x
Overview
Starting your Crypto Exchange company in the UK is a great choice due to the absence of any specific regulation of the industry by the Financial Conduct Authority. However, it is highly recommended that Crypto Exchange Companies completed an analysis of their planned activity in order to clarify whether the particular Crypto Exchange project complies with the legislation of the United Kingdom.
Timeframe: 9 – 12 months
Minimum paid up capital: There is no specific minimum share capital requirement for obtaining a crypto license in the UK. However, companies must demonstrate sufficient financial stability to meet operational and regulatory demands.
Overview
In April 2022, the UK Government committed to establishing a new regulatory regime for crypto assets, balancing risks and opportunities. On February 1, 2023, a consultation paper was published outlining proposals for this future regime. These build on previous plans from Her Majesty’s Treasury, focusing on stablecoins and cryptoasset financial development. The aim is to position the UK as a leader in cryptoasset technology and innovation, fostering a supportive environment for service providers while protecting consumers and ensuring financial stability.
Comprehensive Guide to Company Incorporation
General information
Company structure
- ▪A minimum of one shareholder is required to establish a crypto business in the UK. The shareholder can be an individual or a corporate entity.
- ▪At least one director is necessary, and this director must be a resident of the UK to ensure compliance with local regulations..
Confidentiality
- ▪Beneficial owners’ details – disclosed to the Authorities
- ▪Shareholders’ details – part of public record
- ▪Directors’ details – part of public record
Taxation
Crypto businesses in the UK are subject to standard corporate tax rates. Capital gains tax applies to the disposal of cryptocurrencies, and income tax is applicable if cryptocurrency is received as payment for goods or services. Mining activities are also considered taxable.
Accounting requirements
- ▪Filing annual report is obligatory
Secretary – Required
Registered office – A physical office in the UK is required. This office serves as the company’s registered address and ensures that the business is managed and controlled from within the country.
Local employees: While there is no strict mandate for local employees, having a local presence with key staff, especially in compliance roles, is highly recommended to meet regulatory expectations and facilitate operations.
- ▪Registration with FCA: Companies must register with the Financial Conduct Authority (FCA) under the AML/CTF crypto asset registration regime.
- ▪Documentation: Prepare and submit necessary documents including business plans, AML/CFT policies, and details of key personnel.
- ▪Application Submission: Complete the application form and pay the registration fee (GBP 2,000 for companies with annual revenues under GBP 250,000, and GBP 10,000 for revenues above this threshold).
- ▪FCA Review: The FCA reviews the application, conducts assessments, and may request additional information.
- ▪Approval: Upon successful review, the FCA grants authorization for the crypto activities.
Key documents required for the application include:
- ▪Directors’ and Shareholders’ Resumes: Confirming experience and qualifications.
- ▪Business Plan: Detailed plan outlining operations and compliance measures.
- ▪AML/CFT Policies: Anti-money laundering and counter-terrorist financing procedures.
- ▪Risk Management Policy: Measures to ensure customer fund safety.
- ▪Marketing Plan: Strategies for customer acquisition and retention.
- ▪Company Structure: Information on corporate structure and outsourcing arrangements.
- ▪IT Systems: Details of IT security policies and procedures.
- ▪Customer Onboarding: Procedures for customer due diligence and enhanced due diligence.
- ▪Transaction Monitoring: Processes for monitoring and reporting transactions.
- ▪Record Keeping: Documentation of procedures for maintaining records and compliance with regulatory requirements.