Crypto Licensing - Gibraltar

About Gibraltar

When the national authorities enforced the Distributed Ledger Technology Framework (the DLT Framework), containing licencing requirements for crypto and other blockchain-based businesses, Gibraltar became one of the pioneering jurisdictions attempting to infuse clarity into the governance of crypto activities. Today, the country is pushing laws to ensure the integrity of crypto firms and the use of blockchain-based products and services.

There is no crypto-specific tax in Gibraltar, but all crypto enterprises are required to follow standard taxation principles and, in most cases, pay ordinary taxes, which are collected and controlled by the Income Tax Office.

Gibraltar is a British Overseas Territory. It is a peninsular with a land border with Spain, positioned at Europe’s southernmost tip, guarding the entrance to the Mediterranean Sea from the Atlantic Ocean, with Morocco 14 miles across the Straits of Gibraltar.

According to the most recent United Nations estimates, Gibraltar’s current population is 33,663 as of Wednesday, May 3, 2023.

Gibraltar’s law is a blend of common law and legislation, and it is significantly influenced by English law. The English legislation (Application) Act of 1962 states that unless overruled by Gibraltar legislation, English common law will apply to Gibraltar.

Although English is the official language, locals are often bi-lingual, speaking Spanish as well as English. It is not uncommon to hear the native Arabic of Gibraltar’s other nearby neighbours, while Portuguese, Italian, and Russian are also common in certain places.

1. Clarity in Regulation

Gibraltar has a clear regulatory framework in place for digital assets and blockchain technology. Businesses that receive a crypto licence can operate in a controlled environment, assuring compliance with applicable laws and regulations. This regulatory clarity can boost business reputation and offer investors and customers with predictability.

2. Market Access to the EU and EEA 

Under some conditions, Gibraltar’s crypto licences may enable passporting opportunities, allowing enterprises to deliver services across the European Union (EU) and European Economic Area (EEA). This allows for easier market access to a larger client base within the EU and EEA.

3. Investor Satisfaction

The regulatory system in Gibraltar is intended to safeguard investors and promote market integrity. Businesses can boost investor confidence by operating under a crypto licence, which verifies compliance with regulatory standards and provides transparency and consumer safety.

4. Credibility and Reputation

Gibraltar has taken deliberate measures to establish itself as a trustworthy jurisdiction for digital assets and blockchain technology. Holding a crypto license from Gibraltar can increase the brand and credibility of a business, perhaps attracting investors and consumers who value regulatory compliance and consumer protection.

5. Business Adaptability

The regulatory system in Gibraltar tries to promote innovation while retaining proper monitoring. This gives firms the freedom to create new cryptocurrency-related products and services, fostering growth and technical advancement.

6. Taxation Benefits

Gibraltar has a favourable tax framework, which includes a competitive corporate tax rate, no capital gains tax, and no VAT on most crypto-related activity. These tax breaks can boost the profitability and cost-efficiency of enterprises operating in Gibraltar under a crypto licence.

7. Strong Financial Services Infrastructure

Gibraltar has a strong financial services infrastructure, including a strong banking system, knowledgeable legal and financial experts, and access to global markets. This supportive ecosystem can give businesses with the resources and knowledge they need to thrive in the crypto space.

8. Collaborative Regulatory Environment

Gibraltar is well-known for its collaborative regulatory approach. The government, regulatory bodies, and industry stakeholders collaborate to design the regulatory framework and keep it dynamic and responsive to industry changes. This collaborative atmosphere can create possibilities for firms to dialogue and interact with authorities.

General

License: Distributed Ledger Technology Provider
Timeframe for Approval: 3 months
Regulator: Gibraltar Financial Services Commission (GFSC)

Company Structure

Local Director: At least 2 directors (at least 1 director with full voting rights has to be local)
Local Shareholder: At least 1 shareholder (the maximum 50 shareholders) (no nationality or residency restrictions)
Local Registered Office: Required
Local Staff: Required
Compliance Officer: Required
AML/KYC: Required
Audit: Required
Economic Substance: Required
Corporate Tax Rate: 0%
Currency: Pounds Sterling
Capital Requirement: Varies
Gov. App Fee: US$11,000

The steps that follow will be taken in order to receive a licence:

  • Application form preparation
  • Examining and revising the white papers and other policy materials that comprise the application
  • The incorporation of the business
  • Application for a bank account
  • Application for a licence with the Regulator
  • Distributed Ledger Technology (DLT) License
  • Licensing Categories
  • Regulatory Compliance
  • Capital Requirements
  • Governance and Risk Management
  • Cybersecurity Measures
  • Investor Protection
  • Ongoing Supervision and Reporting
  • Passporting Opportunities

For the Organisation:

  • White paper in depth
  • Platform for operations
  • Website
  • The company must present its financial expectations.

For the Applicant:

  • Passport with Notarization
  • Utility Bill that has been Notarized
  • Bank Statement, Certified
  • Two letters of professional recommendation
  • Proof of funding source
  • Non-criminal records that have been notarized
  • CV signed and dated
  • Diploma copies that have been notarized
  1. Formation of international business corporation.
  2. Preparation and drafting of shareholder and officer agreements.
  3. Preparation and drafting of narrative business plan.
  4. Prepare five year financial projections.
  5. Preparation and drafting of current financial statements
  6. Preparation and drafting of personal financial statements for owners.
  7. Identification and draft letters naming principal representative and auditor.
  8. Draft and prepare required bank charter and prospectus
  9. Preparation and drafting application with regulatory authorities.
  10. Respond and draft responses to regulatory authority application inquiries.
  11. Facilitate and consummate bankcard relationship with prepaid card program managers
  12. Preparation and drafting of policy agreements and related documents.
  13. Facilitate and consummate IBAN and correspondent bank relationship
  14. Provide for required physical presence and local director
  15. Preparation and review of client agreements, website disclosures and related agreements.