Cryptocurrency License in Ireland: An Overview
Cryptocurrency businesses in Ireland are regulated only to a limited extent by the already existing laws. Ireland has turned out to be an attractive destination due to its relatively low corporate taxation structure, tax incentives offered and ease of doing business, providing wide open doors to the entire market of the European Union as the Irish crypto authority allows businesses to provide services to all the member states without the need for applying for new licenses. If you wish to obtain a cryptocurrency license for your business in Ireland, connect with crypto consultants at Enterslice.
Regulatory Framework for Cryptocurrency license in Ireland
The principal legislation governing cryptocurrency or virtual asset management service providers in Ireland is the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, along with its amendments introduced in the years 2013, 2018 and 2021, which have been aligned with the EU’s Fifth Anti-Money Laundering Directive.
Regulatory Authorities for Cryptocurrency license in Ireland
The Central Bank of Ireland is the main authority in Ireland that is responsible for the supervision of credit and financial institutions, including the Virtual Asset Management Service Providers that are operating in or out of Ireland.
A notable effort has been made for the growth of the cryptocurrency industry in Ireland, which is the creation of Irish Blockchain, which is an innovative network industry that supports the development of the blockchain sector in Ireland by sharing information, organising events and promoting success stories to create Ireland as a global hub for crypto businesses.
Advantages of establishing a cryptocurrency company in Ireland
Ireland is one of the most crypto-friendly countries, which is evident from the government’s stance on innovation and a favourable tax structure along with a 3-year corporate income tax exemption. The following are the advantages of establishing a cryptocurrency license in Ireland:
Stable economic environment: Ireland has a stable economic environment which allows corporations from across the world to establish their headquarters in Ireland. One of the oldest BitEx cryptocurrency exchanges developed in Ireland.
Favourable Taxation framework: Ireland offers a favourable tax structure for corporations to establish cryptocurrency businesses in Ireland. This includes significant tax incentives for start-ups and generous capital benefit reliefs in the form of tax reliefs for R&D to the amount of 37.5%.
Competitive operating Costs: Due to the ease of doing business in Ireland, the operational costs for doing business are very lower, making it attractive for companies to register their establishments in Ireland.
Gateway to the entire EU market: Ireland is a part of the EEA, which allows foreign businesses registering in Ireland to have access to the entire EU market.
Ease of Doing Business: Ireland has a very good rank of 23 among 190 countries in the World Bank’s Ease of Doing Business rankings which is an indicator of how inviting and cooperative the economy of Ireland is for doing business in Ireland.
Steps to establish a cryptocurrency company in Ireland
In Ireland, a cryptocurrency company is registered in the form of a Virtual Asset Service Provider with the Central Bank of Ireland. The sole purpose of registration of cryptocurrency companies is the regulation of cryptocurrency companies in accordance with the AML/CFT Rules. An application has to be made to the Central Bank of Ireland to enter the name of the company in the register. Those applicant companies who can certify that they comply with relevant legislation are registered as virtual asset service providers.
The Central Bank of Ireland attempts to process each application in a timely manner. However, this depends on the ability of the applicant company to provide the necessary documentation in a thorough and transparent manner. Currently, there are no specific requirements, and no supervisory fee is charged for the registration of an applicant company.
The major focus of the Central Bank is on AML/CFT compliance, so it is better to take care of the following restrictions before making the application:
- Designing internal AML/CFT policies and control mechanisms according to the scale and complexity of the business
- AML/CFT business risk assessment
- Business Plan demonstrating Transaction Workflows
- Preparation of an organisational chart showing corporate responsibility and how it can ensure compliance with the AML/CFT requirements
- Information on outsourcing service companies and outsourcing roles
The applicant company can also arrange an optional preliminary meeting with the Central Bank of Ireland where the company can ask questions from the Bank and clear its doubts regarding the filing of the virtual asset service provider registration form. The applicants can email their questions to the Central Bank.
The following steps need to be followed in order to obtain a cryptocurrency license in Ireland:
- Submission of a pre-application registration form
The applicant company is required to submit a pre-application registration form to the Central Bank of Ireland and email the form to the address: VASP@centralbank.ie.
- Response from the Central Bank
After filing the pre-registration form, the Central Bank of Ireland emails the applicant company the institution number, reporting date and instructions on how to obtain and file the Virtual Asset Service Provider AML/CFT registration form using the Online Reporting System of the Central Bank of Ireland.
- Submission of the registration form
On filing the Virtual Asset Service Providers AML/CFT registration form along with the supporting documentation by the applicant company, the Central Bank acknowledges the receipts of the registration application by email.
- Assessment by the Central Bank
On receiving the application, the Central Bank of Ireland makes an assessment of the application, checking whether all the required information in the registration form and documentation is complete for the evaluation phase. The Central Bank of Ireland notifies the applicant company via email. The evaluation process of the Bank continues till the time evaluation of the application continues. After submitting all the forms and documentation, if the Bank wants other information, the applicant is required to furnish the same.
- Meeting specific obligations after registration
The Bank may ask to address other issues and meet specific conditions which the applicant is required to meet after registration is done. The applicant is usually given a period of 21 days to satisfy the claims of the Bank. In case the authority refuses to grant the registration certificate, it grants the applicant a time period of 21 days to the applicant to furnish an explanation as to why registration should be granted.
