On January 1, 2025, Brazil took a significant step toward legalizing and regulating the gambling market. This process was made possible by the adoption of Law No. 14.790/2023, which established a new legal framework for the lawful operation of betting and online casinos. This historic legislative change opened up new opportunities for operators and players alike, but also created serious challenges in the area of legal regulation and social responsibility. In this article, we will examine the main aspects of the updated regulation of the gambling sector in Brazil.

Licensing

Law No. 14.790/2023 is a key element of the new legal structure of Brazil's gambling market. Under the new regulation, conducting gambling activities requires obtaining a gambling license. Oversight of the industry and the issuance of licenses is carried out by the regulatory authority — the Secretariat of Prizes and Bets (SPA), which was established under the new law.

Obtaining a license requires payment of a state fee of 30 million reais (approximately USD 6 million), as well as compliance with a number of regulatory requirements. The license is valid for five years and permits operation throughout the entire country.

The license grants the right to conduct the following types of gambling activities:

• fixed-odds betting;
• virtual games and sports event simulators;
• online casino games (classic slots, roulette, blackjack, baccarat, dice — in virtual or live format);
• and other interactive online games of chance (games where the outcome depends on chance rather than player skill).

A distinctive feature of Brazil's gambling market regulation is that poker tournaments do not require licensing, as they are legally classified as games of skill. However, bingo and land-based casinos remain prohibited.

It is also worth noting that Brazil does not license B2B activities (the provision of gambling-related services such as software supply, marketing, payment services, etc.). Among the requirements for service providers in the gambling sector, only mandatory certification of gaming software is defined.

Licensing requirements. To obtain a license, a prospective operator must meet the following criteria:

• the company must be registered in Brazil, with at least 20% of shares owned by Brazilian residents;
• the company must provide proof of paid-in share capital of at least 30 million reais. The company is also required to form a financial reserve of 5 million reais to ensure financial stability;
• the company's management must include at least one director who is a resident of Brazil;
• the operator must develop AML policies and comply with strict requirements for combating money laundering and terrorist financing;
• the operator's online system must include clear KYC mechanisms and safeguards for players' personal data;
• the operator must establish systems to protect players' rights and prevent gambling addiction;
• the gambling operator's website must be registered under the .br domain zone;
• and ensure compliance with current legislative requirements (e.g., age restrictions, advertising requirements, etc.).

Regulatory Requirements for Gambling Operations

Once licensed, an operator is required to meet regulatory standards, including:

• accepting bets exclusively in fiat currency — digital currencies are prohibited. Operators are also prohibited from accepting players' credit cards as a payment method (only debit cards are allowed);
• the operator is required to report to the SPA on the results of its gambling activities, as well as to submit financial statements to the tax authorities in a timely manner;
• player verification is a mandatory step when opening every gaming account: operators are required to identify and verify players to prevent fraud and unlawful participation in gambling as part of KYC procedures;
• every operator must maintain a responsible gambling policy: implementing self-control mechanisms for users, including self-exclusion features and the ability to set betting limits.

Taxation

One of the central aspects of the new gambling regulation is taxation. Under the new legislative rules, in addition to paying the standard corporate income tax, all gambling operators are required to pay a tax on Gross Gaming Revenue (GGR) at a rate of 18%. The current gambling tax rate is higher than the previous rate of 12%. The operator is also required to withhold a 15% tax on winnings from the payout amount and remit it to the budget as the player's tax agent.

Potential Tightening of Gambling Regulation

Given the growing concerns related to gambling addiction, a new bill aimed at tightening the rules for gambling operators was proposed in July 2025. The following additional measures are planned:

• raising the minimum age for participation in gambling;
• introducing new restrictions on gambling advertising in the media, with particular emphasis on protecting minors;
• introducing limits on player spending and additional financial capability checks before placing large bets.

Conclusion

Brazil is one of the most promising markets for many gambling operators. The introduction of new industry regulation has been a significant step toward establishing lawful and transparent operations. For businesses, this opens up new opportunities for growth and for creating a safer and more efficient gaming environment. However, as is common in countries with "young" gambling legislation, Brazil currently has a regulatory framework that is not yet fully developed, which creates certain conflicts in the licensing process and in the actual conduct of business. Also, given that the new law only came into force in 2025, the market is still in a transitional phase, which may lead to further legislative changes — either easing certain restrictions or, conversely, tightening them.

For more detailed information regarding the regulation of the gambling sector in Brazil, please contact the specialists at Solex Group.

Keywords: gambling regulation, Brazil, gambling legislation, gambling regulation, casino games in Brazil, betting in Brazil.

In 2022, the United Arab Emirates began the process of legalizing the crypto industry. At present, cryptocurrencies are not yet recognized as a means of payment, but a legal framework has emerged for licensing providers offering services related to virtual assets. As a result, both global crypto giants and new companies in this field have gained the opportunity to legally operate within the country.

Currently, there is no unified nationwide regulation of activities related to the provision of digital asset services, so licensing is carried out within the relevant free economic zones (Free Zones). Accordingly, depending on the emirate in which the economic zone is located, different licensing requirements will apply to applicants.

Many types of activities related to digital asset services fall under licensing. In particular, it is now possible to obtain a license for the exchange and custody of digital assets (digital wallets), the issuance and sale of tokens, the issuance of NFT collections, payment and financial services in the field of digital assets (including brokerage activities, lending, and crypto deposit placement), and many other, more narrowly specialized activities. Thus, the UAE jurisdiction can be used to structure a wide range of crypto projects, from traditional ICOs to complex crypto exchanges.

