Crypto License in El Salvador
Without a doubt, El Salvador is an ambassador of crypto and blockchain businesses as one of the pioneers in offering streamlined regulatory frameworks for them. With the help of Fintech Harbor Consulting LTD, you will get insider details about how things work locally and learn how to get the most out of them with a well-thought-out plan.
Contents
What Is El Salvador Crypto License and How Does It Work?
Holding a crypto license in El Salvador is a formal authorization to conduct business legally in the country that was the first to recognize Bitcoin as legal tender. This unique legal approach to regulation emphasizes El Salvador’s openness to innovation and its commitment to helping the digital economy thrive.
To operate legally in this country, businesses must hold a Digital Asset Service Provider (DASP) license. El Salvador crypto law, overseen by the National Commission of Digital Assets (CNAD) and issued by the Central Reserve Bank (BCR), covers a wide range of services, including the license issuance and ensuring companies’ compliance with specific regulatory criteria in the country.
With the crypto license in El Salvador, businesses can engage in the following activities:
- Crypto exchange: Buy, sell, and trade digital assets, both fiat-to-crypto and crypto-to-crypto.
- Trading platforms: Spot trading, tokenized assets, derivatives, and structured digital financial products.
- Custody and wallet services: Authorization for storing, managing, and safeguarding crypto assets.
- Payments and transactions: Facilitate crypto payments, P2P transactions, and transfers between parties.
- Digital asset issuance and tokenization: Issue, structure, and manage ICOs, security tokens, and tokenized real-world assets (RWAs).
- Investment and lending: Crypto-backed loans, provide structured investment products, and DeFi solutions.
- Margin trading and leverage: Since this activity is not explicitly regulated yet, it may require additional approval from CNAD, depending on the business structure.
- ICOs and token offerings: Requires CNAD’s authorization for public offerings.
- Stablecoins and asset-referenced tokens (ARTs): Requires additional regulatory approvals.
With extensive opportunities in the crypto sector, we will guide you through securing your DASP license to ensure your business’s full compliance with AML/KYC regulations and local requirements.
Benefits of Crypto License in El Salvador
As one of the most crypto-friendly markets, El Salvador is a favorable choice for startups and other types of businesses. Here are the key reasons to obtain an El Salvador crypto license:
- Strong legal framework: Benefit from a clear and supportive regulatory environment that fosters crypto innovation and ensures smooth business operations.
- Lucrative tax benefits: Maximize your profits with zero capital gains tax on Bitcoin transactions, allowing you to scale your business without unnecessary tax burdens.
- Seamless banking integration: Gain access to crypto-friendly financial services that simplify transactions, enhance customer onboarding, and strengthen business partnerships.
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Process of Obtaining a Crypto License
The rules for applying for a crypto license depend on the market you want to enter. Our team will guide you through the process, letting you benefit from the local legislation’s opportunities for startups and mature businesses interested in global reach. Here is a step-by-step roadmap for your efficient company launch in El Salvador:
- Sign the service agreement with us to officially begin the entire licensing procedure in this jurisdiction.
- Collect all the required documents and meet the regulatory requirements. We’ll handle the key documentation for you to make your licensing process as smooth and efficient as possible.
- Incorporate your company in the Commercial Registry of El Salvador. This step typically takes between 10 to 14 days. Our team will ensure a seamless interaction with the regulatory authorities to ensure that your market entry is quick, legal, and efficient.
- Once all documentation is prepared and your company is registered, submit your application for review. It takes around 2 months for your documents and application to be reviewed and approved.
- Open a bank account once the license is approved and register with other government agencies, including the Ministry of Labor and the Tax Department. The account setup usually takes 2 months.
- After you receive your license, you can officially provide your crypto services. Keep in mind that the licensing process does not end at the moment you obtain your permit. Rather, it’s crucial that you maintain your business fully compliant with the regulatory standards of El Salvador. Our legal professionals will help you closely monitor any changes in the regulatory requirements and align your company with those.
- Certified copy of the article of incorporation
- Proof of registration with the commercial registry
- Tax identification number (NIT) to enable your company to fulfill its tax obligations
- VAT registration (if applicable)
- A business license authorizing your company to operate lawfully
- Corporate books, including the Shareholders’ Registry Book, Minutes of Shareholders’ Meeting Book, and Financial Books.
- CNAD will also provide an Official Communication Regarding Tax Exemption and Notification of a Resolution.
Requirements for a Crypto License
- Legal entity registration: Register your company with the National Commission on Digital Assets (CNAD).
- Flexible shareholder structure: A minimum of two shareholders, which can be either individuals or legal entities, including both residents and non-residents (with a tax identification number in El Salvador).
- Affordable capital requirement: €1,920 is the minimum authorized capital for interested parties to set up their crypto business in El Salvador.
- Company’s address: A physical address is a preferable option, but a virtual alternative will also work.
- Robust compliance framework: Ensure regulatory adherence with the appointment of two AML compliance officers, reinforcing security and transparency in your operations. Keep in mind that at least one of the AML compliance officers must reside in El Salvador.
Documentation for the DASP License in El Salvador
Before you apply for your El Salvador crypto exchange license, make sure to prepare the complete set of documents:
- Identification of key company positions
- CVs of key personnel
- Business model flowchart
- Business plan
- Documentation on customer service and communication systems
- Risk factors manual
- Internal and external audit policy
- Organizational chart
- Draft contracts or terms and conditions for future clients
- Documentation on digital asset operations
- Anti-Money Laundering (AML) documents.
