How to choose the right country to receive a crypto license for your startup in 2025?

Interest in the cryptocurrency market continues to surge, with crypto startups raising $2.4 billion in funding during Q1 of 2024, according to PitchBook. Before these companies can secure investors and successfully launch their products, they must first determine the best jurisdiction for registering their business and acquiring the necessary cryptocurrency licenses. Let’s explore various regions, such as the US, Europe, and Asia, to discover which locations offer the most favorable options.

This article is aimed at those who are choosing the ideal country to establish their first cryptocurrency venture or are thinking about expanding into global markets.

What criteria should you use to choose the best country to register a crypto company?

Regulatory pressure on crypto service providers is increasing. Authorities are imposing hefty fines on crypto companies that operate without proper registration. In 2022, BlockFi was fined $100 million by the SEC for not registering its crypto lending product, which the SEC claimed qualified as a security under US law. BlockFi accepted the fine and agreed to register the product as a security.

In 2023, the SEC targeted Kraken for failing to register the sale and offering of its staking-as-a-service platform for crypto assets. Kraken settled the case by agreeing to pay a $30 million fine and ceasing its staking services for customers in the US.

A similar situation occurred in Europe. In October 2023, the Central Bank of the Netherlands fined Crypto.com €2.85 million for offering crypto services in the country without the required registration for over two years.

Fines for breaches of anti-money laundering (AML) regulations are becoming increasingly common. For instance, Lithuania imposed a €9.3 million fine on the crypto wallet provider Payeer for facilitating transactions with sanctioned Russian banks, violating AML laws.

To avoid fines, it’s crucial for crypto companies to choose countries with favorable conditions and comply with their regulatory requirements from the start. When the lawyers at Stalirov&Co advise crypto startups, they consider nine key criteria that can significantly impact a business:

1. Capital requirements. These vary greatly between countries. For example, in Poland, the minimum required capital for custody services or crypto-fiat exchange is €125,000, whereas in the United Arab Emirates payment and transfer services require a minimum share capital of AED 500,000 (≈ €130,000), while exchange services require AED 1,500,000 (≈ €390,000).
2. Regulatory requirements. This includes the need for a local office, the citizenship of directors, and audit requirements.
3. AML compliance and KYC. The regulations should be carefully considered, including the obligations for AML officers and reporting.
4. Taxes. Look at both general tax rates and special tax regimes for crypto companies.
5. Country reputation. This is crucial for attracting investors or working with partners from other countries.
6. Licensing. Analyzing licensing criteria is essential for ensuring legal compliance, gaining market credibility, managing costs, and securing long-term sustainability.
7. Speed and ease of cryptocurrency company registration. Some countries offer faster and less bureaucratic registration processes.
8. Access to banking services. This is especially important as many traditional banks are still cautious about working with crypto companies, which can complicate opening corporate accounts.
9. Regulatory trends and future changes. It's crucial to account not only for existing regulations but also for any potential future changes that could affect your company’s outlook in both the near and distant future.

For crypto companies looking to establish a global footprint, it may be beneficial to consider setting up operations across multiple countries to optimize compliance and access to different markets.

Crypto companies in the US

If a crypto company wants to offer financial services to US citizens or operate within the US, it needs to obtain the proper licenses. Besides dealing with the extensive and often confusing licensing requirements, there are significant regulatory risks that even the biggest players, like Binance, Kraken, and Coinbase, face. In 2024, the SEC took action against 583 organizations, imposing fines that amounted to $8.2 billion. For instance, Binance admitted to breaching registration regulations and consented to a $4.3 billion penalty.

In January 2025, BitMEX, a global cryptocurrency exchange, was fined $100 million for violating U.S. anti-money laundering (AML) laws. The company failed to comply with the Bank Secrecy Act, which mandates that financial institutions implement anti-money laundering measures. BitMEX was found guilty of deliberately avoiding these regulations to increase its revenue by enabling anonymous transactions. The case emphasizes the growing importance of regulatory compliance within the crypto industry and serves as a cautionary tale for other exchanges operating in the U.S. market.

Once you’ve considered and planned for these risks, we can dive into how to register a company and obtain a license in the US.

Crypto companies in the US are regulated on two levels:

1. Federal level. For AML/CFT compliance, companies are required to register as a Money Services Business (MSB).
2. State level. After registering as an MSB, you need to obtain a Money Transmitter License (MTL) in each state where you’ll provide services.