The cost and complexity of obtaining a license depend on the platform's activities and the emirate in which the company plans to register. Below are the most common options for structuring a crypto business in the UAE:

Emirate of Abu Dhabi. In the capital emirate, cryptocurrency regulation is carried out within the Abu Dhabi Global Market (ADGM) free economic zone by its financial regulator. Due to the Abu Dhabi government's conservative approach to many areas of business, regulation of the virtual asset sector is stricter compared to other regions of the country. In particular, this is reflected in requirements for a fully operational local office with qualified staff and stricter licensing requirements.

A license can be obtained for the main types of digital asset-related activities — brokerage, custodial, investment, payment services, as well as token issuance (including NFTs). The state fee for obtaining a license starts from USD 20,000 and increases depending on the applicant's planned activities.

Emirate of Dubai. In Dubai, it is currently possible to obtain a crypto license in three economic zones — Dubai World Trade Centre (DWTC), Dubai Multi Commodity Centre (DMCC), and Dubai Silicon Oasis (IFZA DSO). Licensing is carried out by the regulator VARA (Dubai Virtual Assets Regulatory Authority), which was established in 2022 under the DWTC economic zone. Regulation of the digital asset industry in the emirate is more flexible compared to Abu Dhabi, but Dubai's reputation as one of the world's financial centers implies quite rigorous vetting of applicants seeking a license.

VARA has an extensive list of crypto licenses regulating more than 20 types of activities. This large number of license types allows applicants to choose the option best suited to their business model and avoid the need to obtain a broader license entailing significantly stricter regulation. The state fee ranges from USD 12,000 to USD 55,000 for the issuance of a single license. Accordingly, depending on the complexity of the platform, obtaining several licenses may be required.

Emirate of Ras Al Khaimah. In this emirate, licensing is carried out within the Digital Asset Oasis economic zone. This is a new economic zone established in 2023, narrowly specialized specifically in digital assets and Web3 projects. The distinctive feature of this economic zone is that it is less heavily regulated compared to the other zones discussed in this article.

Following Dubai's model, Ras Al Khaimah has created a regulatory framework for licensing various types of digital asset services, but the licensing process itself is simpler. This is reflected in more straightforward licensing conditions and a smaller scope of requirements for applicants. The state fee starts from USD 10,000 for a single license and increases depending on the license type.

The main challenge in the context of operating a crypto business in the UAE is banks, which are not yet fully ready to work with virtual assets. However, there is a large number of payment systems, both foreign and local, that process payments related to crypto activities. And given the dynamic nature of the United Arab Emirates, banks' adaptation to the new reality is only a matter of time.

The UAE is not without reason considered one of the most attractive jurisdictions for doing business. This is supported by a flexible tax system, developed legal and economic systems, protection of investors' rights, and a high standard of living. Now the Emirates are open to crypto business as well. However, the existence of regulatory conditions does not mean that licensing is quick or trouble-free. Therefore, before entering the UAE market, it is important to prepare properly, especially from a legal standpoint. To learn more about doing business and obtaining crypto licenses in the UAE, please contact the specialists at Solex Group.

Keywords: cryptocurrencies, digital currencies, virtual assets, crypto license, Dubai, UAE, United Arab Emirates, payment services

Canada is a respectable jurisdiction with a high level of economic development and all the conditions necessary for doing business. Thanks to its well-developed banking infrastructure and flexible industry-specific regulation, this jurisdiction is optimally suited for organizing a payment business, which can be launched by obtaining a payment license — namely, a Money Service Business (MSB) license. We invite you to take a closer look at the opportunities offered by the Canadian payment license and the process of obtaining one.

An MSB is a non-bank financial institution authorized to provide a range of payment services. Within the scope of its activities, such an institution is entitled to provide the following services:

• currency exchange transactions;
• B2B/B2C payment transfers;
• digital currency transactions (exchange and transfer of cryptocurrencies);
• holding of funds (e-wallet);
• merchant acquiring services (processing of bank card payments);
• organization of crowdfunding platforms.

MSB licenses are issued by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The law provides for two categories of payment licenses — MSB and FMSB (Foreign MSB). Both types of licenses offer the same capabilities; the only difference is that MSB licenses can be obtained by companies registered in Canada, while FMSB licenses are intended for foreign companies. Basic requirements for applicants:

• the company's core business must be the provision of financial or payment services;
• the company must have an AML policy and appoint an AML officer;
• there are no requirements regarding a minimum amount of share capital;
• the company's beneficiaries must have the appropriate qualifications and an impeccable business reputation.

The main difference in requirements for applicants, depending on the type of license, is that to obtain an MSB license, the applicant must provide proof of a full presence in the country — a director and AML officer who are Canadian residents, a real local office, and an open account with a Canadian bank. No such requirements apply to a foreign applicant — the main condition is that the company must not be registered in a jurisdiction included on sanctions lists. As a result, obtaining a license for a non-resident company turns out to be easier than establishing a full local structure.

To obtain an MSB/FMSB license, the applicant must submit the following package of documents to FINTRAC:

• a package of corporate documents for the company;
• information on the company's structure, including details on the director and management, the AML officer, and the number of employees;
• identification data of the beneficiaries;
• a detailed business plan;
• the company's bank account details;
• a license application.

