Cryptocurrencies are used more and more often, and as such many countries create dedicated laws for digital asset-related operations. This is also the case in Bahrain in which it is possible to open a cryptocurrency company and obtain a crypto asset service provider license.
Below, our company formation agents in Bahrain explain the business registration procedure, as well as the process of securing a Virtual Asset Service Provider (VASP) license.
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Registering a crypto business in Bahrain
If you want to open a cryptocurrency company in Bahrain, you will follow the regular procedure, meaning:
- selection of the business form (the private limited liability company is recommended);
- drafting of the incorporation papers and their filing with the Companies Register;
- registering for taxation;
- applying for the Bahraini crypto license.
Out of all these stages, the last one is probably the most challenging, however, our lawyers in Bahrain can help understand the legislation regarding it.
If you are wondering if you can set up a cryptocurrency company as a foreigner, the answer is yes. You can do that as part of the process for immigration to Bahrain. This way, you will also obtain residency in Bahrain and become a business owner.
The Virtual Asset Service Provider (VASP) license in Bahrain
Also known as the crypto license in Bahrain, this special business permit is issued by the Central Bank. It can be obtained by both natural persons and companies seeking to conduct virtual asset-relates operations on behalf of other parties.
In the case of individuals, the minimum age for applying for the Virtual Asset Service Provider license is 21. In the case of companies, both local and foreign operators’ applications are accepted by the Central Bank.
The following activities can be undertaken by the holder of a VASP license in Bahrain:
- virtual assets and regular currency exchanges;
- exchange between various forms of virtual assets;
- transfers of digital assets;
- administration or preservation of digital coins or other instruments allowing the control of virtual money;
- financial services provisions to virtual asset issuers or sellers.
If you want to set up a company in Bahrain that deals in any of the activities above, you can rely on our local agents for support with its incorporation.
Types of crypto licenses in Bahrain
The National Bank issues 4 categories of Virtual Asset Service Provider licenses in Bahrain, namely:
- the Category 1 license under which crypto companies can provide investment advice and receive and transmit virtual currency-related orders;
- the Category 2 license under which it is permitted to act as an agent and trade various crypto-assets, to complete portfolio management operations, offer investment advice, and provide custodian services;
- the Category 3 license that covers all activities of the Category 2 permit, plus the possibility to trade crypto-assets as a principal;
- the Category 4 license under which companies can provide custodian services and operate crypto exchanges.
Each type of license is associated with a minimum capital to be secured by the company applying it as follows:
- BHD 25,000 for the Category 1 crypto license in Bahrain;
- BHD 100,000 for the Category 2 license;
- BHD 200,000 for the Category 3 license;
- BHD 300,000 for the Category 4 license.
If you want to open a cryptocurrency company in Bahrain and apply for a Virtual Asset Service Provider, our company registration agents can help you. Do not hesitate to contact us for further information on the incorporation requirements of such a business.