Steps to register as an MSB on the federal level:

1. Get access to the BSA E-Filing System.
2. Create an account.
3. Complete FinCEN Form 107. You will be required to provide thorough information about your business, such as its legal name, trade name, business address, operations, details of owners/controllers, and the employee in charge of AML compliance.
4. Receive crypto company registration confirmation from FinCEN.

Once federal registration is complete, you must obtain the necessary state licenses. Each state has its own specific criteria for issuing this license. If you want to offer your services throughout the entire US, you must obtain a Money Transmitter License (MTL),which covers the required crypto exchange license,  from each individual state.  Certain states have adjusted their licensing requirements or introduced new crypto-specific frameworks. For instance, New York's BitLicense and Wyoming’s more favorable crypto laws are worth mentioning. Some states may also have modified their fees, bond requirements, or criteria to account for evolving crypto industry standards.

The expense of obtaining a license differs from state to state and includes the following fees:

• Application fees: The cost varies by state. For example, Texas charges $10,000, California charges $5,000, and Delaware charges $403.
• License renewal fees: California charges $2,500, and Delaware charges $230.
• Surety bond: Crypto companies must secure a surety bond to guarantee financial obligations. The business typically pays a percentage (1% to 3%) of the total bond amount. For instance, in Colorado the bond requirement is $1,000,000.

If you're seeking licensing in all states, the total application fees amount to $112,000, and you'll need to secure a surety bond exceeding $10,000,000.

Crypto companies in Europe

Key advantages and challenges for crypto companies in the EU includes:

• Unified regulation. The EU has a single regulatory framework for all member states, making it easier to operate within the internal market.
• High standards. The EU is recognized for its stringent requirements regarding AML, KYC, and data protection (GDPR), which can drive up compliance expenses.
• Tax policy. Tax regimes can vary significantly between member countries.
• Access to banking services. In most EU countries, crypto companies have relatively easy access to banking services.

On April 20, 2023, the European Union approved the MiCA (Markets in Crypto Assets) regulation, which came into force in December 2024. All companies dealing with crypto assets in the EU need to obtain a CASP (Crypto-Asset Service Provider) license to provide services. Under MiCA, a company qualifies as a CASP if it:

• Holds and administers crypto assets for third parties
• Runs a trading platform for crypto assets
• Exchanges crypto assets for fiat currency
• Exchanges between two different crypto assets
• Issues crypto assets
• Accepts, transmits, and executes orders for crypto assets on behalf of third parties
• Provides advice on crypto assets

Under MiCA, all businesses operating with a Virtual Asset Service Provider (VASP) license will need to switch to the new CASP licensing system. To help them make the change, MiCA offers a transition period so these companies can adjust and get the CASP license they need. 

For example, Poland’s VASPs that are registered in the Polish VASP Register by December 30, 2024, may continue their operations under the current regulations until June 30, 2025. After this date, VASPs will need to obtain a CASP license in accordance with MiCA regulations to continue operating. In Malta, the transitional rules allow virtual financial asset service providers who already have a license by December 30, 2024, to continue operating until July 1, 2026, or until they are approved or denied for the CASP license.

Let’s explore one of the most popular EU countries to run the crypto startup.

Poland

Poland has become a leading hub for digital asset companies in the EU. Among the 2,000 crypto companies registered across 27 EU nations, nearly half are located in Poland. Before MiCA, crypto activities in Poland didn’t require a license, making things much easier. There were no inspections, no need to interact with regulators, or explain your business plans. To run a crypto business, all you had to do was choose the right business codes and register them in a special registry. Once this was done, you’d receive a certificate confirming your business registration in Poland.

Now, under MiCA, these rules have changed, and businesses need to comply with the new licensing and regulatory requirements.

Polish companies listed in the Polish VASP Register by December 30, 2024, can continue operating under the current AML laws until the deadline, June 30, 2025. Pay attention, regulators may carry out audits to check how well VASPs are getting ready for MiCA standards. Here’s how it works:

• You’ll get a notice before an audit starts, and there’s a waiting period of 7 to 30 days.
• The notice will say what the audit will focus on, like checking the qualifications of board members or ensuring compliance with AML rules.
• Board members will need to show proof of their qualifications, like training certificates or at least one year of experience in virtual currency activities. A clean criminal record is also required to meet Polish AML regulations.
• If a company refuses to accept the audit, it could be removed from the VASP register.
• It’s a good idea to get your compliance documents in order ahead of time.