Review of the application usually takes 3–6 months. If a positive decision is made, FINTRAC enters the applicant company into the register of licensed operators and assigns it a corresponding license number. From that moment on, the company can fully provide its services to clients.

The Canadian license has a number of advantages, including:

1. A simplified licensing procedure.
2. Unlike European regulation, there are no requirements for a minimum amount of share capital.
3. A relatively short licensing timeframe.
4. The ability for foreign companies to obtain a license without strict local substance requirements.
5. A wide range of services that a licensed operator can provide.

To summarize the above — the Canadian MSB license is a fairly versatile tool that makes it possible to provide international payment services. Such a license can serve as a dynamic launch point for a new business or complement the structure of an already operating one. If you are ready to begin the process of obtaining a payment license in Canada but still have questions, please contact the specialists at Solex Group — we will be glad to help you through this process.

Keywords: payment system, payment license, Canada, MSB, payment services, EMI, PSP.

More than two years have passed since the adoption of Law of Ukraine No. 466-IX, which introduced provisions on controlled foreign companies into the Tax Code of Ukraine, and as of January 1, 2023, this provision has come into full effect. What are the main consequences of this Law that owners of foreign companies in Ukraine may experience?

To begin with, a brief overview of Law No. 466-IX and, in fact, the innovations to the Tax Code of Ukraine. The current version of the Tax Code, specifically its Article 39-2, provides that a resident of Ukraine must annually submit a report on controlled foreign companies (CFCs) and, in certain cases, pay tax on the undistributed profit of the CFC. An obligation has also arisen to notify the tax authorities of:

• the registration of new companies abroad;
• any actions taken with respect to such companies (sale or purchase of shares in existing ones, changes in ownership or control structure);
• the liquidation of controlled foreign companies.

The new Law was integrated into Ukrainian tax legislation gradually — the first to take effect was the obligation to submit notifications regarding the establishment of new companies or changes to existing ones. This obligation came into force on January 1, 2022 — a resident of Ukraine was required to notify the tax authorities within 60 days of the registration of new companies abroad or of changes to existing ones. Due to the consequences of martial law in the country, the effect of this provision was suspended, but it was reinstated in November 2022. Accordingly, residents of Ukraine who established companies abroad in 2022 were required to submit the relevant notifications within 60 days from the date this obligation was reinstated.

Starting from the beginning of 2023, another part of the CFC obligations came into effect — reporting on the financial results of controlled foreign companies. What does this mean? Every owner/controller of a foreign company who is a tax resident of Ukraine must submit a report on controlled foreign companies to the tax authorities. Such a report is submitted together with the annual declaration of property status and income (i.e., by May 1, 2023). The report must include the complete registration details of the CFC and a copy of that company's financial statements.

The main purpose of CFC legislation is to control the foreign income of CFC owners, as well as to tax such income. In other words, the state has gained the right to tax the income of foreign companies owned by Ukrainians if taxes on such income have not already been paid in the country of registration. If undistributed profit remains on the CFC's balance sheet by the end of the reporting period, its owner is obligated to pay 18% personal income tax + 1.5% military levy in Ukraine.

However, there are exceptions. The tax is not payable if:

1. The total annual turnover of all foreign companies of a Ukrainian resident does not exceed EUR 2 million.
2. The CFC is a public company whose shares are listed on global stock exchanges.
3. There is a valid tax treaty between Ukraine and the CFC's country of registration; and one of the following two requirements is met:

• the CFC actually pays corporate income tax in its country of registration at a rate of no less than 13%;
• income received from dividends/interest/royalties does not exceed 50% of the company's total income.

Thus, taxation of a foreign company's income is, in many cases, not a serious threat. The same cannot be said for the penalties for violating CFC requirements. The law establishes a clear and exhaustive list of circumstances under which fines may be imposed on a taxpayer — for failure to submit a report or for providing incorrect information, a fine of up to UAH 2.7 million applies. In the case of late payment of tax — 18% personal income tax, 1.5% military levy, and a fine of 25% of the amount owed.

Given that CRS (automatic exchange of tax information) came into effect in Ukraine starting in 2023, the tax authorities have gained a very effective resource for collecting information on the foreign income of Ukrainians. Considering that this year CFC reporting will be submitted for the first time, and there is no established administrative practice for this process, there is not much time left to prepare. By the end of April, it is necessary to prepare the CFC's financial statements, legalize them in Ukraine, draw up the report, and submit it to the regulatory authorities together with the tax declaration. Therefore, to avoid negative consequences, it is worth addressing this matter now.

Keywords: CFC, controlled foreign companies, taxation of non-residents, income declaration.

The digital currency industry is in a stage of active growth. In 2021, the market capitalization exceeded USD 2 trillion. Being a valuable yet high-risk asset, cryptocurrencies are popular among a large number of investors. Investors can act either individually, working directly with an exchange, or collectively — investing in cryptocurrency investment funds, thereby placing their assets under the management of licensed institutions.

A traditional investment fund is a way of collectively investing in various assets (stocks, currency pairs, debt obligations, and others) under the management of a licensed manager. The fund raises funds (contributions) from various investors (individuals or legal entities) and subsequently invests them in target assets. The resulting investment income, less the fund's fee, is distributed among the depositors.

In the case of cryptocurrency funds, the only difference is that such a fund is narrowly specialized in investing in digital assets. The dynamic volatility of cryptocurrency allows crypto funds to generate high returns. However, this same volatility can also lead to losses if the investment policy is not properly structured.

