diff --git a/app/upgrades/nextupgrade/testdata/neutron_interchain_txs.wasm b/app/upgrades/nextupgrade/testdata/neutron_interchain_txs.wasm
new file mode 100644
index 000000000..6f3dc56be
Binary files /dev/null and b/app/upgrades/nextupgrade/testdata/neutron_interchain_txs.wasm differ
diff --git a/app/upgrades/nextupgrade/upgrades.go b/app/upgrades/nextupgrade/upgrades.go
index 3ac120b4c..dec75c001 100644
--- a/app/upgrades/nextupgrade/upgrades.go
+++ b/app/upgrades/nextupgrade/upgrades.go
@@ -3,6 +3,7 @@ package nextupgrade
 import (
 	"fmt"
 
+	wasmtypes "github.com/CosmWasm/wasmd/x/wasm/types"
 	"github.com/cosmos/cosmos-sdk/baseapp"
 	consensuskeeper "github.com/cosmos/cosmos-sdk/x/consensus/keeper"
 	paramstypes "github.com/cosmos/cosmos-sdk/x/params/types"
@@ -80,7 +81,7 @@ func CreateUpgradeHandler(
 		}
 
 		ctx.Logger().Info("Migrating interchaintxs module parameters...")
-		if err := setInterchainTxsParams(ctx, keepers.ParamsKeeper, storeKeys.GetKey(interchaintxstypes.StoreKey), codec); err != nil {
+		if err := setInterchainTxsParams(ctx, keepers.ParamsKeeper, storeKeys.GetKey(interchaintxstypes.StoreKey), storeKeys.GetKey(wasmtypes.StoreKey), codec); err != nil {
 			return nil, err
 		}
 
@@ -226,7 +227,7 @@ func migrateInterchainQueriesParams(ctx sdk.Context, paramsKeepers paramskeeper.
 	return nil
 }
 
-func setInterchainTxsParams(ctx sdk.Context, paramsKeepers paramskeeper.Keeper, storeKey storetypes.StoreKey, codec codec.Codec) error {
+func setInterchainTxsParams(ctx sdk.Context, paramsKeepers paramskeeper.Keeper, storeKey storetypes.StoreKey, wasmStoreKey storetypes.StoreKey, codec codec.Codec) error {
 	store := ctx.KVStore(storeKey)
 	var currParams interchaintxstypes.Params
 	subspace, _ := paramsKeepers.GetSubspace(interchaintxstypes.StoreKey)
@@ -239,6 +240,13 @@ func setInterchainTxsParams(ctx sdk.Context, paramsKeepers paramskeeper.Keeper,
 
 	bz := codec.MustMarshal(&currParams)
 	store.Set(interchaintxstypes.ParamsKey, bz)
+
+	wasmStore := ctx.KVStore(wasmStoreKey)
+	bzWasm := wasmStore.Get(wasmtypes.KeySequenceCodeID)
+	if bzWasm == nil {
+		return fmt.Errorf("KeySequenceCodeID not found during the upgrade")
+	}
+	store.Set(interchaintxstypes.ICARegistrationFeeFirstCodeID, bzWasm)
 	return nil
 }
 
diff --git a/app/upgrades/nextupgrade/upgrades_test.go b/app/upgrades/nextupgrade/upgrades_test.go
index ebba89756..bd4180a9c 100644
--- a/app/upgrades/nextupgrade/upgrades_test.go
+++ b/app/upgrades/nextupgrade/upgrades_test.go
@@ -3,7 +3,9 @@ package nextupgrade_test
 import (
 	"testing"
 
+	"github.com/CosmWasm/wasmd/x/wasm/keeper"
 	adminmoduletypes "github.com/cosmos/admin-module/x/adminmodule/types"
+	"github.com/cosmos/cosmos-sdk/types/errors"
 
 	crontypes "github.com/neutron-org/neutron/x/cron/types"
 	feeburnertypes "github.com/neutron-org/neutron/x/feeburner/types"
@@ -61,6 +63,9 @@ func (suite *UpgradeTestSuite) SetupTest() {
 	subspace, _ = app.ParamsKeeper.GetSubspace(interchaintxstypes.StoreKey)
 	pICAtx := interchaintxstypes.DefaultParams()
 	subspace.SetParamSet(ctx, &pICAtx)
+
+	codeIDBefore := suite.StoreTestCode(ctx, sdk.AccAddress("neutron1weweewe"), "testdata/neutron_interchain_txs.wasm")
+	suite.InstantiateTestContract(ctx, sdk.AccAddress("neutron1weweewe"), codeIDBefore)
 }
 
