Over the past year, IA Law Firm Bosnia has received an increasing number of inquiries from foreign clients regarding cryptocurrencies and crypto exchanges. This prompted the idea to address the key concerns clients face in this article. The real reason why it’s difficult to open a cryptocurrency company in Bosnia and Herzegovina! Bosnia and Herzegovina is becoming an increasingly important point on the global crypto map, but anyone wanting to launch a crypto exchange or any other virtual currency-related service is met with major challenges.
If you’re a foreigner trying to open a company in Bosnia, you’ve probably asked yourself: Why is it so difficult? Is the Securities Commission (SC) obstructing foreign investors?
The reality is that behind this complicated procedure lies a series of legal requirements that are not immediately clear. In this article, we uncover the key reasons why only six companies have been registered, and why all their founders are domestic legal and natural persons. Discover how to speed up the process and avoid mistakes that could cost you time and money!
Why are there no foreign founders?
The reason lies in the complex procedure! Although the crypto industry is rapidly growing, Bosnia and Herzegovina has very vague laws regulating cryptocurrencies. The entire legislation concerning cryptocurrencies consists of just a few articles and is only formalized in the Republika Srpska entity. The Securities Commission applies laws that are not specific solely to the crypto market, but also include other regulations such as the Anti-Money Laundering (AML) Law.
What does this mean for you?
If you’re a foreigner wanting to open a company in BiH, you’ll need to prove that you’re not connected to illegal activities, including money laundering. That’s not a simple task! The Commission requires complete documentation—not just related to your business, but also additional information about all individuals and companies you are associated with. Your previous work experience in executive positions is also subject to scrutiny—not just in terms of expertise, but also regarding any past penalties or criminal proceedings related to money laundering or suspicious financial transactions (both for the legal entity and its leadership).
Why is a local director and AML officer recommended?
If your key executives are foreigners, the registration process becomes significantly more complex. The director and AML officer (the person responsible for preventing money laundering) must be easily identifiable and accountable under Bosnian law. If these individuals are foreigners, the Commission requires additional proof of their clean history and accountability, which can greatly slow down the process.
To speed up registration, the most practical solution is to have local experts as your director and AML officer (especially the AML officer, who is required to be physically present in BiH and communicate with institutions and inspectors). This reduces the need for additional documentation and speeds up the entire process.
Common mistakes in applications that cost time and money
Although it is possible to establish a crypto exchange using a virtual address in BiH, this is not recommended in practice. The Commission requires that the AML officer has a physical workspace, as inspections must be able to monitor the work environment.
Another common mistake: Deputy AML officer. This is not directly requested in the form available here, but submitting this information is crucial. Without a deputy who can take responsibility in case of absence or illness, your application may be rejected.
Additionally, internal policies for handling money laundering cases are not mandatory within the form submitted to the Commission, but they are required under the AML law. Failing to include them increases the likelihood that the Commission will request supplements or even reject your application.
Personal data protection – Don’t forget about privacy!
Although personal data protection does not fall directly under the Commission’s jurisdiction, submitting a privacy policy and terms of use can be a key factor in showing your seriousness and commitment to doing business in BiH. Not only does this indicate that you comply with legal requirements, but it can also support the licensing process by demonstrating that you are mindful of all regulatory aspects of your business.
What can you do to speed up the process?
The regulatory framework for cryptocurrencies in Bosnia and Herzegovina is complex, but not insurmountable. The key to successful registration is carefully following all requirements and submitting complete documentation on time. Make sure all key team members are local experts, and don’t forget the additional obligations from related laws.
Although the process can be challenging, legal consultation with an experienced attorney in this field can significantly accelerate your registration and help you avoid common mistakes. With the right approach and thorough preparation, your company can become one of the few to successfully complete this demanding process!
IA Law Firm Bosnia can provide a complete registration service and manage all stages of registering a company that deals with cryptocurrencies in BiH.
Contact us for more information: https://ia-lawfirm.com/kontakt/