Such a fund can be established in any "crypto-friendly" jurisdiction depending on the goals and objectives set — in offshore jurisdictions (Panama, Bermuda, or the Cayman Islands), in Europe (Estonia, Malta, Liechtenstein, Luxembourg), or in Asia (Singapore, Malaysia). The choice of country of registration is influenced by a number of factors — the cost of establishment, the complexity of obtaining an investment license, the legislative regulation of its activities, and other nuances that should be taken into account at the start of the project.

Before establishing a cryptocurrency fund, it is important to have a clearly formulated strategy for its activities. Whether it will be an open-end or closed-end fund, the number of investors it is designed for, in which countries it will operate, and what minimum amount and subscription period may be offered to an investor — all these details affect the type of fund and must be recorded in the founding documents.

Any investment fund, as a financial institution, must strictly comply with the AML legislation of its country of registration and target markets, and have the appropriate policies and regulations in place. This aspect affects not only the fund's interaction with the regulator or investors, but also its work with banks and other payment institutions. Since the bank is a key link connecting the fund and investors, this relationship must be structured as correctly as possible.

A cryptocurrency fund is a large-scale project that requires careful attention to a multitude of details. With the right approach at the time of establishment, the fund will become an effective tool capable of generating high returns. The Solex Group team has extensive experience working with cryptocurrency funds and will be glad to assist with the legal support of your project. You can get answers to all your questions by reaching out to our company for a consultation.

The cryptocurrency market is attracting more and more investors every year. Cryptocurrency funds have proven to be the most effective way to collectively invest in digital assets. When launching such a fund, it is important to take into account a number of legal nuances that will directly affect the project's future development. Read Solex Group's new article to find out exactly what you should pay attention to.

Keywords: cryptocurrency, digital assets, investment fund, cryptocurrency fund, investment license

As the number and value of assets increase, the need arises for their proper structuring and protection. Traditionally, structuring private assets involves meeting the following requirements:

• creating preventive mechanisms that prevent the loss or alienation of assets;
• ensuring confidentiality of ownership;
• optimizing the tax burden on assets and the income derived from their realization.

When building an ownership structure, it is worth taking into account the type of assets, their geographic location, value, purpose, and a number of other criteria. Traditionally, holding companies, trusts, or family foundations are used for the purposes of international structuring of private assets.

One of the most effective tools for structuring private assets is a family foundation established in the Principality of Liechtenstein. Such a foundation has all the characteristics of a legal entity and combines certain features of a company and a trust; however, unlike a company, it has no shareholders, being an independent bearer of rights and obligations, and it may also hold bank accounts and property in its own name. This distinguishes it from a trust, where the trustee itself acts as the legal, but not the beneficial, owner of the property transferred into trust, holds bank accounts, issues powers of attorney, acts as claimant or defendant in court, etc.

The foundation is a separate pool of assets that acquires legal entity status by decision of its founder. When establishing a foundation, the founder transfers their assets to the management of the foundation's board (the executive body) for the benefit of a circle of persons (beneficiaries), who will subsequently receive income from the management of these assets. Thus, the founder relinquishes ownership of the property and transfers it in favor of the foundation. The foundation's board has only the right to dispose of the property, but does not acquire ownership rights over it. Beneficiaries, in turn, do not receive the right to dispose of or own the property, but have the right to receive income from the foundation's activities (beneficial right). This conditional separation of rights ensures the protection of assets, preventing their alienation by third parties — whether through a court decision or an attempted hostile takeover. For example, assets transferred to the foundation cannot be alienated as part of the subsidiary liability of the founder or beneficiary.

In addition to financial assets, other material contributions may also be placed under the foundation's management — company shares, movable and immovable property, jewelry, or works of art. The fact that a foundation has been established is only indicated in the Register of Foundations of the Principality of Liechtenstein, which is closed to public access. Specific information about the founders' names is not entered into the Register of Foundations, which provides an additional layer of confidentiality for the ownership structure. Proper structuring of the foundation can allow the names of founders or beneficiaries to be kept confidential, protecting the assets from outside interference, including from government authorities (for example, requirements for declaring CFCs or foreign income).

Foundations can be used for various purposes, but they are not intended for conducting everyday commercial activities for the purpose of making a profit. However, such restrictions on the type of activity do not apply to companies that are wholly or partly owned by the foundation. A family foundation is not subject to general oversight by the authorities or other bodies, and such a foundation is also not required to submit a balance sheet or undergo an audit.

In Liechtenstein, it is possible to apply the special Privatvermögensstrukturen (PVS) tax regime — as a result of which, provided there is no active commercial activity, the foundation is fully exempt from taxation and is only required to pay a fixed annual flat-rate tax of CHF 1,200, regardless of the amount of income received. Thus, the tax burden on the structure can be reduced to a minimum.

A family foundation can be used not only to address current needs, but can also become a tool for succession planning and the transfer of family assets as an inheritance, thereby ensuring their preservation. Liechtenstein's legislation regulates the activities of family foundations quite flexibly and allows them to be established with maximum consideration of the founders' interests and objectives. The law defines only general requirements, while the foundation's operating mechanism is set out individually in its charter.

Today there are numerous risks that can lead to the loss of assets, regardless of their geographic location. A properly structured ownership arrangement is the key to safe and effective ownership. The team of experts at Solex Group will be glad to help you organize the structure and provide ongoing support for it.

Keywords: asset protection, family foundation, Liechtenstein, trust, bank account.