In addition to the abovementioned documents, the individuals applying for licensing must provide the following:
- Apostilled Power of Attorney (POA) for NIT registration
- Apostilled copy of passport.
For legal entities, the following additional documents are required:
- Apostilled certificate of incorporation and registration proof
- Board appointment credentials with registration proof
- Apostilled bylaws and registration proof
- Apostilled passport copy of the legal representative
- Apostilled POA for NIT registration and incorporation.
While the list of requirements might seem extensive, we are here to support you and make sure every document is taken care of. Our team of expert lawyers will assist you in your licensing process and help you handle the necessary documentation, including the Know Your Customer (KYC) policies, risk monitoring system, due diligence for PEPs and high-risk clients, FIU notification procedure for compliance officer changes, Code of Ethics, Know Your Employee (KYE) policy, and documents archiving and confidentiality procedures. Keep in mind that during the licensing process, the regulator can request additional documents if needed.
Crypto Regulation
El Salvador has earned recognition as a cutting-edge place to do business in cryptocurrencies with the enactment of the Digital Asset Issuance Law (DAI) on January 11, 2023. This pioneering law creates a clear and business-friendly legal framework, positioning the country as one of the most attractive locations for DASP companies. With its innovative approach and clarity in El Salvador crypto regulation, this country offers a unique perspective for crypto businesses looking to operate in a secure and promising environment.
Crypto Taxes in El Salvador
El Salvador’s crypto tax policies prove how pro-crypto this government is. Just check them out in the table below. These features turn this market into a global hotspot for cryptocurrency and blockchain investors and businesses.
| Tax Type | Rate & Application |
| Capital Gains Tax | 0% — no tax on Bitcoin profits |
| Corporate Tax | 15% — for businesses registered in El Salvador |
| Foreign Income Tax | 0% — offshore earnings exempt |
| VAT | 13% — not applied to Bitcoin transactions |
| Income Tax (Personal) | 10-30% — based on your earnings |
Why Choose El Salvador for Crypto Company Registration?
Let’s sum up the major reasons to comply with El Salvador crypto license requirements and choose this destination for launching your company:
- Bitcoin-backed economy: Businesses can freely transact in BTC without restrictions.
- Transparent regulation: Licenses issued by the National Commission of Digital Assets (CNAD).
- 0% capital gains tax and 0% foreign income tax: Keep 100% of your crypto profits — no extra deductions for global crypto operations.
- Quick licensing and efficient maintenance: Get a legal crypto license in just a few weeks and with a straightforward regulatory process. Compliance burdens in El Salvador are lower than in the EU jurisdictions.
- Comprehensive alternative to MiCA: Salvadoran license is a strategic choice for businesses facing strict EU MiCA regulations.
- Crypto-friendly banks: Enjoy easy banking access for licensed crypto companies. Open your bank account in a local Salvadoran bank or European EMIs that accept DASP-licensed businesses.
Consult with our professional lawyers to get the most out of this legislation and ensure your business plan thrives in such a crypto-friendly environment. We’ll guide you through the entire El Salvador crypto license registration process with the best gains in mind.
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FAQ
How long does it take to obtain a crypto license in El Salvador?
The overall timeframe for obtaining the DASP crypto license in El Salvador is under 5 months. It includes the 10 to 14 days of your company incorporation, 2 months of getting your license approved, and 2 months of your bank account setup. If you receive a request to provide additional documentation from the regulatory authority, the timeline might change, depending on your business situation.
What are the costs involved in registering a crypto company in El Salvador?
In total, the El Salvador crypto license cost includes initial registration state fees, governmental expenses for your company incorporation, annual fees and compliance expenses, and additional service fees. For the most accurate breakdown of all costs associated with your DASP license, consult with our lawyers.
Do I need to be a resident of El Salvador to apply for a crypto license?
While you don’t need to be a resident of the country to offer your business deals locally, you must appoint representatives for your project locally. In particular, at least one of your AML compliance officers must reside in El Salvador. As well, both shareholders are required to have a Salvadoran tax identification number, even though they can be non-residents.
What legal requirements must a crypto business meet in El Salvador?
To secure your licensing approval in El Salvador, you must register your company with at least two shareholders and an AML compliance officer, have €1,920 of the minimum share capital, and prepare the complete set of the necessary documentation, including AML & KYC compliance, business plan, internal and external policies, CVs, etc. Make sure to contact our legal professional for thorough assistance with every step of your Salvadoran licensing journey.
What documents do I need for the DASP license in El Salvador?
The list of required documents for obtaining your license in El Salvador includes the following:
- Identification of key company positions
- CVs of key personnel
- Business model flowchart
- Business plan
- Documentation on customer service and communication systems
- Risk factors manual
- Internal and external audit policy
- Organizational chart
- Draft contracts or terms and conditions for future clients
- Documentation on digital asset operations
- Anti-Money Laundering (AML) documents.
Besides the abovementioned documentation, the individuals applying for a Salvadoran crypto license must provide the following documents:
- Apostilled Power of Attorney (POA) for NIT registration
- Apostilled copy of passport.
Also, for legal entities, the following documents are required in addition to the standard list:
- Apostilled certificate of incorporation and registration proof
- Board appointment credentials with registration proof
- Apostilled bylaws and registration proof
- Apostilled passport copy of the legal representative
- Apostilled POA for NIT registration and incorporation.
