Starting a Bitcoin Treasury Company in Germany

Business Structure & Legal Form

• Company type: A German limited company (GmbH) is often ideal. It requires at least €25,000 share capital (half paid-up at founding). An AG (public company) is possible for larger capital needs (min. €50k capital). An entrepreneurial company (UG) with €1 start-up capital is also possible for very small ventures. In any case, ensure the corporate purpose (Satzung) explicitly allows “holding and investing in digital assets (Bitcoin)” to avoid later amendments. A GmbH offers limited liability and is commonly used for crypto ventures.
• No special “crypto company” form: Germany does not have a special legal vehicle for crypto; use standard forms (GmbH, AG, etc.) . You can hold Bitcoin on the balance sheet as a corporate asset. Corporations (GmbH/AG) are taxed as companies, not under private rules.
• Licensing: Simply holding or trading Bitcoin for the company’s own account does not require a BaFin license . German law (KWG) treats crypto as a “unit of account” (financial instrument) , so providing financial services (custody, exchange, brokerage) to others requires a BaFin license. However, a treasury company buying/selling Bitcoin only for itself is not providing custody or exchange services to third parties, so no crypto-license is needed. (By contrast, any company accepting crypto payments or offering custodial wallets to customers must be licensed as a crypto-custodian under KWG §1(1a) No.6 .) In short: maintain Bitcoin for your company’s own treasury, and no crypto-license is triggered .
• Capital raising / funds: If you intend to raise money from external investors specifically for crypto investment (like a crypto fund), different rules (e.g. investment fund law KAGB, MiFID) may apply, but a simple corporate treasury model (equity or loans from founders/shareholders) avoids these regimes.

Regulatory Compliance (BaFin, AML/KYC)

• Crypto assets as financial instruments: Under the German Banking Act (KWG), Bitcoin and similar tokens are officially “crypto assets” (units of account) and therefore financial instruments . Any business activities involving trading or custody for others are regulated. For example, operating a crypto exchange or wallet service requires BaFin authorization , and since Jan 2020 Germany has required authorization for “crypto custody” services .
• No license needed for treasury use: If the company merely accepts Bitcoin (e.g. as payment) or holds it on its balance sheet, no BaFin permit is required . A purely proprietary crypto trading (own account buying/selling) also does not require a license unless you are acting as a broker or advertising external trading services. (The rule-of-thumb: if you are not providing a financial service to customers, BaFin doesn’t step in.)
• Anti-money laundering: The German Money Laundering Act (GwG) and new crypto transfer regulation (KryptoWTransferV) apply to crypto businesses. If you are only holding and trading your own Bitcoin, you’re not a crypto exchanger or custodian by law, so these rules generally do not force obligations on you. However, be aware that AML laws apply to exchanges, custodians and the like. If you ever offer services or deal with customer crypto funds, you must comply with GwG (KYC/AML checks). Even as a treasury company, good practice is to use regulated exchanges or custodians that follow AML rules.
• EU Regulation (MiCAR): In 2025 the EU’s Markets in Crypto-Assets Regulation (MiCAR) comes into force. It will require crypto exchanges and wallet providers to be licensed EU-wide. For a company holding Bitcoin only for itself, MiCAR doesn’t impose new obligations directly. But future compliance (e.g. if raising funds in crypto or using stablecoins) should be monitored under MiCAR.
• Reporting and disclosure: If you become a public company (e.g. AG), you’ll have to disclose crypto holdings in financial reports. BaFin and BAFin-published guidance should be consulted if you expand into customer services .