To smoothly transition from a VASP to a CASP, companies need to set up a solid compliance framework that meets MiCA’s rules. Here are the main things to keep in mind:

1. Capital Requirements:

MiCA sets different capital levels depending on what services you're offering:

• €50,000 for advisory services and order execution.
• €125,000 for custody services or crypto-to-fiat exchanges.
• €150,000 for running a trading platform.
• CASPs also need to have a capital buffer equal to a quarter of the previous year’s fixed overhead.

2. Cash Account Requirements

CASPs must keep client funds separate from their business assets by holding them in separate cash accounts at approved banks.

3. Documentation Requirements

The European Securities and Markets Authority (ESMA) has detailed guidelines on what documents you need, including:

• Program of Operations: a description of the services you provide, where you operate, your marketing approach, and financial plans.
• Governance Policies: internal controls, company structure, and compliance team roles.
• Business Continuity Plan: plans to keep operations going in case of emergency.
• AML Documentation: policies to handle money laundering and terrorism financing risks.
• Client Asset Segregation Policy: measures to protect client assets.
• Complaints-Handling Procedures: how to manage customer complaints.

Crypto companies in Asia and Oceania

The region offers high growth potential, a well-developed financial infrastructure, strong support for innovation, and a large number of skilled professionals in blockchain and cryptocurrencies.

However, many countries still have uncertain or frequently changing regulations for cryptocurrencies, which can create significant challenges for operating a business and remaining compliant. In certain countries within the region, stringent regulatory practices and substantial financial requirements for licenses and permits can pose obstacles to market entry.

Let's take a look at the countries that our clients often inquire about: the UAE and Singapore.

UAE 

When it comes to the UAE, people often mention free zones like IFZA and DSOA. This is the easiest way to enter the UAE market, but keep in mind that a company can only provide services within the free zone. So, your decision should be based on a clearly defined business plan.

The UAE imposes substantial requirements on crypto companies. The minimum required share capital ranges from AED 500,000  (≈ €130,000) for payment and transfer services to AED 1,500,000  (≈ €390,000) for exchange services with a custodian. If a company provides multiple types of services, the capital must be increased for each type.

The company is required to hold reserve assets equal to the full amount of its liabilities to clients. Besides the capital and reserve assets, you need to have liquid assets that are 1.2 times higher than your monthly operating expenses. For crypto startups, the regulatory body VARA typically requires liquid assets to cover the break-even point.

The company must have at least one board member and one AML officer, with the latter required to be a resident of the UAE. VARA might require increasing the number of AML officers or management staff, such as adding a CFO in addition to the CEO.

It's mandatory to obtain professional insurance, directors & officers insurance, commercial crime/hot wallet insurance, and other insurance required by VARA.

Any crypto business in or from Dubai (except DIFC) must obtain a VARA license before starting operations.

The VARA licensing process includes several steps:

1. Initial сonsultation: Contact VARA to understand the requirements and the type of license needed.
2. Document submission: Prepare and submit detailed documentation, including business plans, financial reports, and compliance policies.
3. Evaluation and examination: VARA will assess the application, conduct interviews, and carry out inspections.
4. Approval and issuance: After approval, the license will be issued, and the company can start operating.

Getting a license can take anywhere from 4 to 12 months and can be pretty expensive. For instance, if you're setting up a crypto custody or exchange business on the UAE mainland, the registration fee is about $30,000, with an annual fee of around $60,000. If you're just doing money transfers and the bank agrees to process them, the registration fee is about $10,000, and the annual fee is around $25,000.

Initially, companies receive an MVP license, which is a preliminary step before issuing a full license (FMP). Bybit, OKX, and Binance followed this path.

Singapore

Just like in the UAE, Singapore has high requirements for crypto companies. The company's structure must include an executive director who is a Singaporean citizen. Another acceptable structure is having a non-executive director who is a Singaporean citizen and an executive director with a work permit. As in the UAE, you also need to hire an AML officer who is a Singapore resident.

Singapore has high physical presence requirements, meaning you’ll need to hire a local director, a team, and rent a physical office. The company’s capital must be SGD 250,000, and you'll need to prove its origin.

To establish a crypto business in Singapore, adhere to the following steps:

1. Register the company.
2. Write a business plan.
3. Designate a director and an AML officer.
4. Lodge an application with the Monetary Authority of Singapore (MAS).
5. Appoint a Case Officer.
6. Verify shareholders.
7. Go through a regulator interview and get pre-approval.
8. Set up a bank account and fund it with the necessary capital.
9. Obtain the license.