 func (suite *UpgradeTestSuite) TestGlobalFeesUpgrade() {
@@ -159,3 +164,46 @@ func (suite *UpgradeTestSuite) TestAdminModuleUpgrade() {
 	suite.Require().NoError(err)
 	suite.Require().Equal(uint64(1), id)
 }
+
+func (suite *UpgradeTestSuite) TestRegisterInterchainAccountCreationFee() {
+	var (
+		app = suite.GetNeutronZoneApp(suite.ChainA)
+		ctx = suite.ChainA.GetContext()
+	)
+
+	suite.FundAcc(sdk.AccAddress("neutron1weweewe"), sdk.NewCoins(sdk.NewCoin("untrn", sdk.NewInt(10000))))
+	contractKeeper := keeper.NewDefaultPermissionKeeper(app.WasmKeeper)
+	// store contract for register ica w/o fees
+	codeIDBefore := suite.StoreTestCode(ctx, sdk.AccAddress("neutron1_ica"), "testdata/neutron_interchain_txs.wasm")
+	contractAddressBeforeUpgrade := suite.InstantiateTestContract(ctx, sdk.AccAddress("neutron1_ica"), codeIDBefore)
+
+	upgrade := upgradetypes.Plan{
+		Name:   nextupgrade.UpgradeName,
+		Info:   "some text here",
+		Height: 100,
+	}
+	app.UpgradeKeeper.ApplyUpgrade(ctx, upgrade)
+
+	lastCodeID := app.InterchainTxsKeeper.GetICARegistrationFeeFirstCodeID(ctx)
+	// ensure that wasm module stores next code id
+	suite.Require().Equal(lastCodeID, codeIDBefore+1)
+
+	// store contract after upgrade
+	codeID := suite.StoreTestCode(ctx, sdk.AccAddress("neutron1_ica"), "testdata/neutron_interchain_txs.wasm")
+	contractAddressAfterUpgrade := suite.InstantiateTestContract(ctx, sdk.AccAddress("neutron1_ica"), codeID)
+	// register w/o actual fees
+	jsonStringBeforeUpgrade := `{"register": {"connection_id":"connection-1","interchain_account_id":"test-2"}}`
+	byteEncodedMsgBeforeUpgrade := []byte(jsonStringBeforeUpgrade)
+	_, err := contractKeeper.Execute(ctx, contractAddressBeforeUpgrade, sdk.AccAddress("neutron1_ica"), byteEncodedMsgBeforeUpgrade, nil)
+	suite.Require().NoError(err)
+
+	// register with fees
+	jsonStringAfterUpgrade := `{"register": {"connection_id":"connection-1","interchain_account_id":"test-3"}}`
+	byteEncodedMsgAfterUpgrade := []byte(jsonStringAfterUpgrade)
+	_, err = contractKeeper.Execute(ctx, contractAddressAfterUpgrade, sdk.AccAddress("neutron1weweewe"), byteEncodedMsgAfterUpgrade, sdk.NewCoins(sdk.NewCoin("untrn", sdk.NewInt(1000))))
+	suite.Require().NoError(err)
+
+	// failed register due lack of fees (fees required)
+	_, err = contractKeeper.Execute(ctx, contractAddressAfterUpgrade, sdk.AccAddress("neutron1weweewe"), byteEncodedMsgAfterUpgrade, nil)
+	suite.ErrorIs(err, errors.ErrInsufficientFunds)
+}
diff --git a/testutil/mocks/contractmanager/types/expected_keepers.go b/testutil/mocks/contractmanager/types/expected_keepers.go
index d27f64e5f..c69dcf649 100644
--- a/testutil/mocks/contractmanager/types/expected_keepers.go
+++ b/testutil/mocks/contractmanager/types/expected_keepers.go
@@ -7,6 +7,7 @@ package mock_types
 import (
 	reflect "reflect"
 
