As the demand for cryptocurrency services grows, many businesses are looking to establish operations in crypto-friendly jurisdictions like Portugal. If you're planning to set up ATMs that facilitate transactions in both fiat and cryptocurrency, obtaining the appropriate licenses is essential. This article outlines the steps involved, the licensing requirements, and how professional assistance can simplify the process.
Why Portugal?
Portugal has emerged as a hub for cryptocurrency and fintech businesses due to its favorable regulatory environment, strong financial infrastructure, and access to the European Union market. Operating within Portugal enables businesses to leverage EU passporting rights, extending their services across the EU without needing separate licenses for each country.
For your specific project—installing ATMs that handle both fiat and cryptocurrency transactions—you will likely need two types of licenses:
Crypto License: To operate legally under Portugal’s crypto asset regulations.
Payment Institution License (PI): Required to facilitate fiat transactions and provide payment services such as withdrawals and deposits.
Licensing Requirements in Portugal
1. Crypto License
The Portuguese regulator, Banco de Portugal, oversees the licensing of virtual asset service providers (VASPs). Key requirements include:
Incorporation of a Company in Portugal: The entity must be registered in Portugal.
Fit and Proper Test: The company’s directors must meet the "fit and proper" criteria, demonstrating expertise and a clean criminal record.
AML/KYC Compliance: Strong anti-money laundering (AML) and know-your-customer (KYC) policies are mandatory.
Business Plan: A detailed plan outlining the company's operations, security measures, and risk management strategies.
2. Payment Institution License
To install ATMs that handle fiat currency, you’ll also need a Payment Institution (PI) license under the EU’s PSD2 (Payment Services Directive 2). Requirements include:
Capital Requirements: The business must meet the minimum initial capital threshold, typically ranging from €20,000 to €125,000, depending on the services offered.
Technical Setup: A robust IT infrastructure to ensure transaction security and compliance.
Audit and Risk Management: Independent audits and comprehensive risk management systems are essential.
Stages Involved in Licensing and Passporting
If you’re looking for professional assistance with this process, here’s an outline of the stages where a qualified consultant or legal advisor can provide support:
1. Feasibility Study and Advisory Support
Analyze the specific requirements for your business model in Portugal.
Provide advisory services on the applicable licenses, compliance measures, and legal obligations.
Offer a roadmap for the entire licensing process, ensuring all steps are clear and achievable.
2. Document Preparation
Draft and compile necessary documents, including the business plan, AML/KYC policies, risk assessments, and corporate governance framework.
Prepare all application forms and supporting documents required by Banco de Portugal.
3. Application Submission and Follow-Up
Submit applications for both licenses and liaise with the regulator on your behalf.
Respond to any queries or requests for additional information.
4. Post-Licensing Support
Assist in setting up compliance monitoring systems to meet ongoing regulatory obligations.
Provide support with reporting requirements and audits.
5. EU Passporting
Guide you through the process of passporting your licenses to other EU countries, enabling seamless expansion of your ATM network across the EU.
Coordinate with local regulators in target jurisdictions to ensure compliance with local requirements.
Why Work With a Legal Advisor?
Navigating the regulatory landscape can be daunting, especially in the crypto and fintech sectors. An experienced legal advisor can:
Simplify Complexity: Handle all regulatory intricacies, allowing you to focus on your business.
Ensure Compliance: Avoid delays and penalties by ensuring all requirements are met.
Provide End-to-End Support: From advisory services to post-licensing assistance, a legal advisor can support your project at every stage.
Estimated Costs and Scope of Services
The cost of obtaining these licenses varies depending on the complexity of the application and the scope of services required. A legal advisor can provide:
Basic Support (Document Preparation): Preparation of necessary documents, starting from €15,000–€20,000.
Comprehensive Support (Advisory, Licensing, and Passporting): Full-service assistance, typically ranging from €40,000–€60,000 or more, depending on the size and scale of the operation.
Conclusion
Portugal offers a golden opportunity for businesses looking to establish themselves in the cryptocurrency and payment services space. By obtaining the necessary licenses and leveraging EU passporting rights, you can create a scalable, compliant, and innovative business model.
If you need assistance with licensing, regulatory advisory, or expanding into other EU markets, working with an experienced legal professional can ensure a seamless process. Whether you’re at the stage of exploring feasibility or ready to submit your application, expert guidance can make all the difference in achieving your business goals.
Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal or financial advice.
Author & Crypto Consultant
Shahid Jamal Tubrazy (Crypto & Fintech Law Consultant)
Shahid Jamal Tubrazy, a certified top expert in Crypto Law from Duke University, is a leading authority in the cryptocurrency and blockchain space. As a seasoned Fintech lawyer, he offers a full spectrum of services, including licensing, legal guidance for ICOs, STOs, DeFi, and DAOs, as well as specialized expertise in crypto mediation, negotiation, and mergers and acquisitions. With a proven track record and published works on Blockchain Regulation and Cryptocurrency Laws, Shahid provides unparalleled insights into the complexities of the fintech world, ensuring compliance and strategic success. 🌐💼 #CryptoLaw #Fintech #Blockchain #LicenseServices #CryptoMediator #MergersAndAcquisitions #CryptoCompliance #FrozenAssetsrecovery.
EMAIL: shahidtubrazy@gmail.com
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