Tax Implications

• Corporate income tax: A GmbH or AG in Germany pays corporation tax (15% plus 5.5% solidarity) on its profits, and trade tax (~14–17% depending on location). Combined tax is roughly 30% of taxable profit . Profits or losses from Bitcoin trading flow into company profit and are taxed like any other business income.
• Treatment of Bitcoin gains: If Bitcoin are held as a business asset, sale proceeds are treated as business income . The gain is calculated as sale price minus acquisition cost (no special exemptions). Unlike private investors, corporations do not get a “1-year holding” tax exemption. (Private individuals who sell crypto after >1 year pay no income tax on gains, but this does not apply to companies.) Thus, any crypto gains (or losses) simply increase (or decrease) taxable business profits .
• Deductibility and losses: Losses on Bitcoin trades can offset other corporate income (subject to normal loss carryforward rules). Documentation of purchase costs and timestamps is essential for tax basis.
• Value Added Tax (VAT): Exchanges of Bitcoin for euros are VAT-exempt in Germany (following EU law). The ECJ ruled that Bitcoin is like currency, so buying/selling it is not subject to VAT . The German Finance Ministry confirms Bitcoin transactions are VAT-free . This means your company need not charge VAT when selling Bitcoin, and crypto purchases are not VAT-deductible (just like forex trades). Note: Other services (e.g. advisory, custody fees) remain VAT-taxable if applicable.
• Other taxes: For completeness, income from crypto mining or staking (if the company engages in this) is also taxed as business income, valued at market price when received . However, as a pure treasury strategy you may avoid mining/staking and focus on outright holding.

Accounting & Bookkeeping

• German GAAP (HGB): Under German commercial law, Bitcoin must be shown on the balance sheet as an asset. It is not cash, but an intangible or inventory item. You should capitalize purchased Bitcoin at cost (the euro value at purchase) . How to classify depends on intent: if held long-term as a treasury reserve, treat it as an intangible asset (Anlagevermögen); if you trade it frequently as part of normal operations, you could treat it as inventory (Umlaufvermögen) . In either case, subsequent valuation follows HGB rules:
  
  • As an intangible fixed asset, apply the milder impairment rule – write down only for lasting value declines (no write-up) .
  • As inventory, apply the strict lower-of-cost-or-market (Niederstwertprinzip) each year .
    In practice, many companies treat Bitcoin as intangible (since it’s more like an investment than sellable inventory) . Any gains or losses upon sale are booked in profit & loss (other operating income/expense) as the difference between sale proceeds and book value .
• IFRS (if applicable): If your company uses IFRS (typically only required if listed or large), Bitcoin will fall under IAS 38 Intangible Assets (unless held for sale as inventory) . There is no specific IFRS for crypto, but the IFRIC has confirmed that crypto not held for sale is an intangible, measured at cost. (IAS 38 allows an optional revaluation model if an active market exists, but this is rarely used.)
• Bookkeeping: Maintain detailed records of all transactions. Track purchase dates, amounts and costs. For every sale, record sale price and corresponding book value. Follow normal accounting controls. Also account for any forks/airdrops or staking rewards: these are treated as income at the market value when received.
• Audit and disclosure: German auditors will expect clear crypto accounting. Because crypto balances can materially affect financials, it’s wise to provide transparent notes in the annual report (e.g. number of Bitcoins, valuation policy) .

Custody & Security Best Practices

• Multi-signature and segregation: Do not keep all coins in one wallet/key. Use multi-signature wallets (requiring multiple independent keys to authorize a transaction). For example, a 2-of-3 or 3-of-5 multi-sig arrangement among different executives or trustees prevents a single person from moving funds alone.
• Cold storage: Keep the vast majority of Bitcoin in cold wallets (offline, not connected to the internet). Use hardware wallets (Ledger, Trezor, ColdCard, etc.) stored in secure locations (safe deposit boxes, private vaults). Ensure multiple geographically-separated backups of seed phrases in fireproof safes. Even storing hardware devices in bank vaults or secure facilities is common.
• Use regulated custodians: For added safety and convenience, you may partner with an institutional custodian that is BaFin-licensed (e.g. Tangany, BitGo Europe, etc.). They offer bank-like custody: cold storage, insurance, compliance, and audited security procedures. (For instance, BitGo Europe obtained a BaFin crypto custody license in 2023 .) If you keep self-custody, implement strict internal controls: limited access, 2FA on wallets, audit logs, and regular reconciliation of holdings.
• Insurance: Consider insuring the holdings if using a third-party custodian (many offer insurance). If fully self-custody, insurance is hard – focus on airtight security instead.
• Operational security: Train staff on social engineering and phishing risks. Use dedicated devices for key management. Do not reuse addresses, and consider hardware security modules (HSMs) or multi-party computation (MPC) solutions. Essentially, treat crypto like valuable corporate assets (like cash in vaults) with similar rigor. Regularly test and update your security measures.

