San Marino Legislation & Regulations

Set up your fintech, cryptoasset or innovative project in the Republic of San Marino

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SM Team 12Jul 2023 10 min

San Marino Innovation & High-Tech Decree

San Marino Innovation is the local regulator and registrar for Innovation and Blockchain entities. Core Delegated Decree that regulates San Marino Innovation is the Provisions on High-technology Enterprises Decree.

This Decree outlines special tax, administrative and legislative benefits for companies, defined as “High-Technology Enterprises”, from start-up phases through various maturity stages. Founders need to have an innovative idea of product, service, process, technology, organization or business model certified by San Marino Innovation.

Three categories of high-technology enterprises have been designed with a “pathway” extending for a total period of 12 years through First (SUT I), Second (SUT II) and Third (SAT) “stages of development” each lasting 3,4, and 5 years respectively. Innovative enterprises can benefit from the following advantages:

1.Reduced capital for company formation: 1 EUR(SUT I), 10kEUR(SUT II), 20kEUR (SAT)
2.Reduced corporate income tax: 0% (SUT I), 4% (SUT II), 8% (SAT)
3.Administrators and employees can apply for permanent and temporary residency
4.Capital Gains Exemptions
5.Employment and social security contribution subsidies, exemptions, benefits

Currently most innovative enterprises are in the blockchain technology, medtech, fintech and software sectors. San Marino Payments, Fintech & Banking Legislation Payments, Fintech and Banking entities are supervised by the AIF (Agenzia di Informazione Finanziaria), the Financial Crimes Enforcement Agency and Banca Centrale di San Marino (Sammarinese Central Bank) through a variety of AML, Banking, Payment System Decrees. Currently the following payments, banking licenses exist in San Marino:

1.PSP (payment service provider) license under decree 177/2018 and 2020-04
2.Fully licensed banks
3.Insurers, Asset Management Companies, Financial Promoters
4.Foundations, Trusts, Non-Profits
5.Passported Electronic Money Institutions, Payment Institutions, Securities

Dealers from the United Kingdom and other areas where passporting agreements and trade agreements are in existence. The government is trying to encourage more payments players to enter the country to
support the growing number of innovative companies and blockchain related projects and on/off ramps. Due to intense regulation and high capital requirements, these licenses are being given out strictly on a case-by-case basis.
Reach out to: [email protected] to find out more

Comprehensive Crypto Exchange Regulation

San Marino has been working on its Crypto legislation since 2015. Currently the government is working on a specific decree to clearly set the rules on DLT business entities, including a broad regulation of crypto-exchange activities, all kind of tokens and ITO, crypto-currencies and all virtual assets in-detail. The San Marino government is willing to release the decree by September 2023, enhancing its crypto-friendly
environment with a dedicated top-notch ecosystem of services. The legislation is going to be MiCa compliant and operate in-line with European and international VASP standards.

On/Off Ramp Regulation & Exemption

On and off-ramp activities, according to AIF exemption (AIF is the government agency that takes care of anti-money laundering in the Republic of San Marino), falls under the VASP regulation as per Delegated Decree 111/2019 art. 14 paragraph 4 bis. Normally a VASP, a Virtual Asset Service Provider, cannot operate in the Republic of San Marino until the issuance of a specific secondary regulation by AIF in concert with San Marino Innovation (local secondary regulator). Nevertheless, on and off-ramp providers do not directly carry out one of the activities indicated by Delegated Decree 111/2019, limiting
to facilitate the meeting between the demand and supply of virtual assets, without directly exchanging virtual assets, without transferring virtual assets and without performing custodial service, so crypto assets or money don’t transit on any account of the provider. For this reason, the activity of the provider may not be prohibited pursuant to art. 14 paragraph 4 bis, since the secondary legislation to which the law
refers can be identified in the Instruction for non-financial subjects already in force.

Existing Blockchain Decrees

Original blockchain decree from 2019 Decree 004/2019 establishing the blockchain entity register, role of San Marino Innovation regulator and core framework of “welcoming token issuers in San Marino”.

Blockchain E-Book decree outlining core provisions for Utility Tokens and Security Tokens based on the decree 086/2019 issued in 2019 and the core decree itself.

Decree 111/2021 and 088/2021 outlining provisions of custody and/or administration services of virtual asset or tools that allow having control over virtual assets in the Republic of San Marino which delegated the VASP functions to authorized and regulated banks pursuant to Law no. 165 of 17 November 2005 and subsequent amendments, having obtained a specific authorization to provide such service on an ancillary basis, issued by the Central Bank pursuant to this Delegated Decree until a specific CASP/VASP regulation is put in place.

Three core blockchain regulators are the Central Bank, San Marino Innovation and the AIF (Agenzia di Informazione Finanziaria), the Financial Crimes Enforcement Agency.

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