+	wasmtypes "github.com/CosmWasm/wasmd/x/wasm/types"
 	types "github.com/cosmos/cosmos-sdk/types"
 	gomock "github.com/golang/mock/gomock"
 	types0 "github.com/neutron-org/neutron/x/contractmanager/types"
@@ -18,6 +19,11 @@ type MockWasmKeeper struct {
 	recorder *MockWasmKeeperMockRecorder
 }
 
+func (m *MockWasmKeeper) GetContractInfo(ctx types.Context, contractAddress types.AccAddress) *wasmtypes.ContractInfo {
+	//TODO implement me
+	panic("implement me")
+}
+
 // MockWasmKeeperMockRecorder is the mock recorder for MockWasmKeeper.
 type MockWasmKeeperMockRecorder struct {
 	mock *MockWasmKeeper
diff --git a/testutil/mocks/interchaintxs/types/expected_keepers.go b/testutil/mocks/interchaintxs/types/expected_keepers.go
index 4b098863c..de9a6d792 100644
--- a/testutil/mocks/interchaintxs/types/expected_keepers.go
+++ b/testutil/mocks/interchaintxs/types/expected_keepers.go
@@ -7,6 +7,7 @@ package mock_types
 import (
 	reflect "reflect"
 
+	wasmtypes "github.com/CosmWasm/wasmd/x/wasm/types"
 	types "github.com/cosmos/cosmos-sdk/types"
 	types0 "github.com/cosmos/cosmos-sdk/x/auth/types"
 	types1 "github.com/cosmos/cosmos-sdk/x/capability/types"
@@ -111,6 +112,10 @@ type MockWasmKeeper struct {
 	recorder *MockWasmKeeperMockRecorder
 }
 
+func (m *MockWasmKeeper) GetContractInfo(ctx types.Context, contractAddress types.AccAddress) *wasmtypes.ContractInfo {
+	return &wasmtypes.ContractInfo{CodeID: 1}
+}
+
 // MockWasmKeeperMockRecorder is the mock recorder for MockWasmKeeper.
 type MockWasmKeeperMockRecorder struct {
 	mock *MockWasmKeeper
diff --git a/testutil/test_helpers.go b/testutil/test_helpers.go
index edab3f004..54ad72935 100644
--- a/testutil/test_helpers.go
+++ b/testutil/test_helpers.go
@@ -281,8 +281,9 @@ func (suite *IBCConnectionTestSuite) GetNeutronZoneApp(chain *ibctesting.TestCha
 	return testApp
 }
 
-func (suite *IBCConnectionTestSuite) StoreReflectCode(ctx sdk.Context, addr sdk.AccAddress, path string) uint64 {
+func (suite *IBCConnectionTestSuite) StoreTestCode(ctx sdk.Context, addr sdk.AccAddress, path string) uint64 {
 	// wasm file built with https://github.com/neutron-org/neutron-contracts/tree/main/contracts/reflect
+	// wasm file built with https://github.com/neutron-org/neutron-dev/tree/feat/ica-register-fee-update/contracts/neutron_interchain_txs
 	wasmCode, err := os.ReadFile(path)
 	suite.Require().NoError(err)
 
@@ -292,7 +293,7 @@ func (suite *IBCConnectionTestSuite) StoreReflectCode(ctx sdk.Context, addr sdk.
 	return codeID
 }
 
-func (suite *IBCConnectionTestSuite) InstantiateReflectContract(ctx sdk.Context, funder sdk.AccAddress, codeID uint64) sdk.AccAddress {
+func (suite *IBCConnectionTestSuite) InstantiateTestContract(ctx sdk.Context, funder sdk.AccAddress, codeID uint64) sdk.AccAddress {
 	initMsgBz := []byte("{}")
 	contractKeeper := keeper.NewDefaultPermissionKeeper(suite.GetNeutronZoneApp(suite.ChainA).WasmKeeper)
 	addr, _, err := contractKeeper.Instantiate(ctx, codeID, funder, funder, initMsgBz, "demo contract", nil)
diff --git a/wasmbinding/bindings/msg.go b/wasmbinding/bindings/msg.go
index 83ff57763..e4d8142f1 100644
--- a/wasmbinding/bindings/msg.go
+++ b/wasmbinding/bindings/msg.go
@@ -79,7 +79,7 @@ type SubmitTxResponse struct {
 type RegisterInterchainAccount struct {
 	ConnectionId        string    `json:"connection_id"`
 	InterchainAccountId string    `json:"interchain_account_id"`
-	RegisterFee         sdk.Coins `json:"register_fee"`
+	RegisterFee         sdk.Coins `json:"register_fee,omitempty"`
 }
 
