Amid tighter regulation and governments’ growing interest in building bitcoin reserves, more firms are hunting for jurisdictions with a tolerant approach to digital assets—minimal red tape and clear rules.
In this article, together with Yulia Barabash, managing partner at the law firm SBSB Fintech Lawyers, we examine the key questions around crypto-business licensing in 2025. We assess operating in the EU after the introduction of Markets in Crypto-Assets (MiCA) and look at promising alternatives: El Salvador, Argentina, Bosnia and Herzegovina, and the Seychelles. We also consider unlicensed options: Panama and Costa Rica.
European Union: the MiCA era
From January 2025 the European Union (EU) brought MiCA into force. The regulation harmonised requirements for providers of crypto-asset services (Crypto-asset Service Providers, CASPs) across the EU and effectively replaced previously existing local regimes.
“It is important to note at the outset that the EU provides for hefty fines for non-compliance with MiCA. The size depends on the nature of the breach and is set by each EU member state. For example, for providing CASP services without a licence, local regulators may impose an administrative fine of up to €5m or up to 5% of the company’s total annual turnover according to the latest financial statements,” says Barabash.
Lawyers at SBSB Fintech Lawyers give several examples:
- Czechia. For providing crypto-asset services without a licence, fines can reach 16,587,000 Czech crowns (~€661,000);
- Lithuania. Breaches of Regulation (EU) 2023/1114 are punishable by fines of up to €5m or 5% of annual turnover. For operating as a CASP without a licence, the regulator imposes a fine of up to twice the unlawfully obtained income or material benefit;
- Malta. For providing crypto services without a licence, the MFSA may impose a fine of up to twice the amount of the profit gained or loss avoided. Maximum penalties: for individuals—up to €700,000; for legal entities—up to €5m or 5% of annual turnover.
Firms already operating as CASPs before 2025 received a transitional benefit. They may continue to operate while their MiCA licence application is under review. The duration of the transition varies:
Each EU country may set the length of the transition period, but it may not exceed 18 months.
European companies registered as VASPs (Virtual Asset Service Providers) under FATF standards before December 30th 2024 may also use the transition period to adapt to MiCA and apply for CASP status in 2025 or 2026.
Several firms have already obtained CASP licences, including:
- Boerse Stuttgart Digital (Germany);
- Bitpanda (Austria, Germany, Malta);
- MoonPay, BitStaete, FinTech ZBD, Hidden Road (Netherlands);
- OKX (Malta).
“A crucial nuance: MiCA requires any crypto company serving EU clients to obtain CASP authorisation. The only exception is when the user themselves initiates contact with a company outside the Union. This is called reverse solicitation,” Barabash stresses.
Under reverse solicitation, companies outside the EU may not actively promote their services in member states. Prohibitions include:
- SEO optimisation for European regions;
- geo-targeted advertising to EU users;
- websites in official EU languages without a justified need;
- sponsoring European events;
- redirecting EU users to your website.
“If your target audience is in EU countries, you need to obtain a CASP licence for the relevant services in the company’s country of registration,” says the managing partner of SBSB Fintech Lawyers.
To obtain CASP status, companies must meet the following requirements:
- have at least one EU-resident director;
- maintain a physical office in the EU with staffing commensurate with the scale and nature of the business;
- hold capital from €50,000 to €150,000 depending on the services offered;
- implement the necessary policies: internal control, conflicts-of-interest management, AML/CFT.
Once authorised, a CASP may passport its services across all EU member states.
Legal support for a MiCA licence includes a preliminary assessment of the business, preparation of the necessary documents and a step-by-step action plan.
“This is quite an expensive process. Costs range from €30,000 to €60,000 depending on the services offered. In addition, the EU has brought into force DORA, which imposes obligations on CASPs to maintain the resilience, stability and security of ICT systems. This will also affect ongoing project expenses,” the SBSB Fintech Lawyers team notes.
They expect the European market will be accessible mainly to larger players able to meet and fund a broad set of regulatory demands.
Preparing documentation typically takes two to three months; obtaining the licence itself takes around six months, depending on the EU country.
More on MiCA and securing a crypto licence in the EU is available on the SBSB Fintech Lawyers website.
El Salvador: a bitcoin hub and Tether’s choice
El Salvador was an early mover in crypto regulation. In 2021 the government legalised bitcoin, and two years later it adopted a law on the issuance of digital assets that made the country an attractive jurisdiction for crypto firms.
Tellingly, in 2025 Tether, the issuer of the largest stablecoin, relocated its headquarters to El Salvador. Exchanges Binance and Bitfinex, and payment services KoiPay and GlobiancePay, also operate there.
The republic offers two licence types:
- Bitcoin Service Provider (BSP)—for companies working with bitcoin (issued by the Central Bank, BCR);
- Digital Asset Service Provider (DASP)—for companies providing services related to other cryptocurrencies (registered with the National Commission on Digital Assets, CNAD).
“Unlike MiCA, El Salvador sets softer requirements for share capital and operations of crypto companies,” notes Barabash.
Other advantages of an El Salvador licence include:
- clear laws and government support. The state actively backs the crypto industry;
- speed. A DASP licence can be obtained relatively quickly;
- easy dealings with the regulator. Authorities respond swiftly to requests and assist when issues arise;
- governance flexibility. Shareholders may be non-residents;
- tax incentives. Income of companies with a DASP licence is exempt from corporate income tax.
