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Gofaizen & Sherle has launched the new product for obtaining crypto licenses in El Salvador, expecting it to become one of the key business destinations on the crypto map. In this article, we have discussed all the necessary details that will help you launch an effective business in El Salvador quickly and easily.
El Salvador is rapidly emerging as a sought-after destination in the world of cryptocurrencies, particularly due to increased regulatory scrutiny in the EU and US. As these major economies tighten their regulations, businesses are exploring alternative jurisdictions, and El Salvador has become a prime choice.
Known for recognizing Bitcoin as legal tender and even launching cryptocurrency mining on a volcano, El Salvador has quickly gained attention in the crypto industry. The country’s diverse economy, with a focus on coffee production, construction, and industrial manufacturing, has shown positive GDP growth and relatively low inflation and unemployment rates.
El Salvador’s government actively supports the crypto industry and aims to attract foreign companies and investors. They have implemented a favorable tax system, exempting digital asset-related income and profits from taxation. Additionally, technology companies engaged in AI, app development, and digital products can enjoy a 15-year tax exemption.
The National Commission of Digital Assets of El Salvador (NCDA) issues licenses to virtual asset service providers (VASPs), offering a transparent and secure framework for crypto businesses. This supportive regulatory environment makes El Salvador a promising hub for the crypto community.
The Key Advantages of El Salvador
- Unique Taxation System Benefits VASPs: No payments required for operations with digital assets, and transactions can be conducted using Bitcoin. The nominal value, yields, and income from digital assets are tax-exempt. Capital gains and ordinary income from buying, selling, or transferring digital assets are also tax-exempt. Issuers, certifiers, and service providers of registered digital assets enjoy these tax benefits for their related activities without any obligation for tax withholding;
- The jurisdiction offers notably low state fees, which is highly beneficial for business activities;
- El Salvador has crypto-friendly banks, making it one of the most crucial and convenient options. This is almost a unique opportunity for a crypto project;
- El Salvador’s adoption of Bitcoin as legal tender and crypto regulation create a favorable environment for cryptocurrency businesses. This attracts cryptocurrency exchanges, wallet providers, payment processors, and blockchain startups. Obtaining a crypto license allows companies to enter this market, offer services to the local population as well as worldwide;
- Operating within a regulated framework offers companies clarity and guidelines to navigate the cryptocurrency landscape in El Salvador. With a crypto license, companies ensure compliance with legal requirements, including know-your-customer (KYC) and anti-money laundering (AML) regulations. This boosts trust and credibility among customers and partners.
Obtaining the Crypto License
The overall process is relatively straightforward, but it does require some patience. Starting a business in El Salvador can take 3 to 5 months in total. The crucial steps involve collecting the necessary documents for authorities and obtaining the license. In the final stage, you can choose a bank or EMI (Electronic Money Institution) and commence operations in the country and worldwide.
However, there are a couple of essential details you should know before launching a project in El Salvador. Firstly, you must have a minimum of two shareholders, and it is imperative to establish an effective business plan. Additionally, you should be prepared to work closely with local regulators and provide reports when necessary. Overall, these rules provide a simple and clear framework for operating a business.
If you’re considering launching a crypto exchange operator, El Salvador stands as an excellent choice. Moreover, the country offers various other opportunities for crypto projects in El Salvador. These include setting up companies for:
- Custody services
- Payment processing
- Digital asset and derivatives trading
- Issuing tokens, stable coins, or other types of tokens
- Engaging in DeFi activities
However, if you possess an innovative solution or a complex idea based on AI or other advanced technologies, El Salvador becomes the jurisdiction of your dreams. It shines as a startup incubator with a strong focus on financial democracy.
For comprehensive details, feel free to visit our website. If you have any questions, don’t hesitate to reach out via email or our Telegram chat.
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