 // RegisterInterchainAccountResponse holds response for RegisterInterchainAccount.
diff --git a/wasmbinding/message_plugin.go b/wasmbinding/message_plugin.go
index a130dae31..3a12a7e4f 100644
--- a/wasmbinding/message_plugin.go
+++ b/wasmbinding/message_plugin.go
@@ -707,7 +707,7 @@ func (m *CustomMessenger) performRegisterInterchainAccount(ctx sdk.Context, cont
 		FromAddress:         contractAddr.String(),
 		ConnectionId:        reg.ConnectionId,
 		InterchainAccountId: reg.InterchainAccountId,
-		RegisterFee:         reg.RegisterFee,
+		RegisterFee:         getRegisterFee(reg.RegisterFee),
 	}
 	if err := msg.ValidateBasic(); err != nil {
 		return nil, errors.Wrap(err, "failed to validate incoming RegisterInterchainAccount message")
@@ -921,3 +921,10 @@ func (m *CustomMessenger) isAdmin(ctx sdk.Context, contractAddr sdk.AccAddress)
 
 	return false
 }
+
+func getRegisterFee(fee sdk.Coins) sdk.Coins {
+	if fee == nil {
+		return make(sdk.Coins, 0)
+	}
+	return fee
+}
diff --git a/wasmbinding/test/custom_message_test.go b/wasmbinding/test/custom_message_test.go
index 6008a058f..a79dd73db 100644
--- a/wasmbinding/test/custom_message_test.go
+++ b/wasmbinding/test/custom_message_test.go
@@ -75,8 +75,8 @@ func (suite *CustomMessengerTestSuite) SetupTest() {
 
 func (suite *CustomMessengerTestSuite) TestRegisterInterchainAccount() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	err := suite.neutron.FeeBurnerKeeper.SetParams(suite.ctx, feeburnertypes.Params{
@@ -111,8 +111,8 @@ func (suite *CustomMessengerTestSuite) TestRegisterInterchainAccount() {
 
 func (suite *CustomMessengerTestSuite) TestRegisterInterchainAccountLongID() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	// Craft RegisterInterchainAccount message
@@ -135,8 +135,8 @@ func (suite *CustomMessengerTestSuite) TestRegisterInterchainAccountLongID() {
 
 func (suite *CustomMessengerTestSuite) TestRegisterInterchainQuery() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	err := testutil.SetupICAPath(suite.Path, suite.contractAddress.String())
@@ -173,8 +173,8 @@ func (suite *CustomMessengerTestSuite) TestRegisterInterchainQuery() {
 }
 
 func (suite *CustomMessengerTestSuite) TestCreateDenomMsg() {
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	senderAddress := suite.ChainA.SenderAccounts[0].SenderAccount.GetAddress()
@@ -201,8 +201,8 @@ func (suite *CustomMessengerTestSuite) TestMintMsg() {
 		lucky   = keeper.RandomAccountAddress(suite.T()) // We don't care what this address is
 	)
 
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	senderAddress := suite.ChainA.SenderAccounts[0].SenderAccount.GetAddress()
@@ -377,8 +377,8 @@ func (suite *CustomMessengerTestSuite) TestRemoveInterchainQueryFailed() {
 
 func (suite *CustomMessengerTestSuite) TestSubmitTx() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	senderAddress := suite.ChainA.SenderAccounts[0].SenderAccount.GetAddress()
@@ -410,8 +410,8 @@ func (suite *CustomMessengerTestSuite) TestSubmitTx() {
 
 func (suite *CustomMessengerTestSuite) TestSubmitTxTooMuchTxs() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	err := testutil.SetupICAPath(suite.Path, suite.contractAddress.String())
@@ -507,8 +507,8 @@ func (suite *CustomMessengerTestSuite) TestSoftwareUpgradeProposal() {
 
 func (suite *CustomMessengerTestSuite) TestTooMuchProposals() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	err := testutil.SetupICAPath(suite.Path, suite.contractAddress.String())
@@ -547,8 +547,8 @@ func (suite *CustomMessengerTestSuite) TestTooMuchProposals() {
 