Requirements for a DASP licence:
- at least two shareholders. The founder may be any natural or legal person not on sanctions lists and without a criminal record;
- minimum share capital—$2,000;
- a virtual address. A physical office is desirable but not mandatory;
- implementation of cybersecurity standards with an external audit;
- bookkeeping and regular reporting;
- compliance with AML/KYC requirements.
Obtaining a crypto licence in El Salvador takes three to six months and follows this process:
- Register the company with the Commercial Registry.
- Obtain a DASP licence from the CNAD.
- Open a corporate account to pay in the share capital.
- Register with state authorities.
The last step includes registration with the tax authority, the Social Security Institute, and the ministries of labour and finance.
“It is fair to say this is a worthy alternative to MiCA. Registration in El Salvador offers crypto businesses wide opportunities and advantages. At the same time, the timelines (around six months) and indicative support costs (about €25,000) require projects to be ready for notable time and financial outlays,” conclude SBSB Fintech Lawyers.
More on securing a crypto licence in El Salvador is available on the company’s website.
Argentina: a favourable climate for crypto start-ups
According to Yulia Barabash, Argentina is becoming ever more popular with crypto firms thanks to light-touch requirements and straightforward registration. It is especially appealing to start-ups, as it does not demand significant spending.
Argentine law permits the exchange of digital currencies for fiat and the issuance of stablecoins and tokens backed by other assets. On March 25th 2024 the National Securities Commission (CNV) issued a resolution requiring providers of virtual-asset services (PSAV) to observe FATF AML/CFT recommendations and register in a dedicated registry.
At the time of writing, the following operate in Argentina:
- Binance (Binance Services Latinoamérica S.A. de C.V.);
- Coinbase;
- ByBit;
- Bit2Me.
The whole process—from company formation to registration with the CNV and the UIF—takes up to four months.
Bosnia and Herzegovina: Europe without MiCA
Bosnia and Herzegovina offers an intriguing option for businesses that want to stay in Europe while avoiding MiCA’s strictures. Registration and obtaining virtual-currency service provider (VASP) status is possible in Republika Srpska.
Licence advantages include:
- a simple legal environment. No complex EU regulatory requirements;
- favourable taxation. A flat corporate income tax rate (10%);
- convenient payment solutions. Access to local and European bank accounts;
- an easy start. Minimal share capital and no requirement for a physical office.
At the time of writing, the following operate in the country:
To obtain a licence, applicants need staff, share capital (~$580), a registered office and internal policies. Hiring an accountant and filing tax reports regularly is also mandatory.
The process takes about four months and consists of the following steps:
- Company registration.
- Preparing documents to obtain VASP status.
- Application review and registration.
- Open a bank account.
Each step takes about a month.
“At the moment, this path to a crypto licence is one of the fastest, least expensive and most accessible. If you plan to launch a start-up, it is among the best options,” concludes Barabash.
Seychelles: a regulated haven for crypto business
The Seychelles have long been popular with crypto companies thanks to the lack of strict regulation. In 2024, however, licensing rules came into force, providing legal certainty while preserving many of the jurisdiction’s advantages.
A licence requires at least two directors (one local), qualified staff and meeting fit-and-proper criteria. Companies must have a physical office in the Seychelles and file annual financial statements.
Government fees also apply: €5,000 to file an application and €5,000 as a base annual fee. An additional €5,000 to €25,000 is charged per activity.
The licensing process takes five to nine months.
More information is available on the SBSB Fintech Lawyers website.
Alternatives without licensing
For companies that do not plan to handle fiat funds, there are jurisdictions where crypto activity is not licensed.
Costa Rica. Advantages:
- no minimum capital requirements;
- one shareholder/director is sufficient;
- territorial taxation (no taxes on foreign-source activity);
- no audit/reporting requirements;
- closed registers;
- ability to open a local account.
Projects registered in Costa Rica include SLEX Exchange, Pursa and Coinpay.
Panama. Advantages:
- no capital requirements;
- one shareholder is sufficient;
- three directors are required (no residency requirement);
- territorial taxation;
- no state AML/KYC requirements;
- beneficial-owner confidentiality.
Projects operating in Panama include Polymarket, Mantle Network and Meta Pool.
In both cases, registration is fully remote and takes no more than a week.
“Unlicensed options are cheaper and are ideal for companies that want to test the crypto waters without extra costs,” comment lawyers at SBSB Fintech Lawyers.
Conclusions
When choosing a jurisdiction for a crypto business, consider the legal framework, the state of banking and financial infrastructure, the tax system, and the cost and timing of obtaining a licence.
If a company targets the EU market, it must play by MiCA’s rules. The regime is strict but offers a high degree of user trust. CASP licensing is complex and lengthy, and entails considerable costs. Taking into account capital requirements (€50,000–€150,000), staffing, office, ICT systems and compliance, total launch costs can be around €250,000.
Those wanting to operate in Europe without complying with MiCA should look at Bosnia and Herzegovina. Spending on a local employee and authorisation is modest and within reach of early-stage projects.
Firms aiming at global markets should consider El Salvador, Argentina or the Seychelles—these countries have crypto-friendly laws and low barriers to entry. That said, they require thorough preparation. Depending on services and scale, budgets of €20,000 to €50,000 are needed.
If a project does not handle fiat, Costa Rica and Panama are optimal. Both offer minimal requirements, quick registration, no mandatory licensing and relatively low launch and maintenance costs.
To make the right choice, it is best to consult professionals. The team at SBSB Fintech Lawyers will help select a jurisdiction that fits a company’s activities and provide legal support at every stage of obtaining a crypto licence.