B2B License for Gambling Service Providers in Ukraine – Interview with Denys Hryshchenko for LoginCasino

The Managing Partner of Solex Group explained, from a legal perspective, the specifics of the procedure for obtaining a license to provide services in the gambling business, the requirements for companies, and the cost of the license. The expert also shared his assessment of the introduction of this type of license on Ukraine's gambling market.

Denys, which companies exactly fall into the category of those required to obtain a B2B license in the gambling sector? How much will such a license cost?

Pursuant to Article 2 of the Law of Ukraine "On State Regulation of Activities Related to the Organization and Conduct of Gambling" (hereinafter — the Law), business entities that supply and/or provide software directly used in the organization and conduct of gambling are required to obtain the relevant license. This type of license is traditionally (unofficially) referred to as B2B, and must be obtained by developers of gambling software for its subsequent commercialization. Accordingly, a B2C license relates to the direct organization of gambling activities.

Such a license is issued for a term of 5 years and requires payment of a license fee in the amount of 300 minimum wages (UAH 1.8 million).

Do the licensing conditions provide for any special requirements with respect to the applicant company?

Unlike organizers (or operators) of gambling activities, the licensing requirements for companies providing software supply services are less strict. First of all, a B2B license can only be obtained by a company that is a resident of Ukraine. According to the licensing requirements for gambling software developers, adopted by the Cabinet of Ministers on March 31 of this year, an applicant for a B2B license and its officials must not be included in sanctions lists, must not be residents of states carrying out armed aggression against Ukraine, must have no criminal record, and must have an impeccable business reputation.

Compared to the licensing requirements for B2C licenses, there are no requirements for applicants seeking a B2B license regarding types of economic activity (KVEDs) or a minimum amount of share capital. Accordingly, the license fee is significantly lower than the fee to be paid by a future operator.

How widespread is the practice of licensing companies providing services in the gambling business worldwide?

Licensing the activities of gambling software providers is a mandatory requirement in any country where the gambling industry is developed in one way or another. For example, such licenses are widespread in countries such as Malta, Curaçao, Romania, or the Isle of Man. The requirement to license providers specifically stems primarily from the fact that the gambling business is high-risk in nature, so even the development of gambling software must take place under state oversight.

How exactly will the relationship between an operator and the company providing services to it be regulated?

First of all, it is worth noting that licensing is specifically required for the activity of supplying software in the gambling sector. Accordingly, from a legal standpoint, we have a classic situation involving the development and subsequent commercialization of software code. Accordingly, the transfer of ownership or other property rights takes place under license agreements concluded between the software developer and the operator itself with respect to specific code.

What documents need to be submitted to KRAIL to obtain such a license? Do you foresee any potential difficulties in the licensing process?

To obtain a B2B license, the applicant must submit to KRAIL a package of documents that includes: an application for obtaining the license; certified copies of the founding documents; a document confirming the authority of the applicant's representative; identification documents of the director, accountant, and founders; detailed information on the applicant's ownership structure, with disclosure of the ultimate beneficial owners. The Commission decides whether to issue or refuse the license within 15 days from the date the license application is accepted.

As already mentioned, the requirements for obtaining a B2B license are less strict compared to a B2C license, which can be seen even in the list of documents required for obtaining the license. However, this does not mean that licensing has no potential pitfalls. When it comes to obtaining licenses, it is very important to correctly prepare the required package of documents. How correctly the documents are prepared directly affects the entire process.

In your opinion, what impact will such a license have on the relevant IT sector?

Overall, the IT industry in Ukraine is one of the most dynamically developing sectors of the economy. Among domestic IT companies, a fairly large number are directly or indirectly engaged in developing software for gambling. However, before the adoption of the Law and its licensing requirements, all these companies were mostly oriented toward the Western market and were unable to legally operate in Ukraine. Now the situation has changed, and such companies have gained the ability to operate in the domestic market. And given the overall legalization of gambling and the number of licenses already issued, there will undoubtedly be demand for the services of B2B providers.

Does this license encourage the opening of new representative offices of foreign companies in Ukraine?

Absolutely. There are many well-known companies worldwide engaged in developing specialized software for gambling operators. Thanks to the adopted Law, such foreign providers have gained the ability to enter the Ukrainian market, which today is developing very dynamically. The adopted licensing requirements for the B2B sector provide an opportunity for foreign companies to enter Ukraine. Therefore, the opening of representative offices of foreign companies in Ukraine is only a matter of time.

Source: https://logincasino.com.ua/interview/denis-grishenko-licenzuvannya-b2b-v-napryami-gralnogo-biznesu-prizvede-do-zbilshennya-kilkosti-predstavnictv-inozemnih-kompanii-v-ukraiyni65622.html

How to Obtain an iGaming License in Malta?

Today, Malta is rightfully the flagship in the field of organizing online gambling. It has an effective legal framework, a stable economy, modern banking and IT infrastructure, and all document workflows are conducted entirely in English. The licensing process is concise and well-regulated. The tax refund system allows businesses to develop dynamically. Such favorable conditions make it possible to call Malta the Silicon Valley of Europe in the iGaming industry.

Licensing of the industry is handled by the Malta Gaming Authority (MGA). There are two key groups of licenses:

• a license to conduct gambling activities (B2C);
• a license to supply gaming software (critical gaming supply, B2B).