 func (suite *CustomMessengerTestSuite) TestNoProposals() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	err := testutil.SetupICAPath(suite.Path, suite.contractAddress.String())
@@ -572,8 +572,8 @@ func (suite *CustomMessengerTestSuite) TestNoProposals() {
 
 func (suite *CustomMessengerTestSuite) TestAddRemoveSchedule() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	// Set admin so that we can execute this proposal without permission error
@@ -625,8 +625,8 @@ func (suite *CustomMessengerTestSuite) TestAddRemoveSchedule() {
 
 func (suite *CustomMessengerTestSuite) TestResubmitFailureAck() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	// Add failure
@@ -660,8 +660,8 @@ func (suite *CustomMessengerTestSuite) TestResubmitFailureAck() {
 
 func (suite *CustomMessengerTestSuite) TestResubmitFailureTimeout() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	// Add failure
@@ -692,8 +692,8 @@ func (suite *CustomMessengerTestSuite) TestResubmitFailureTimeout() {
 
 func (suite *CustomMessengerTestSuite) TestResubmitFailureFromDifferentContract() {
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
-	suite.contractAddress = suite.InstantiateReflectContract(suite.ctx, suite.contractOwner, codeID)
+	codeID := suite.StoreTestCode(suite.ctx, suite.contractOwner, "../testdata/reflect.wasm")
+	suite.contractAddress = suite.InstantiateTestContract(suite.ctx, suite.contractOwner, codeID)
 	suite.Require().NotEmpty(suite.contractAddress)
 
 	// Add failure
diff --git a/wasmbinding/test/custom_query_test.go b/wasmbinding/test/custom_query_test.go
index 9180bf079..cdc185060 100644
--- a/wasmbinding/test/custom_query_test.go
+++ b/wasmbinding/test/custom_query_test.go
@@ -37,8 +37,8 @@ func (suite *CustomQuerierTestSuite) TestInterchainQueryResult() {
 	)
 
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(ctx, owner, "../testdata/reflect.wasm")
-	contractAddress := suite.InstantiateReflectContract(ctx, owner, codeID)
+	codeID := suite.StoreTestCode(ctx, owner, "../testdata/reflect.wasm")
+	contractAddress := suite.InstantiateTestContract(ctx, owner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	// Register and submit query result
@@ -109,8 +109,8 @@ func (suite *CustomQuerierTestSuite) TestInterchainQueryResultNotFound() {
 	)
 
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(ctx, owner, "../testdata/reflect.wasm")
-	contractAddress := suite.InstantiateReflectContract(ctx, owner, codeID)
+	codeID := suite.StoreTestCode(ctx, owner, "../testdata/reflect.wasm")
+	contractAddress := suite.InstantiateTestContract(ctx, owner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	// Query interchain query result
@@ -132,8 +132,8 @@ func (suite *CustomQuerierTestSuite) TestInterchainAccountAddress() {
 	)
 
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(ctx, owner, "../testdata/reflect.wasm")
-	contractAddress := suite.InstantiateReflectContract(ctx, owner, codeID)
+	codeID := suite.StoreTestCode(ctx, owner, "../testdata/reflect.wasm")
+	contractAddress := suite.InstantiateTestContract(ctx, owner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	err := testutil.SetupICAPath(suite.Path, contractAddress.String())
@@ -164,8 +164,8 @@ func (suite *CustomQuerierTestSuite) TestUnknownInterchainAcc() {
 	)
 
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(ctx, owner, "../testdata/reflect.wasm")
-	contractAddress := suite.InstantiateReflectContract(ctx, owner, codeID)
+	codeID := suite.StoreTestCode(ctx, owner, "../testdata/reflect.wasm")
+	contractAddress := suite.InstantiateTestContract(ctx, owner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	err := testutil.SetupICAPath(suite.Path, contractAddress.String())
@@ -192,8 +192,8 @@ func (suite *CustomQuerierTestSuite) TestMinIbcFee() {
 	)
 
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(ctx, owner, "../testdata/reflect.wasm")
-	contractAddress := suite.InstantiateReflectContract(ctx, owner, codeID)
+	codeID := suite.StoreTestCode(ctx, owner, "../testdata/reflect.wasm")
+	contractAddress := suite.InstantiateTestContract(ctx, owner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	query := bindings.NeutronQuery{
@@ -224,8 +224,8 @@ func (suite *CustomQuerierTestSuite) TestFullDenom() {
 	)
 
