Cryptocurrency Business Incorporation | Crypto Company Formation in India | Indian Crypto Company Regulatory Compliance | Legal Requirements for Crypto Business

Incorporating Crypto Company in India 2024

Overview: Crypto Company in India

Investors contemplating the launch of a crypto enterprise in India should take note that the government exclusively recognizes blockchain operations. As per the Indian Budget of 2018, local authorities do not classify cryptocurrency as legal tender within India. Despite the prevailing stance on cryptocurrency activities, it's essential to acknowledge that India has witnessed a surge in individuals participating in this sector. In the latter half of 2017, there was a remarkable 290% increase in the number of individuals involved in crypto-related endeavours. Our team of CAs is available to provide guidance on this matter, and those interested in obtaining an Indian cryptocurrency license are welcome to reach out to us.

In this blog, we will discuss how to start a cryptocurrency business in India.


Topics Covered

Current State of Cryptocurrency in India

While the Indian government has officially declared that cryptocurrencies are not recognized as legal tender in the country, this does not equate to their outright prohibition. This is primarily due to the absence of any specific legislation governing this burgeoning market. Currently, possessing assets such as Bitcoin and similar virtual currencies is not a violation of the law in India. It is crucial to note, however, that virtual currencies cannot be employed as a means of payment within India, despite the government's evident interest in promoting blockchain operations. Blockchain is considered a dependable framework and is viewed as a promising foundation for nurturing a digital economy in India, according to Indian authorities. This may indeed begin with blockchain technology. Our team of CAs can offer more extensive insights into the substantial advantages of investing in blockchain technologies. To embark on a crypto business venture in India, acquiring an office space with a legitimate address is the initial step. This office space could also be a virtual office space.

Cryptocurrency Business Incorporation | Crypto Company Formation in India | Indian Crypto Company Regulatory Compliance | Legal Requirements for Crypto Business

Navigating the Regulatory Landscape: Cryptocurrency Regulations in India

The initial version of the "Crypto and Regulation of Official Digital Currency Bill," unfortunately imposed a complete ban on all cryptocurrency-related transactions. Under this version, only activities like cryptocurrency mining would have been permissible for crypto businesses to operate in India. However, a new draft of the bill emerged in 2021, offering improved prospects for those interested in the cryptocurrency industry. This new draft empowered the Reserve Bank of India (RBI) to issue an official virtual token in accordance with the provisions of the Crypto and Regulation of Official Digital Currency Bill.

Furthermore, there is a strong possibility that businesses will have the opportunity to apply for crypto exchange licenses in India. While the law has not yet been formally enacted, it is expected to pass in the future. Notably, on February 1, 2022, the government officially recognized cryptocurrencies as "virtual digital assets" and introduced specific tax regulations related to them. 

Our CAs can assist you if you decide to open a crypto business in India.

Starting a Cryptocurrency Company in India

Launching a cryptocurrency firm in India does not entail specific regulatory requirements until new legislation is enacted. Whether you are a domestic or international business owner, your primary obligation is to comply with the Companies Act of 2013. Furthermore, you must fulfil a set of additional prerequisites, including:

  • Applying for a Tax Deduction and Collection Account Number (TAN),
  • Acquiring a Permanent Account Number (PAN),
  • Obtaining a Goods and Services Identification Account Number (GSTIN).

It's worth noting that in certain cases, obtaining a cryptocurrency license in India may become necessary, especially for activities related to the issuance and trading of various Virtual Digital Assets (VDAs).

Indian Crypto Exchange Requirements

Establishing virtual currency exchanges in India is a viable option once correct licenses are obtained. However, these entities are obligated to disclose their financial performance, including profits, losses, and cryptocurrency holdings, as well as client deposits. Additionally, Indian cryptocurrency exchanges must establish and adhere to Know Your Customer (KYC) standards, along with maintaining comprehensive records of their platform's traders and clients.

It's worth noting that the most recent information available on crypto businesses in India was released in March 2022. Up until that point, there were no explicit regulations governing the cryptocurrency exchanges. Nonetheless, it is widely expected that platforms will eventually be required to obtain such licenses due to the increasing number of regulatory measures being introduced.

Building a Skilled Workforce for Cryptocurrency Company

Entrepreneurs aiming to establish a presence in India's burgeoning cryptocurrency industry should consider hiring skilled employees. India aligns itself with the global trend in this field. Professionals who possess an understanding of cryptocurrency processes, blockchain technology, and initial coin offerings (ICOs) are in great demand. Positions related to blockchain activities hold particular significance for individuals seeking employment in this rapidly emerging sector. India boasts a sizable workforce with abundant experience in the IT and related industries, making it an advantageous resource for blockchain businesses.

Taxation on Crypto Companies

It has been reported that the taxation framework for cryptocurrency in India has been established as follows:

  1. Effective from April 2022, income generated from cryptocurrency transactions is subject to a 30% tax. No deductions whatsoever is allowed.

  2. Additionally, these cryptocurrency businesses are expected to pay the Goods and Services Tax (GST).

  3. Furthermore, any transactions conducted by such businesses is also liable for a 1% TDS (tax deducted at the source).


Establishing a cryptocurrency company in India presents both challenges and potentially lucrative opportunities. While the legal standing of cryptocurrencies in India remains uncertain, it's important to note that the Crypto companies are not explicitly prohibited in India as evident by growing crypto ecosystem in India. To operate in this space, potential cryptocurrency firms in India must navigate a series of steps:

  1. Obtaining Necessary Licenses: This includes securing approvals from various government authorities, as well as ensuring compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

  2. Risk Assessment: Entrepreneurs must carefully evaluate the various risks and challenges associated with the industry, including regulatory ambiguity, market volatility, and the ever-present threat of cyberattacks.

By conducting thorough research and strategic planning to address these challenges, entrepreneurs can increase their chances of successfully launching and operating a cryptocurrency company in India.

Cryptocurrency Business Incorporation | Crypto Company Formation in India | Indian Crypto Company Regulatory Compliance | Legal Requirements for Crypto Business