- Decision of the Central Bank
The Central Bank notifies the applicant in writing about its final decision, which can be one of the following:
- Registration with specific conditions
- Denial of Registration
The registration takes effect either on the date of registration or on a later date that has been fixed by the Central Bank of Ireland. The Central Bank of Ireland has the power to cancel the registration at any time in the event of a change in circumstances. The Bank also has the authority to change the date of registration by changing or adding or by repealing a condition if it is necessary for the proper regulation of the Virtual Asset Service Provider. These changes may be introduced to prevent the business from being used for terrorist financing and money laundering. After receiving the Bank’s notice, the now licensee company has a time window of 21 days to explain to the Bank with evidence as to why the proposed changes should not be introduced.
Documents required for obtaining Cryptocurrency License in Ireland
The following documents are required to be furnished to obtain a cryptocurrency license in Ireland:
- Virtual Asset Services Provider AML/CFT Registration Form along with the information providing the required information and demonstrating effective AML/CFT policies and procedures
- An application from every legal entity that is a beneficial owner to the virtual asset service provider applicant
- Demonstrate that all the relevant persons holding leadership positions complete individual questionnaires on physical fitness and integrity and submit their responses electronically through the Online Reporting System
The details regarding the submission of the application forms and supporting documents have been set out in a manual prepared by the Central Bank. The purpose of measuring the person’s fitness and integrity is to ensure that persons occupying key positions and taking pre-decision making functions and controlled functions are competent, capable, honest, ethical, and hold integrity as well as financial prudence.
Taxation of Cryptocurrency Companies in Ireland
The administration of taxes in Ireland is done by the Office of the Revenue Commissioners and tax year for a cryptocurrency company runs from the 6th of April to the 5th of April of the following year. Though Ireland has not specifically imposed taxes on Virtual Asset Management Services Providers, such businesses are still required to pay the following taxes.
Depending on the nature of activities undertaken by the business, the following taxes are applicable to the crypto businesses in Ireland:
Type of Applicable Taxes
Rate of Taxes
Corporate Income Tax
Capital Gains Tax
Dividend Withholding Tax
Social Security Contributions
One of the biggest advantages offered by the Irish taxation system is the 3 year exemption from Corporate Income Taxes for new companies if their Corporation tax due is equal to or less than EUR 40,000 in a single tax year. If the Corporation Tax due lies between EUR 40,000 and 60,000, marginal relief is given to the companies.
There are other tax exemptions from which a cryptocurrency company may benefit in Ireland. They are as follows:
- For cryptocurrencies such as Bitcoin and others, VAT is exempted.
- Qualifying R&D expenditure can generate a 25% tax credit which can be used to offset the Corporation Tax under the R&D tax credit scheme
Steps to establish a cryptocurrency company in Ireland
The following procedure has to be followed step-by-step in order to register a cryptocurrency company in Ireland:
- Reservation of the name of the company
The first step in registering a cryptocurrency company in Ireland begins with reserving a unique name for the company which is not offensive and should also not fall within those parameters specified in the Companies Act 2014.
- Registration of a physical office in Ireland
Registration of a physical office in Ireland is a mandatory requirement to set up a company.
- Preparation of incorporation documents for the company
Preparation of incorporation documents of the company, which include the memorandum of association or the charter before a notary public in Ireland.
- Filling out the application form and submitting it to the CRO
For the registration of a company in Ireland, it is necessary to fill the form A1 and submit the same to the Companies Registration Office (CRO) in Ireland. The CRO has the authority to process the application and register the company in Ireland. CRO usually takes 10 days to register a company and issues a certificate of registration. This process can be done entirely online through the online company registration system.
- Appointment of personnel
The company has to appoint at least one director in the company. Such a director may or may not be a resident of Ireland, but such a person should be a resident in a European Economic Area (EEA) country. If all the directors of the company are residents outside the EEA area, then they are required to become EEA residents first before becoming directors in the Irish companies.
In addition to the appointment of a director in an Irish company, there is also a need to appoint a company secretary who must be an EEA resident. The role of the secretary is to submit annual reports of the company to the CRO. Failure to submit the annual reports within a period of 2 years will result in a mandatory audit of the company and may also result in the imposition of fines.
- Opening a corporate bank account
After the incorporation of a company in Ireland, there is a need to open a corporate bank account in name of the company. Opening a corporate bank account requires a copy of the company's registration certificate, the charter of the company and a copy of the A1 form.
- Registration with the Tax office
It is obligatory on the part of the Irish company to register itself with the Tax Office for tax purposes.
- Application for a Cryptocurrency license
Once all the above-mentioned processes have been concluded, an application to obtain the cryptocurrency license has to be submitted to the Central Bank of Ireland.
Audit requirements for a cryptocurrency company in Ireland
All the cryptocurrency private limited liability companies are required to appoint an auditor and undertake an audit of accounts on an annual basis of their companies. The audited report of the company is supposed to be submitted along with an annual declaration which a company is required to make at least once in a calendar year to the CRO. For a company to be eligible for exemption from auditing, such a company should meet the following criteria:
- The turnover of the company should be less than EUR 8.8 million
- The net worth of the assets of the company should be less than EUR 4.4 million at the end of the financial year
- The Companies (Amendment) Act 1986 should be applicable to the company
- The company should not be a parent company or a subsidiary company
- The average number of employees of company should be up to 50
All the above-mentioned conditions must be applicable to both the current financial year and the previous financial year unless year in which the exemption is sought is the first financial year of the company.