The cryptocurrency market is a dynamic, diverse, and sophisticated one. Choosing the appropriate operating jurisdictions is important for entrepreneurs who are interested in starting a crypto project such as a cryptocurrency exchange, wallet, OTC desk, etc.
The European Union(EU) and the United States(US) are two popular places to start a cryptocurrency business. Launching a crypto business in EU vs US is compared in this blog with its compelling pros, cost, time, complexity, and favorable destinations.
Pros Of Launching Crypto Business in EU vs US
Both the US and EU offer unique opportunities and difficulties when it comes to launching a cryptocurrency business…
United States – Setting up a Crypto business offers numerous advantages such as
- Offers enormous growth potential because of its huge and diverse user base.
- Advanced financial markets in the US provide a strong foundation for the growth of the cryptocurrency business.
European Union – There are also strong benefits of launching a cryptocurrency business in the EU such as
- Harmonization among member states is the goal of EU regulations which makes cross-border business simpler. To ensure ease of market entry, certain EU member states also provide regulatory sandboxes which make it easier to test financial innovations in a regulated setting.
- The majority of crypto licenses obtained by EU member states allow for the operation of crypto exchanges on a global scale. This also applies to areas where there are no local cryptocurrency regulations.
- With an average processing period of one to two months, the EU excels at obtaining the required licenses quickly.
- Compared to the US, the cost of doing business is less when it comes to earnings, legal costs, and rent. Furthermore, capital requirements are usually less strict in EU nations. An EU crypto license can be obtained between euros 15,000 and 20,000 at first, with a 35% share capital requirement.
- Estonia and other tech-heavy countries are known for being hospitable to startups. Additionally, access to a larger and more diverse talent pool is made possible by the EU’s commitment to labor freedom.
- Transactions using cryptocurrencies are exempt from VAT in some EU countries. Also, EU corporation tax rates are lower than US corporate tax rates.
Time Takes For Launching Crypto Business in EU vs US
European Union
The expediting of the approval process is contingent upon the particular EU jurisdiction. As an illustration, countries such as Lithuania, Poland, and the Czech Republic are known for their expedited licensing processes which enable crypto-specific licenses to be issued in as little as one to two months.
United States
By comparison, US timetables are usually longer between six and twelve months. This prolonged period stems mainly from the stringent regulatory requirements, particularly at the state level. Significant time might be spent applying for a Bitlicsense in places such as New York.
Cost Of Launching Crypto Business in EU vs US
European Union
Costs are often lower in the EU, especially in the areas with laxer regulations. Cheaper corporation taxes and more affordable labor expenses are some of the cost advantages offered by certain EU nations.
United States
Operating in the US can be more expensive because of the high cost of legal representation, the strict regulations that must be followed, and the need for a lot of paperwork and compliance. Furthermore, the acquisition of particular licenses such as Bitlicense can result in additional cost inflation.
Complexity Of Launching Crypto Business in EU vs US
European Union
The legal framework of the EU is typically more adaptable and varies per member state. This laxity can make the start-up procedure for the cryptocurrency business go more smoothly.
United States
On the other hand, the environment for regulation in the US is stricter. Federal rules and the disarray of state-specific legislation contribute to the complexity, making the process more difficult overall and adding complexity to compliance requirements.
Preferable Places Of Launching Crypto Business in EU vs US
Lithuania
Lithuania is a prominent hub for Bitcoin businesses in Europe because of its simple licensing process and progressive laws that comply with the MiCA directive. The authorized capital minimum of Euro 1,25,000 must be met to launch your business. Installment payments are a handy option, with a 35% down payment required.
Poland
Poland recently enacted extensive legislation about virtual assets which requires businesses to register with the state cryptocurrency registry. The registration procedure is simple and quick. Moreover, Poland offers crypto businesses a tax-advantageous environment because of its vast network of tax treaties with 84 other countries.
Czech Republic
Although the Czech Republic does not have a license specifically for cryptocurrencies, it does need registration in the Trade Licensing Registry(TLR) for businesses that want to operate legally throughout the EU. Surprisingly, there are no corporate account requirements and a minimum capital requirement of just 1 CZK per shareholder. Czech Republic’s appeal to cryptocurrency business is increased by its ease of admission.
Estonia
Estonia, which is popular for its quick and easy crypto licensing process offers licenses that are applicable throughout the EU making it an ideal location for crypto business. Legal parity between cryptocurrencies and fiat currencies guarantees excellent regulatory clarity. Estonia also has a tax system that is quite favourable which aids in its allure.
Final Thoughts
Starting a crypto business in the EU and US involves many different aspects and it is fraught with complex technical, financial, and regulatory issues. Depending on the jurisdiction these challenges can differ substantially, although the European Union is frequently seen as having an advantage because of its cost-effectiveness and well-defined regulatory frameworks.
Zodeak offers you a complete solution to build a crypto business in Europe or the United States. We specialize in developing crypto exchange businesses using cryptocurrency exchange script so you can adapt your business to your specific requirements.