In turn, B2C licenses are divided into 4 subcategories, depending on the type of games:

1. Games whose outcome is determined by the generation of random numbers (roulette, blackjack, baccarat, etc.).
2. Games whose outcome is determined by the result of an event or competition (sports betting).
3. Games where players play against each other rather than against the house (poker, bingo, betting exchange).
4. Games whose outcome depends on players' skill and a combination of statistical indicators (other types of gambling).

A license can be obtained by companies registered in Malta or in another EEA member state. To do this, it is necessary to provide the MGA with the company's corporate documents and proof of paid-in share capital (from EUR 40,000), information on the ownership structure and founders, a business plan, a description of the planned activities and software, as well as a number of additional documents. When reviewing the documents, the MGA assesses the extent to which the applicant:

• is organizationally capable of running a gambling business;
• is properly prepared in terms of marketing and business strategy;
• is capable of meeting the regulatory requirements set out in law; and
• has correctly implemented its product from a technical standpoint prior to its market launch.

The company's structure must include specialists responsible for key functions such as marketing and advertising, player support, responsible gambling, fraud prevention, risk management, and the prevention of money laundering and terrorist financing.

If the applicant meets all of the above conditions, the MGA will grant it a license for a term of 10 years. The license issuance fee is EUR 5,000. The annual fee ranges from EUR 10,000 to EUR 25,000, depending on the type of games conducted. Annual fees are also charged based on the company's level of income.

Obtaining an iGaming license in Malta is quite a complex process. In order not to waste time unnecessarily, it is better to entrust the preparation of documents and the licensing procedure to qualified lawyers. The Solex Group team provides a full range of services for online gambling operators — from incorporation and licensing to complete legal and accounting support for the platform.

For more detailed information, please contact our specialists.

Keywords: gambling license, Malta, online gaming licensing, iGaming Malta

Online Gambling – Industry Peculiarities

Online gambling is a dynamically developing industry, with its market capitalization estimated at USD 150 billion. Hundreds of companies around the world are striving to secure their place in the global gambling market. And not without reason, as this sector stands out for its high profitability. However, simply having an idea for creating a gaming project is not enough. It is important to understand the intricacies of this field, since the costs of building online infrastructure can exceed hundreds of thousands of dollars, and regulatory requirements are strict enough to deprive a company of the ability to operate should any violation occur.

What is important to consider when creating an online gambling platform:

1. Software
The foundation of any gambling platform is its software, the core of which is the random number generator (RNG code — the part of the software code responsible for the random outcome of a game, regardless of any effort applied by the player). A key condition for obtaining a gaming license in any jurisdiction in the world is a correctly functioning RNG code, which must be confirmed by an appropriate certificate from an independent laboratory.

There are two ways to address this issue:

• using your own software, or
• purchasing it from specialized developers.

If your project involves using your own software, it will need to be certified before you begin operations. If you plan to purchase software from a particular supplier, make sure that this supplier holds a license and that its software products have the appropriate certificates.

2. Gaming Content and the Website
The impression of a gaming platform is shaped by the games presented on the site. To attract as many players as possible, it is important to emphasize the diversity of gaming content. The platform's website should be simple and include the most popular types of games: slots, poker, roulette, blackjack, bingo, and baccarat. Having a live casino with real dealers and real-time video streaming can increase the platform's popularity. Virtual sports betting can provide an additional stream of clients.

It is also important to take care of integrating the interface with your database, and to add or improve the usability of the existing navigation, since its layout is critical to your website's performance. Make sure that the transition from the website to the provider's platform and gaming page remains seamless for users.

3. Gambling License
Legal regulation of gambling activities may differ from country to country, but the licensing process itself shares common features worldwide. The most common gambling jurisdictions are Curaçao, Malta, Gibraltar, the Isle of Man, Romania, Vanuatu, and Kahnawake (Quebec). Also, starting in 2020, a license to conduct gambling can also be obtained in Ukraine.

The determining factors in choosing a jurisdiction are its reputation, the validity period of the license, and the time it takes to obtain it. The licensing process can take several months. It is better to entrust the preparation of licensing documents and the corporate structure to professional lawyers, in order not to waste time and, as a result, avoid receiving a refusal.

4. Payment Tools for Accepting Bets from Players
An online casino involves a huge number of international transactions: accepting bets, paying out winnings, and paying for various services. The platform must support integration with the major electronic payment systems so that players can place bets or withdraw their winnings. To ensure the security and stability of the gambling platform's payment operations, it is necessary to secure the support of several payment service providers who can ensure the uninterrupted operation of the business. Cooperation with reliable payment service providers will provide multi-currency support, fraud protection, and enhanced risk management.

5. Marketing
Marketing is the final, but no less important, step. When you are ready to launch, you need to have an aggressive marketing strategy and build an effective affiliate network that can drive engagement with the website and increase traffic. To attract new audiences and retain existing visitors, implement loyalty programs, set up bonus systems and retention campaigns to motivate players to come back. Study your competitors, identify their mistakes, and try to avoid them in the operation of your own platform.

Building and developing an effective gambling business is a complex and lengthy process; however, the right approach and foresight will lead to a quick return on investment and dynamic business growth.

Under the new Law No. 466, considerable attention is devoted to controlled foreign companies (CFCs). The emergence of new obligations regarding the submission of reports and the payment of taxes on the undistributed profit of CFCs in Ukraine prompts one to consider whether it is still advisable to keep foreign companies going forward.

In this article, we will examine in which cases and how it is worth liquidating a CFC.

All foreign savings will need to be reported to the tax authorities.

