German Cryptocurrency Licensing System
Germany is one of the most reputable EU jurisdictions for crypto businesses, with licenses issued by BaFin, the Federal Financial Supervisory Authority.
Since 2024, the MiCA regulation has unified rules across the EU, allowing companies to operate in all member states with one license.
A BaFin license ensures compliance with AML/CFT standards, FATF requirements, and EU oversight, making it highly trusted by investors.
For entrepreneurs starting a crypto company here, Germany offers legal clarity, transparency, and strong market credibility.
Licensed Activities
A German crypto license covers custody and wallet management, exchange and trading platforms, fiat and crypto conversion, execution of client orders, ICO/STO placement, investment advice, and portfolio management.
Activities involving asset-referenced tokens and e-money tokens are also regulated. This broad scope makes Germany a key entry point for companies launching exchanges, wallets, or token projects.
Advantages of a German License
A cryptocurrency license issued by BaFin provides companies with a highly competitive position in the European market. The main advantages include:
- EU-wide market access – thanks to MiCA passporting, companies licensed in Germany can provide services across all EU and EEA countries without applying for separate licenses in each jurisdiction.
- Regulatory certainty – Germany operates under a unified framework that clearly defines permissible crypto activities, minimizing legal risks and ensuring consistent compliance requirements.
- Strong market reputation – a BaFin license is recognized internationally as one of the most credible authorizations, which significantly increases investor confidence, improves partnerships with banks, and builds client trust.
- Tax efficiency – while Germany applies a 15.83% corporate tax, long-term investors benefit from a 25% flat capital gains tax rate on crypto assets held for more than one year, providing predictable planning for businesses and their clients.
Combined, these factors make Germany one of the most attractive EU jurisdictions for launching and scaling cryptocurrency exchanges, custodial services, and token-based projects.
Licensing Process and Requirements
To obtain a Germany cryptocurrency license, applicants must register a legal entity in Germany or another EU state, maintain share capital of €125,000–€150,000, and submit a detailed business plan.
They are also required to appoint qualified management along with AML and compliance officers, while all documentation — including IT security and risk management policies — must be prepared in German. BaFin usually reviews applications within 2–3 months, though more complex cases may take longer.
Taxation of Crypto Companies
Crypto businesses in Germany face a 15.83% corporate tax and a 25% capital gains tax on assets held longer than a year. VAT does not apply to most cryptocurrency transactions. Companies must register as taxpayers within one month of commercial registration and comply with ongoing reporting rules.
Why Work with Prifinance
Prifinance provides full-cycle support for obtaining a German crypto license, including company registration, business plan drafting, compliance framework development, and direct interaction with BaFin.
Our experts ensure legal accuracy, secure structuring, and full regulatory compliance for successful EU market entry.
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Credit: www.Newshub360.net