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(ctx, owner, "../testdata/reflect.wasm")
-	contractAddress := suite.InstantiateReflectContract(ctx, owner, codeID)
+	codeID := suite.StoreTestCode(ctx, owner, "../testdata/reflect.wasm")
+	contractAddress := suite.InstantiateTestContract(ctx, owner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	query := bindings.NeutronQuery{
@@ -257,8 +257,8 @@ func (suite *CustomQuerierTestSuite) TestDenomAdmin() {
 	suite.Require().NoError(err)
 
 	// Store code and instantiate reflect contract
-	codeID := suite.StoreReflectCode(ctx, owner, "../testdata/reflect.wasm")
-	contractAddress := suite.InstantiateReflectContract(ctx, owner, codeID)
+	codeID := suite.StoreTestCode(ctx, owner, "../testdata/reflect.wasm")
+	contractAddress := suite.InstantiateTestContract(ctx, owner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	senderAddress := suite.ChainA.SenderAccounts[0].SenderAccount.GetAddress()
diff --git a/x/contractmanager/types/expected_keepers.go b/x/contractmanager/types/expected_keepers.go
index 88db20887..f30e346b8 100644
--- a/x/contractmanager/types/expected_keepers.go
+++ b/x/contractmanager/types/expected_keepers.go
@@ -1,12 +1,14 @@
 package types
 
 import (
+	wasmtypes "github.com/CosmWasm/wasmd/x/wasm/types"
 	sdk "github.com/cosmos/cosmos-sdk/types"
 )
 
 // WasmKeeper defines the expected interface needed to cam cosmwasm contracts.
 type WasmKeeper interface {
 	HasContractInfo(ctx sdk.Context, contractAddress sdk.AccAddress) bool
+	GetContractInfo(ctx sdk.Context, contractAddress sdk.AccAddress) *wasmtypes.ContractInfo
 	Sudo(ctx sdk.Context, contractAddress sdk.AccAddress, msg []byte) ([]byte, error)
 }
 
diff --git a/x/interchainqueries/keeper/grpc_query_test.go b/x/interchainqueries/keeper/grpc_query_test.go
index ee3eb7a5c..391d58d0f 100644
--- a/x/interchainqueries/keeper/grpc_query_test.go
+++ b/x/interchainqueries/keeper/grpc_query_test.go
@@ -476,8 +476,8 @@ func (suite *KeeperTestSuite) TestQueryResult() {
 	clientKey := host.FullClientStateKey(suite.Path.EndpointB.ClientID)
 	ctx := suite.ChainA.GetContext()
 	contractOwner := wasmKeeper.RandomAccountAddress(suite.T())
-	codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-	contractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+	codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+	contractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 	registerMsg := iqtypes.MsgRegisterInterchainQuery{
 		ConnectionId: suite.Path.EndpointA.ConnectionID,
 		Keys: []*iqtypes.KVKey{
diff --git a/x/interchainqueries/keeper/keeper_test.go b/x/interchainqueries/keeper/keeper_test.go
index beaca0287..704815240 100644
--- a/x/interchainqueries/keeper/keeper_test.go
+++ b/x/interchainqueries/keeper/keeper_test.go
@@ -126,8 +126,8 @@ func (suite *KeeperTestSuite) TestRegisterInterchainQuery() {
 		)
 
 		// Store code and instantiate reflect contract.
-		codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-		contractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+		codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+		contractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 		suite.Require().NotEmpty(contractAddress)
 
 		err := testutil.SetupICAPath(suite.Path, contractAddress.String())
@@ -383,8 +383,8 @@ func (suite *KeeperTestSuite) TestUpdateInterchainQuery() {
 					ctx           = suite.ChainA.GetContext()
 					contractOwner = wasmKeeper.RandomAccountAddress(suite.T())
 				)
-				codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-				newContractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+				codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+				newContractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 				suite.Require().NotEmpty(newContractAddress)
 				msg = iqtypes.MsgUpdateInterchainQueryRequest{
 					QueryId:         1,
@@ -411,8 +411,8 @@ func (suite *KeeperTestSuite) TestUpdateInterchainQuery() {
 			)
 