Banking & Fiat On/Off-Ramp

• Bank accounts: Not all banks welcome crypto business. Seek out crypto-friendly banks or banking-as-a-service providers. For example, Solarisbank (a Berlin fintech) offers B2B crypto brokerage services: it provides corporate euro accounts, custody, and an API (in partnership with Bitstamp) to swap euros for Bitcoin and vice versa . Other options include German crypto banks (e.g. Bankhaus von der Heydt for custody) or using trusted EU/Swiss crypto-banks (e.g. SEBA or Sygnum in Switzerland, though outside EU).
• Crypto exchanges and brokers: Use regulated exchanges for converting fiat. Major European platforms like Kraken, Coinbase (Germany/Europe), Bitstamp, Bitpanda, or Börse Stuttgart’s BSDEX allow SEPA bank transfers for Euro/BTC trades. These platforms handle KYC/AML for you and let your company deposit euros, buy Bitcoin, and withdraw Bitcoin (or sell back to euros) quickly. Since Bitcoin sales are VAT-free, the exchange fees are the main cost. Always use reputable, licensed exchanges (e.g. ones registered with BaFin or other EU regulators) to avoid fraud or banking complications.
• Payment processors and services: You can also use crypto payment services (e.g. BitPay for businesses) if you plan to accept crypto payments. For treasury conversion, focus on trading platforms rather than payment processors.
• On/off ramp considerations: Banks will require documentation of the crypto source (e.g. invoice to customer, mining contracts, or ownership records). Keep clear records for any fiat transfers related to Bitcoin trades. Ensure your AML policies (even if not legally required) include screening where appropriate.
• Emerging options: Watch for upcoming crypto features in mainstream banks under MiCAR. Also, consider stablecoins for certain transactions (once MiCAR-stablecoins are live, e.g. approved EUR stablecoin) – but note stablecoin holdings may have their own accounting/tax treatment and require MiCAR issuer compliance.

Accounting/Reporting Requirements

• Documentation: As with any asset, maintain invoices or records for every crypto transaction. For tax and audit purposes, the exact euro value of each Bitcoin transaction must be documented (e.g. using exchange rates on transaction dates).
• Bookkeeping: Record crypto purchases as asset acquisitions; record sales as asset disposals with P/L impact. Use appropriate chart-of-accounts entries (e.g. “Other financial assets” or “Inventory – cryptocurrencies”). In bookkeeping software, treat Bitcoin analogously to foreign currency or precious metals.
• Annual reporting: In the financial statements (Bilanz and GuV), disclose crypto holdings. Under HGB, list Bitcoin under either immaterielle Vermögensgegenstände (if Anlagevermögen) or Vorräte (if Umlaufvermögen) , with valuation notes. Include a narrative in the Anhang describing valuation methods and total holdings.
• Audit expectations: Auditors will want proof of ownership. Use public blockchain records to tie transactions to your company’s wallets (address control) plus private keys control attestations. Given high volatility, auditors focus on correct impairment/write-downs if applicable.

Regulatory Compliance (BaFin) – Summary

• Crypto assets are regulated as financial instruments (units of account) in the KWG . Any service (exchange, brokerage, custody) offered to third parties requires BaFin approval. Since Jan 1, 2020, “crypto custody business” (holding crypto for others) is a licensed banking activity , and crypto exchanges/trading also require licenses .
• As a proprietary treasury holding only your company’s Bitcoin, no crypto license is needed . You do not need BaFin permission to buy/sell or keep Bitcoin on your books as long as you’re not servicing outside customers. Just follow standard company laws.
• Comply with AML/KYC as required: although you’re not a crypto service provider, if you interact with exchanges or payment services they will do KYC on your company. Internally, implement appropriate controls for large payments.
• MiCAR/MiFID: The EU Crypto-Asset Regulation (MiCAR) may impose future rules on stablecoins or fundraising, but for now focus on German law (BaFin, GwG).