With the adoption of this law, many representatives of Ukrainian business began reviewing their foreign structures. Naturally, companies that no longer serve their intended functions should be liquidated. As a result of liquidation, the company's assets pass into the ownership of its beneficiary, which gives rise to income and tax obligations.

However, the new law contains a provision that allows for the tax-free liquidation of a foreign company. To take advantage of this, it is necessary to initiate the company's liquidation by the end of the current year and submit the required package of documents to the tax authorities together with the individual's income tax declaration.

If you have decided that you no longer need a company abroad, it is important to remember: the procedure for closing it must be carried out as correctly as possible. In this article, we will examine the options for liquidating a foreign company using Cyprus as an example.

For instance, a Cyprus company can be voluntarily dissolved under Section 327 of the Companies Law (Cap. 113). This can happen either through a voluntary decision of the members (winding-up) or through removal from the Register of Companies (striking off). What is the difference between these two procedures?

The new law allows for the voluntary liquidation of a CFC without paying tax on the income from liquidation; however, the procedure for closing the company must be as correct as possible.

Strike-off

The strike-off procedure is a simplified method of ceasing operations for companies that have discontinued all types of activity and have no intention of conducting business in the future.

The shareholders make a decision and notify the Board of Directors of it. The Board of Directors, in turn, notifies the Registrar. Before the application is sent to the Registrar, the following must take place: closing bank accounts, settling debts, selling assets, paying all taxes and state duties, and submitting tax returns and a final audited financial statement. Upon receiving the application, the Registrar sends a notice to the company (first notice) and publishes an announcement in the Official Gazette of its intention to remove the company from the Register of Companies after three months. After this period has elapsed, if no objections are received from shareholders, tax authorities, or creditors, a further notice (final notice) is sent and an announcement of the company's final removal from the Register is published in the government gazette.

The decision on removal is usually accepted by the Registrar within 6–9 months from the date the application is submitted. When choosing strike-off as a method of ceasing a company's operations, it should be taken into account that the Cyprus tax authorities may raise obstacles by sending letters objecting to the company's removal from the Register until the tax authorities have reviewed all of the company's submitted tax returns. The period during which the tax authority may maintain its objection filed with the Register of Companies can last several years, until the tax department has reviewed the tax returns filed by the specific company. The strike-off procedure is ideally suited for a dormant company (a registered but non-operating company with no open bank accounts).

Winding Up

Voluntary winding up is the voluntary liquidation of a company that ceases its operations, namely: closing bank accounts, settling debts, paying taxes and fees, and preparing reports under the supervision of a liquidator.

This procedure begins from the moment a resolution on voluntary liquidation is approved at a general meeting of shareholders. Within 14 days of the decision being made, notice of this decision must be given by way of an announcement in the Official Gazette. At the general meeting, the company must appoint one or more liquidators to distribute its assets and pay its debts, and must also agree on the liquidator's remuneration. Upon the appointment of a liquidator, all powers of the directors must cease, provided this is approved by the shareholders at the general meeting or by the liquidator. The liquidator must prepare a liquidation report indicating how the property was liquidated and, following this, must convene a general meeting of the company to present the report and provide explanations regarding it. The meeting is convened by an announcement in the Official Gazette, indicating the time, place, and purpose of the meeting, and is published at least 1 month before the meeting. Within one week after the meeting, the liquidator must send a copy of the report to the registrar of companies and provide it with a report on the conduct of the meeting. Upon receiving the relevant report from the liquidator, the Registrar must promptly register it, and after 3 months have elapsed from the date the report was registered, the company will be deemed liquidated. Please note that, in the case of voluntary liquidation, the company's liquidator or any interested party may, within 2 years after liquidation, initiate its restoration, and the court, if it deems it appropriate, may declare the liquidation void.

If a decision is made to cease operations, one should not give in to the temptation to simply "abandon" the company or conceal information about it from the Ukrainian tax authorities (this applies to any of your CFCs!). Information about the company will be retained in the registered agent's files, and, should a request be received from the tax authorities, the agent will be obligated to disclose all information about the company and its owner. The agent also has the right to remove its nominee shareholders and directors from their positions, disclosing the name of the company's declared beneficiary. Given the current environment of transparency and information exchange, we advise our clients to liquidate inactive companies by the end of 2021.

During the peak popularity of offshore business structuring, many Ukrainian enterprises attracted additional financing from foreign parent companies in the form of loans. The loans were issued for long terms and did not always provide for repayment, due to the inconveniences involved in that process. But sooner or later, the time comes to settle debts, and once the loan term expires, a number of questions arise — what should be done with this debt? How can it be repaid with minimal effort? And if the need arises to remove this offshore entity from the business structure — how can a foreign company be liquidated when it has receivables outstanding?

Thanks to the law on LLCs and ALCs adopted in 2018, an effective international tool for solving such problems has become available to Ukrainian business — the debt-to-equity swap. In essence, this is the conversion of a loan into the share capital of a subsidiary company. This tool has long proven itself effective in global practice, and in Ukraine it is only now starting to gain popularity. This has become especially relevant amid the height of deoffshorization.

Let us examine the procedure using an example of a classic Ukrainian business structure from the 2010–2014 period. A classic three-tier structure, in which: there is a parent company registered in Belize (or any other offshore jurisdiction); it establishes a holding company in Cyprus and funds its share capital to the required amount; the Cyprus holding company establishes a subsidiary company in Ukraine, which receives the loan for the further conduct of commercial activities.

