With MiCAR fully in force crypto asset activities are entering a new phase – one defined by regulation, transparency, and investor protection.
As the asset class moves within a regulated framework, firms are adapting their structures and governance to operate under consistent rules across the European Union. Luxembourg, with its long experience supervising digital-asset activity and its designation of the CSSF as National Competent Authority (NCA) for MiCAR, provides a stable environment for Crypto-Asset Service Providers (CASPs) to establish and scale operations in Europe.
What can you do from Luxembourg?
Firms are able to offer the full CASP suite, including:
Custody and safekeeping
Operate a trading platform
Advice
Crypto/fiat and crypto/crypto exchange
Order execution
Portfolio management
Reception & transmission of orders
Placement
Transfer services
Why crypto firms choose Luxembourg
Luxembourg offers one of the most proactive, well-defined, and established regulatory environments for firms looking to establish operations. Key advantages include:
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1. Institutional trust and a proactive regulator
Luxembourg’s position as Europe’s leading hub for blockchain-based finance gives crypto firms immediate credibility. Its reputation for sound regulation and financial stability builds confidence with institutional clients, partners, and investors – a key advantage for firms serving professional markets.
The CSSF, Luxembourg’s financial regulator, has been ahead of the curve for over a decade as it was the first EU authority to licence a crypto exchange (Bitstamp in 2016) and has built out extensive experience in digital assets since. Firms establishing in Luxembourg benefit from a highly competent and pragmatic regulator whose approach is recognised across Europe for being rigorous yet constructive. Operating under CSSF supervision gives crypto firms a level of credibility that resonates strongly with institutional clients, who value the oversight and experience of a respected NCA.
2. EU passporting rights
Under MiCAR, crypto firms authorised in Luxembourg can passport their services seamlessly across 27 EU member states. This removes the complexity of fragmented national licences and allows firms to build one regulatory base while scaling across Europe.
Luxembourg offers firms the ideal combination of regulatory clarity and EU-wide reach.
3. Business-friendly environment
Luxembourg offers attractive corporate tax rates, with the general corporate income tax set at 16% for companies, resulting in an overall tax rate of approximately 23.87% for Luxembourg City. Additionally, the country provides investment tax credits, with rates ranging from 12% to 18% for companies investing in digital transformation. Luxembourg also offers an 80% tax exemption on eligible income from intellectual property under its IP regime. This environment, combined with targeted incentives and initiatives such as the LHoFT, helps these firms integrate quickly and benefit from local resources and networks.
4. Access to institutional clients and capital
Luxembourg’s financial centre is home to leading banks, asset managers, and fund administrators, which offers crypto firms unparalleled proximity to institutional capital and strategic partners. The arrival of Standard Chartered, Zodia Custody, and Swissquote’s digital asset platform in the country signals growing institutional adoption.
5. Infrastructure built for digital finance
Luxembourg combines modern digital infrastructure with a financial system that is engineered towards cross-border activity. Its high-security data centres, advanced connectivity, and commitment to high standards of digital operational resilience create a secure base for crypto custody, trading, and tokenisation platforms. Firms benefit from a stable environment aligned with institutional-grade cybersecurity, reliability, and scalability.
What's happening in practice
Getting started
Firms planning to provide crypto-asset services in Luxembourg should begin by identifying their MiCAR permissions and engaging early with the CSSF’s dedicated CASP supervision team, which offers practical guidance on authorisation, governance, and operational readiness. Working with local legal and compliance advisers helps ensure alignment with MiCAR requirements on custody, risk management, and client protection. Once authorised, firms can passport their services across the EU from Luxembourg, supported by the country’s strong regulatory expertise and established FinTech ecosystem.