 			// Store code and instantiate reflect contract.
-			codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-			contractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+			codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+			contractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 			suite.Require().NotEmpty(contractAddress)
 
 			err := testutil.SetupICAPath(suite.Path, contractAddress.String())
@@ -553,8 +553,8 @@ func (suite *KeeperTestSuite) TestRemoveInterchainQuery() {
 					ctx           = suite.ChainA.GetContext()
 					contractOwner = wasmKeeper.RandomAccountAddress(suite.T())
 				)
-				codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-				newContractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+				codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+				newContractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 				suite.Require().NotEmpty(newContractAddress)
 				msg = iqtypes.MsgRemoveInterchainQueryRequest{
 					QueryId: 1,
@@ -583,8 +583,8 @@ func (suite *KeeperTestSuite) TestRemoveInterchainQuery() {
 			)
 
 			// Store code and instantiate reflect contract.
-			codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-			contractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+			codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+			contractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 			suite.Require().NotEmpty(contractAddress)
 
 			err := testutil.SetupICAPath(suite.Path, contractAddress.String())
@@ -1421,8 +1421,8 @@ func (suite *KeeperTestSuite) TestSubmitInterchainQueryResult() {
 			)
 
 			// Store code and instantiate reflect contract.
-			codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-			contractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+			codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+			contractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 			suite.Require().NotEmpty(contractAddress)
 
 			err := testutil.SetupICAPath(suite.Path, contractAddress.String())
@@ -1691,8 +1691,8 @@ func (suite *KeeperTestSuite) TestRemoveFreshlyCreatedICQ() {
 	)
 
 	// Store code and instantiate reflect contract.
-	codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-	contractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+	codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+	contractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	// Top up contract address with native coins for deposit
@@ -1724,7 +1724,7 @@ func (suite *KeeperTestSuite) TestRemoveFreshlyCreatedICQ() {
 	suite.Require().Equal(params.QuerySubmitTimeout, registeredQuery.SubmitTimeout)
 	suite.Require().Greater(uint64(ctx.BlockHeight()), registeredQuery.LastSubmittedResultLocalHeight+registeredQuery.SubmitTimeout)
 
-	newContractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+	newContractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 	suite.Require().NotEmpty(newContractAddress)
 	resp, err := msgSrv.RemoveInterchainQuery(sdk.WrapSDKContext(ctx), &iqtypes.MsgRemoveInterchainQueryRequest{
 		QueryId: 1,
diff --git a/x/interchainqueries/keeper/process_block_results_test.go b/x/interchainqueries/keeper/process_block_results_test.go
index 8313f6a71..198acffca 100644
--- a/x/interchainqueries/keeper/process_block_results_test.go
+++ b/x/interchainqueries/keeper/process_block_results_test.go
@@ -272,8 +272,8 @@ func (suite *KeeperTestSuite) TestUnpackAndVerifyHeaders() {
 			)
 
 			// Store code and instantiate reflect contract.
-			codeID := suite.StoreReflectCode(ctx, contractOwner, reflectContractPath)
-			contractAddress := suite.InstantiateReflectContract(ctx, contractOwner, codeID)
+			codeID := suite.StoreTestCode(ctx, contractOwner, reflectContractPath)
+			contractAddress := suite.InstantiateTestContract(ctx, contractOwner, codeID)
 			suite.Require().NotEmpty(contractAddress)
 
 			err := testutil.SetupICAPath(suite.Path, contractAddress.String())
diff --git a/x/interchaintxs/keeper/keeper.go b/x/interchaintxs/keeper/keeper.go
index be503d56f..ab65451af 100644
--- a/x/interchaintxs/keeper/keeper.go
+++ b/x/interchaintxs/keeper/keeper.go
@@ -92,3 +92,14 @@ func (k Keeper) ChargeFee(ctx sdk.Context, payer sdk.AccAddress, fee sdk.Coins)
 func (k Keeper) GetAuthority() string {
 	return k.authority
 }
+
+// GetICARegistrationFeeFirstCodeID returns code id, starting from which we charge fee for ICA registration
+func (k Keeper) GetICARegistrationFeeFirstCodeID(ctx sdk.Context) (codeID uint64) {
+	store := ctx.KVStore(k.storeKey)
+	bytes := store.Get(types.ICARegistrationFeeFirstCodeID)
+	if bytes == nil {
+		k.Logger(ctx).Debug("Fee register ICA code id key don't exists, GetLastCodeID returns 0")
+		return 0
+	}
+	return sdk.BigEndianToUint64(bytes)
+}
diff --git a/x/interchaintxs/keeper/msg_server.go b/x/interchaintxs/keeper/msg_server.go
index 9e79b0690..ace0f34f5 100644
--- a/x/interchaintxs/keeper/msg_server.go
+++ b/x/interchaintxs/keeper/msg_server.go
@@ -47,8 +47,11 @@ func (k Keeper) RegisterInterchainAccount(goCtx context.Context, msg *ictxtypes.
 		return nil, errors.Wrapf(ictxtypes.ErrNotContract, "%s is not a contract address", msg.FromAddress)
 	}
 