An important feature of the procedure is that the law applies — and, accordingly, the possibility of converting a loan into share capital is available — only to two organizational and legal forms of enterprises: limited liability companies and additional liability companies. If the loan was received by an enterprise of a different form, it must either be reorganized, or another way of resolving the matter must be sought.

1. The procedure begins with a decision by the general meeting of the founders of the borrowing company to increase the borrower company's share capital by the amount of the loan.
2. After the decision is made, an agreement is concluded between the subsidiary and parent companies on the offset of the debt, along with a number of accompanying documents. The entire procedure is carried out in coordination with the servicing bank, which must confirm the transaction at the final stage.
3. Once the loan conversion procedure is completed, a repeat meeting of the founders decides on reducing the affiliated company's share capital to the required amount.

At this point, the matter of the loan debt is fully closed. The entire procedure takes around 9 months and has many nuances that are important to take into account during its implementation.

If a business needs to restructure and give up its holding company, it becomes possible to legally liquidate the parent company. Once the loan has been repaid and provided there is no outstanding payable/receivable debt, the company can be liquidated in accordance with the procedure established by law.

Thanks to this procedure, it is possible to legally close multi-million-dollar debts owed to foreign parent companies, as well as to remove an unnecessary offshore entity from the structure — one that only increases maintenance costs.

On May 21, draft law 1210 was signed by the President of Ukraine and became Law No. 466-IX, updating Ukraine's tax system. For businesses, the adoption of this anti-offshore law entails a new procedure for working with non-residents. One of the key innovations is state control over the foreign companies of Ukrainian residents (CFCs).

What is a CFC?

With the adoption of Draft Law 1210, the concept of controlled foreign companies (CFCs) appeared in Ukrainian legislation.

A CFC is a company registered abroad that is controlled by a resident of Ukraine. The CFC category includes not only legal entities, but also partnerships, trusts, funds, and charitable organizations.

If a resident of Ukraine owns a company abroad, they must report this to the tax authorities and, in certain cases, pay taxes.

In which situations will it be necessary to submit a CFC report to the tax authorities?

A resident of Ukraine must submit reports on their foreign companies if:

• their share in the foreign company is 50% or more;
• their share in the foreign company, together with other residents of Ukraine, is at least 10% (totaling 50% or more);
• they exercise actual control over the foreign company.

While the first two criteria are determined based on simple shareholding participation in the foreign company, the third criterion has a broader definition. A person is recognized as a controller if they have the ability to conclude agreements, dispose of assets and bank accounts, manage the company, or are simply declared to the bank as a beneficiary. Accordingly, even if a resident of Ukraine owns a company registered abroad through a nominee, but is listed with the bank as the beneficiary — a report on this company will still need to be submitted.

What information needs to be indicated in CFC reports?

A CFC report must contain detailed information about the company, its country of registration, ownership structure, information on income, employees, and the movement of funds. Copies of the CFC's financial statements confirming the amount of the company's profit for the reporting year are attached to the report. Thus, the taxpayer must provide absolutely all information about their foreign company.

Taxation of CFC Income

An additional obligation for owners of foreign companies will be the payment of taxes on the CFC's undistributed profit. If undistributed profit remains in the CFC's account by the end of the reporting period, its owner is obligated to pay 18% personal income tax + 1.5% military levy in Ukraine.

However, this rule has several exceptions. The tax is not levied if:

1. The total annual turnover of all foreign companies of a Ukrainian resident does not exceed EUR 2 million.
2. The CFC is a public company whose shares are freely traded on global stock exchanges.
3. There is a signed tax treaty between Ukraine and the CFC's country of registration; and one of the following two requirements is met:

• the CFC actually pays corporate income tax in its country of registration at a rate of no less than 13%;
• income received from dividends/interest/royalties does not exceed 50% of the company's total income.

Penalties for Violating CFC Requirements

The law contains a list of circumstances under which the tax authorities are entitled to impose fines on taxpayers for violating CFC rules:

• failure to submit a CFC report — a fine ranging from UAH 210,000 to UAH 2.1 million;
• late submission of a CFC report — a fine of up to UAH 105,000;
• failure to submit, or incomplete submission of, CFC documentation upon request from the tax authorities — a fine of up to UAH 2.1 million.

For which period will the first CFC reports be submitted?

Ukrainians must submit their first CFC report for the period 2022–2023, meaning that 2022 will be the first reporting year. However much time remains, it is necessary to prepare for this now.

What is recommended to do now to make things easier when submitting the first CFC report:

• conduct an analysis of your foreign business structure. Determine which companies are worth keeping and which are better closed;
• prepare and submit financial statements for all active companies;
• restore all "forgotten companies" and liquidate them in accordance with the procedure established by law. Many states do not close companies solely due to non-payment of the annual duty. The company and information about its beneficiary continue to be kept in the register, and the automatic exchange of tax information will allow countries to easily exchange all the necessary data;
• distribute the profits of your foreign companies. CFC profit is taxed at a rate of 19.5%, whereas receiving dividends is taxed at a rate of 9% + 1.5%.

With the adoption of Law 466, a new era of taxation is beginning in Ukraine. It will no longer be possible to hide money in the accounts of offshore companies. The state will now closely monitor the movement of Ukrainians' funds abroad and will put a stop to any attempts to shield funds from taxation. However, the law is not as frightening as it is made out to be. With the right approach, it is entirely possible to get the foreign part of your business in order in time and have no reason to fear any problems going forward.