Setting up a cryptocurrency company in Austria can be a promising idea for investors. However, they must comply with the laws and regulations regarding cryptocurrencies and be mindful of the potential market risks that could impact their business operations.
Presently, there is no mandatory crypto license in Austria in this form. However, registration requirements are in place for the cryptocurrency company, and they can be seen as an equivalent of a license, a mandatory condition for functioning.
Our company formation consultants in Austria assist investors who wish to open a cryptocurrency company.
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How to set up a cryptocurrency business in Austria
Choosing the right type of structure and registering the company with the authorities are parts of the incorporation procedure for crypto companies. This process is the same as for any other type of company. We can help you set up a business in Austria, no matter the preferred legal structure.
The incorporation takes place as per the Company Act.
While there is no special crypto exchange license in Austria, the aforementioned registration for certain crypto services providers (such as exchange platforms), can be seen as a licensing step.
Company formation in Austria is performed by following a few key steps:
- Choose the type of company: the limited liability company or GmbH is a suitable option for those who open a cryptocurrency company in Austria;
- Choose the business name and registered address: the name needs to be unique and the registered address needs to be based in Austria;
- Prepare the documents: the company’s Memorandum and Articles of Association, as well as the identification documents of the founders;
- Register the business: the company is registered with the Commercial Register and then it applies for a tax identification number.
What types of services can blockchain and cryptocurrency companies provide in Austria?
Investors who want to open a cryptocurrency company in Austria can set up various business models, among which:
- fintech companies which create blockchain;
- cryptocurrency exchanges;
- companies offering support for cryptocurrency transactions;
- companies issuing cryptocurrency.
When opening this type of company, investors will need to be mindful not only of the laws described above but also of the common practices in the industry.
Launching an ICO, an initial coin offering, is an important step in the existence of a cryptocurrency company and it is used to gather needed funds to support the project (the development of a new token or crypto service).
Investors who wish to launch an ICO will need to prepare the white paper in a matter in which it will inform and attract potential investors and in a lawful manner. The white paper must contain details about the business idea, the intended purpose of the token and the scheduled sale of the token, among others.
If you want to open a cryptocurrency business, our company formation agents in Austria can assist you with the registration of the legal entity.
This type of company can also use a virtual office in Austria.
Licensing requirements related to crypto activities
Although there is no specific requirement for obtaining a Virtual Asset Service Provider (VASP) license in Austria for general crypto activities, entrepreneurs should consider some provisions.
Operating a Bitcoin vending machine may require a license if the company transfers financial assets to a third party. This falls under licensing requirements stipulated by the Payment Services Act 2018. This type of license is not considered a crypto license in Austria.
Additionally, if you open a company in Austria that mines crypto, the company may be considered an Alternative Investment Fund (AIF). Licensing might be required in this case. The Alternative Investment Fund Manager Act (AIFMG) regulates fund managers and their operations.
Services involved in issuing, selling, or transferring virtual currencies, as well as trading and exchange platforms and custodian wallet providers, must register with the Financial Market Authority (FMA). While this is not a license per se, in some way it can be perceived as a crypto exchange license in Austria.
Examples of activities that are subject to supervision from the FMA include the following:
- payment services;
- banking activities;
- e-money activities;
- investment services;
- insurance;
- exchanges.
All of the types of activities above are understood as those provided by using blockchain.
How to obtain the crypto license in Austria
As mentioned above, the VASP license in Austria is not a certification in the traditional sense but rather a registration with the FMA. To obtain authorization, the company must be entered into the relevant register of companies offering virtual asset services.
It is important to know that the process of obtaining a crypto license in Austria will change from January 1, 2025. New cryptocurrency companies must fully comply with MiCA (Markets in Crypto-Assets Regulation) provisions to obtain authorization. The FMA will start accepting formal applications under MiCA starting from October 2024.
Existing companies authorized under the current regime can continue to operate until December 31, 2025, or until they transition to MiCA compliance.
In this context, the new process for obtaining a VASP license in Austria can be quite complex. Our company formation specialists in Austria can offer support in the new procedure, which includes:
- Requesting an initial meeting with the FMA and submitting all required documents;
- Discussing the submitted documents and FMA regulations;
- Depending on the FMA’s feedback, you might be required to make adjustments to your business model to align with their guidelines;
- If the documents and business model are approved, submit the formal authorization application;
- The application will be reviewed and re-examined so that it also complies with the MiCa regulatory framework.
Once accepted, the decision to start yourcryptocurrency company in Austria will be published on the FMA website. After you start your business operations, the FMA will keep overseeing your activities.
Our company registration specialists in Austriacan provide more details about the recent changes.
How are cryptocurrencies treated in Austria?
Cryptocurrencies are legal in Austria, however, they are not perceived as legal tender.
According to the Ministry of Finance, virtual assets are classified as “other intangible commodities”. Under the Directive (EU) 2018/843, “crypto assets” have the following characteristics:
- Are not issued by any central bank or authority;
- New units are created through a process called “mining” within a computer network;
- Transactions are not managed or checked by a central authority;
- All transactions are recorded on a public ledger known as a “blockchain”;
- Transactions generally cannot be reversed;
- Are stored and managed in electronic wallets;
- Operate on a decentralized, peer-to-peer network.
This information is important to entrepreneurs who wish to open a cryptocurrency company in Austria.
A relevant law for those who provide services based on blockchain or cryptocurrency is the Fifth Money Laundering Directive (AMLD5), which defines cryptocurrencies as “financial instruments”.
Other relevant laws are those issued by the European Supervisory Authority, to which Austria adheres as a member of the EU.
Relevant EU authorities that can provide guidance on the legal treatment of types of services include the European Securities and Markets Authority (ESMA) or the European Banking Authority (EBA).
Investors who want to open a cryptocurrency company in Austria can find out more about these relevant laws from our team.
Taxation of cryptocurrency companies in Austria
The types of taxes and contributions cryptocurrency companies in Austria are subject to include:
- 23% corporate income tax;
- 21.13% (in most cases) of the employee’s salary, the social security contribution payable by the employer;
- 3% payroll tax on total salaries and wages that are paid on a monthly basis by companies that have a permanent establishment in the country.
In addition to these, digital currencies are subject to a 27.5% capital gains tax.
These companies will not be asked to register for VAT purposes. However, this can change if the company is also involved in other types of activities.
We recommend getting in touch with one of our taxation experts in Austria to find out more about the general taxes for companies, as well as how income derived from cryptocurrency-related activities is treated.
Statistics about the cryptocurrency market in Austria
Starting a cryptocurrency company in Austria can be a promising idea, especially considering these projected market trends:
- The revenue in Austria’s cryptocurrency market is expected to reach USD 260.6 million in 2024;
- The average revenue per user in 2024 is $69.7;
- The number of cryptocurrency users in Austria is expected to reach 3.76 million by 2025.
We also provide additional services to those who open businesses in the country, such as accounting services in Austria.
Foreign investors who wish to open a cryptocurrency company in Austria can rely on our local advisors for assistance with the company registration procedure in Austria. Do not hesitate to contact us.