Crypto companies in offshore jurisdictions

Here’s why offshore jurisdictions are attractive for crypto companies:

• Favorable regulatory environment. Offshore jurisdictions such as The Bahamas, the Cayman Islands, and the British Virgin Islands often provide clearer, crypto-friendly regulations intended for digital asset businesses.
• Tax advantages. Many offshore jurisdictions offer tax neutrality or significantly lower tax rates on income, profits, or capital gains. For example, the Cayman Islands impose no corporate or capital gains tax, while the British Virgin Islands offer no income tax, inheritance tax, or capital gains tax for businesses.
• Confidentiality and privacy. Many offshore jurisdictions provide high levels of privacy for business owners and shareholders. In places like the  British Virgin Islands, company ownership details are not publicly disclosed, ensuring confidentiality while complying with local regulations.
• Fast and efficient incorporation. Offshore jurisdictions typically offer streamlined incorporation processes for crypto companies, allowing businesses to get up and running quickly.
• Reduced operational costs. In many cases, offshore jurisdictions have lower administrative and operational costs, making them attractive for startups and smaller crypto ventures. For example, in 2017, Binance was registered in George Town, Cayman Islands.

While offshore jurisdictions offer numerous benefits, there are challenges to consider:

• Increased scrutiny. Businesses in offshore jurisdictions may face stricter scrutiny from international regulators or financial institutions.
• Perception issue. Operating in a “tax haven” could lead to reputational risks.

For example, Binance, which was initially set up in the Cayman Islands and Seychelles, ran into major trouble with regulators worldwide because their headquarters were registered in an offshore jurisdiction. In 2021, countries like the UK, Japan, and Germany cracked down on Binance, saying it was operating without the right licenses. Being registered offshore made it harder for the company to show accountability, which damaged its reputation and caused several banking partners to cut ties.

That same year, Deribit, based in Panama, faced pressure to tighten up its compliance measures to keep good relationships with European banks and institutions, showing the risks of operating in a less regulated jurisdiction. Deribit’s choice of Panama as a jurisdiction raised concerns among European regulators about its compliance with AML and KYC requirements.

Let’s explore The Bahamas as a jurisdiction to run a crypto startup.

The first step is to incorporate a company, often an International Business Company, which is a common choice due to its flexibility and international focus.

Once the company is incorporated, it must apply for a business license through the Business Licence Unit. This involves submitting an online application, providing documents like the Certificate of Incorporation, Memorandum and Articles of Association, proof of premises, and details about the company’s ownership structure. 

The licensing fee structure in The Bahamas is as follows:

• Digital asset exchange:
  • Application fee: $6,250
  • Registration fee: $18,750
  • Annual renewal fee: $18,750
• All other digital asset businesses:
  • Application fee: $3,750
  • Registration fee: $12,500
  • Annual renewal fee: $12,500

The approval process can take anywhere from six to 18 months.

Choosing the right country to register your crypto startup and obtain a crypto license is a critical step for your business's success.

As of 2025, the EU offers a more unified and streamlined approach for starting and operating crypto businesses. Under MiCA, companies can benefit from a European-level license, allowing them to operate across the entire EU, and in many cases, without the need for a physical office.

Asian jurisdictions like the UAE and Singapore can provide high levels of support for crypto startups, but they come with significant capital and compliance requirements. The UAE offers opportunities in special economic zones but imposes high requirements for reserve assets. Singapore, on the other hand, provides a stable regulatory environment with clear requirements for local directors and capital.

In the US, although the market is large and promising, licensing requirements and regulatory pressures can be significant. The split between federal and state levels creates additional challenges, requiring substantial resources to meet all regulatory demands.

Offshore jurisdictions, like the Cayman Islands, The Bahamas, and the British Virgin Islands, provide clear frameworks tailored to digital asset businesses, making them attractive hubs for crypto companies. However, the flexibility comes with challenges, including heightened scrutiny from international regulators, potential reputational risks, and difficulties securing banking relationships.

When choosing a country for your crypto startup, it’s crucial to consider all these factors to ensure an effective launch and continued business growth. We recommend thoroughly analyzing not just the current conditions but also potential changes in the regulatory environment to keep your business competitive and compliant with legal standards.