Best Practices for Crypto Treasury

• Custody: Keep most Bitcoin offline (cold storage) with multiple keys. Use hardware or multi-sig solutions. Example: a 2-of-3 multi-sig wallet with keys held by separate executives.
• Partners: Consider reputable custodians (BaFin-regulated) to handle security/insurance, or at least third-party wallets like BitGo, Tangany, or Coinbase Custody for institutional clients. These have bank-grade security.
• Controls: Enforce internal policies: no single person can transfer funds alone, use 2FA, maintain key backups, rotate keys if someone leaves, etc. Think of crypto like treasury cash in a vault.
• Insurance: If feasible, insure holdings (some custodian services offer insurance up to hundreds of millions). For fully self-custody, emphasize prevention over insurance.
• Reporting: Regularly reconcile on-chain wallet balances with accounting records. Use blockchain explorers and accounting software for crypto to aid audits.

Banking and Fiat On/Off-Ramping

• Bank accounts: Open a business euro account with a crypto-friendly bank or fintech. Solarisbank (with Bitstamp integration) is one example that provides corporate accounts and an API to buy/sell crypto . Other EU crypto banks include SEBA, Sygnum or Bank Frick (Liechtenstein); these can service German companies. Fidor Bank was known for crypto clients (check current status). Inquire about banks that explicitly allow crypto deposits (some traditional banks may refuse transfers from exchanges).
• Exchanges and Trading: Use major licensed exchanges for converting fiat to Bitcoin. For example, Coinbase (DE), Kraken, Bitstamp, Bitpanda, or Stuttgart’s BSDEX support SEPA transfers. These platforms handle compliance, letting you deposit euros, buy BTC, then either hold or withdraw to your wallet. When selling BTC, you can withdraw euros by SEPA back to your corporate account (no VAT on the trade ).
• Payment processors: If your company also accepts crypto payments (e.g. from customers), use PCI-level secure payment processors (e.g. BitPay). For treasury conversion, rely on exchanges rather than spotty OTC desks.
• Foreign exchange and stablecoins: For extra liquidity, you could use euro-denominated stablecoins (once regulated) or forex swaps. But be cautious: stablecoin holdings have separate regulatory considerations (MiCAR compliance as “referenced asset tokens”).

Examples of Public “Bitcoin Treasury” Companies

• The Blockchain Group (France/Germany) – Euronext-listed company formerly a tech holding. In late 2023 it pivoted to a “Bitcoin Treasury” strategy. By mid-2025 it had amassed 1,471 BTC ($154 M) on its balance sheet and advertises being “Europe’s first Bitcoin treasury company” . It raises capital via stock offerings to buy more BTC.
• Evertz Pharma GmbH (Germany) – A Frankfurt-based cosmetics company. In 2020 it began allocating profits to Bitcoin. By May 2025 it announced an additional purchase of 100 BTC (~€10 M) for its treasury, calling itself the first German company with a dedicated Bitcoin-reserve strategy . The family-run firm openly states it treats Bitcoin as a scarce reserve asset alongside its cash.
• (Other examples for context): In the US, MicroStrategy (a Nasdaq-listed software firm) famously pioneered the model with over 200,000 BTC. European analogues are emerging: beyond The Blockchain Group and Evertz, private ventures like StoneRidge, Taurus (Switzerland) or BlockFi (US) hold significant crypto. But in Germany, these examples show the path.

These examples demonstrate feasibility: German corporate law and tax systems accommodate Bitcoin on the balance sheet, provided usual corporate governance and tax rules are followed . With proper legal structure, accounting and compliance, a German company can effectively build a Bitcoin treasury.

Sources: German regulatory and tax guidance (BaFin, Federal Finance Ministry) and industry reports .