body is responsible for supervising cryptocurrency companies and ensuring their compliance with legal requirements.

Advantages

1. Tax Benefits: Portugal offers favorable tax conditions for cryptocurrency operations. Crypto holders are not subject to capital gains tax, which is a significant advantage for investors.
2. Transparent Regulatory Requirements: The regulatory environment in Portugal is clear and understandable, simplifying the licensing process.
3. High Level of Financial Services: Portugal has a well-developed financial infrastructure that supports innovative financial technologies, including cryptocurrencies.
4. Access to the European Market: A license obtained in Portugal allows companies to operate in other EU countries thanks to the passporting principle.

Disadvantages

1. Complex Licensing Process: While the requirements are clear, the process of obtaining a license can be quite complex and resource-intensive.
2. Regulatory Changes: The rapidly evolving cryptocurrency market can lead to frequent legislative changes that companies must quickly adapt to.
3. Competition: The growing popularity of Portugal as a crypto hub leads to increased competition among companies seeking a license.

Key Requirements

1. Company Registration: The company must be registered in Portugal and comply with all national legislation.
2. Financial Plan: A detailed financial plan must be submitted, including information on funding sources, expected revenues, and expenses.
3. AML/KYC Compliance: Mandatory adherence to Anti-Money Laundering (AML) policies and Know Your Customer (KYC) procedures.
4. Relevant Experience: The management team should have experience in finance and cryptocurrencies. Specifically, this includes:

• Finance: Prior roles in financial management, banking, investment management, or similar fields, demonstrating an understanding of financial regulations, risk management, and strategic financial planning.
• Cryptocurrencies: Experience in blockchain technology, cryptocurrency trading, digital asset management, or running a crypto-related business. 

Taxes

1. Capital Gains Tax: One of the biggest advantages for individuals in Portugal is the absence of capital gains tax on cryptocurrency operations. This means that private investors are not required to pay taxes on profits made from buying and selling cryptocurrencies.
2. Corporate Tax: Companies conducting cryptocurrency activities are subject to the standard corporate tax, which is currently 21%. Additional local taxes may apply, ranging from 1.5% to 3%.
3. VAT: Cryptocurrency transactions are generally not subject to VAT as they are considered financial services. However, services related to cryptocurrencies, such as consulting or software, may be subject to the standard VAT rate of 23%.
4. Social Contributions: Companies are required to pay social contributions for their employees. The rate for employers is approximately 23.75% of employees’ salaries.

Features

• Cryptocurrency Exchange License: This license allows companies to exchange cryptocurrencies for fiat money and vice versa.
• Cryptocurrency Wallet License: Allows providing cryptocurrency storage services for clients.
• Tax Obligations: While capital gains from cryptocurrencies are not taxed, companies must pay corporate taxes and other taxes in accordance with national legislation.

Conclusion

Obtaining a crypto license in Portugal is a beneficial step for companies looking to develop their business in the cryptocurrency sector. The transparent regulatory environment, tax benefits, and access to the European market make this jurisdiction attractive for investors and entrepreneurs. However, it is important to consider the complexity of the licensing process and rapid legislative changes to successfully adapt to new market conditions.

If you need a gambling license in Portugal, contact SBSB Fintech Lawyers. We have been specializing in FinTech and Crypto and Gambling projects since 2013, providing tailor-made solutions for each client, taking into account the company’s business model. We will help you choose the most appropriate license type and prepare the necessary documents to legalize your gambling business and obtain a gambling license in Portugal following the law, providing full legal support.