-	if err := k.ChargeFee(ctx, senderAddr, msg.RegisterFee); err != nil {
-		return nil, errors.Wrapf(err, "failed to charge fees to pay for RegisterInterchainAccount msg: %s", msg)
+	// if contract is stored after [last] upgrade, we're not going charge fees for register ICA
+	if k.sudoKeeper.GetContractInfo(ctx, senderAddr).CodeID >= k.GetICARegistrationFeeFirstCodeID(ctx) {
+		if err := k.ChargeFee(ctx, senderAddr, msg.RegisterFee); err != nil {
+			return nil, errors.Wrapf(err, "failed to charge fees to pay for RegisterInterchainAccount msg: %s", msg)
+		}
 	}
 
 	icaOwner := ictxtypes.NewICAOwnerFromAddress(senderAddr, msg.InterchainAccountId)
diff --git a/x/interchaintxs/types/expected_keepers.go b/x/interchaintxs/types/expected_keepers.go
index 6c777acbf..f565e1059 100644
--- a/x/interchaintxs/types/expected_keepers.go
+++ b/x/interchaintxs/types/expected_keepers.go
@@ -1,6 +1,7 @@
 package types
 
 import (
+	wasmtypes "github.com/CosmWasm/wasmd/x/wasm/types"
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	"github.com/cosmos/cosmos-sdk/x/auth/types"
 	capabilitytypes "github.com/cosmos/cosmos-sdk/x/capability/types"
@@ -25,6 +26,7 @@ type BankKeeper interface {
 
 type WasmKeeper interface {
 	HasContractInfo(ctx sdk.Context, contractAddress sdk.AccAddress) bool
+	GetContractInfo(ctx sdk.Context, contractAddress sdk.AccAddress) *wasmtypes.ContractInfo
 	Sudo(ctx sdk.Context, contractAddress sdk.AccAddress, msg []byte) ([]byte, error)
 }
 
diff --git a/x/interchaintxs/types/keys.go b/x/interchaintxs/types/keys.go
index beaf14ae2..7fd3d09c1 100644
--- a/x/interchaintxs/types/keys.go
+++ b/x/interchaintxs/types/keys.go
@@ -18,7 +18,11 @@ const (
 )
 
 const (
+	// parameters key
 	prefixParamsKey = iota + 1
+	// prefix of code id, starting from which we charge fee for ICA registration
+	prefixICARegistrationFeeFirstCodeID = iota + 2
 )
 
 var ParamsKey = []byte{prefixParamsKey}
+var ICARegistrationFeeFirstCodeID = []byte{prefixICARegistrationFeeFirstCodeID}
diff --git a/x/transfer/keeper/keeper_test.go b/x/transfer/keeper/keeper_test.go
index f9636cf35..c8b857836 100644
--- a/x/transfer/keeper/keeper_test.go
+++ b/x/transfer/keeper/keeper_test.go
@@ -90,8 +90,8 @@ func (suite KeeperTestSuite) TestTransfer() { //nolint:govet // it's a test so i
 	testOwner := sdktypes.MustAccAddressFromBech32(testutil.TestOwnerAddress)
 
 	// Store code and instantiate reflect contract.
-	codeID := suite.StoreReflectCode(ctx, testOwner, reflectContractPath)
-	contractAddress := suite.InstantiateReflectContract(ctx, testOwner, codeID)
+	codeID := suite.StoreTestCode(ctx, testOwner, reflectContractPath)
+	contractAddress := suite.InstantiateTestContract(ctx, testOwner, codeID)
 	suite.Require().NotEmpty(contractAddress)
 
 	ctx = suite.ChainA.GetContext()