Virtual Asset Service Provider License

VASPs in Seychelles can apply for a license to engage in one or more of the following permissible activities:

1. Virtual Asset Wallet Service Providers
   • Function: Custodial services
   • Activities:
     
     • Transfer of virtual assets, Initial Coin Offerings (ICOs), and Non-Fungible Tokens (NFTs) for clients (individuals, institutional investors, or funds).
     • Safekeeping and management of virtual assets, ICOs, and NFTs.
2. Virtual Asset Exchange
   • Functions:
     
     1. Transfer services
     2. Conversion services
     3. Exchange services
   • Activities:
     
     • Exchange between virtual assets, ICOs, NFTs, and fiat currencies.
     • Transfer of virtual assets, ICOs, and NFTs for clients.
     • Safekeeping and management of virtual assets, ICOs, and NFTs.
3. Virtual Asset Issuers
   • Function: Issuing virtual assets such as ICOs, NFTs, and stablecoins.
   • Activities:
     
     • Launching Initial Coin Offerings (ICOs) for fundraising purposes.
     • Creating NFT collections and digital tokens for various industries.
     • Issuing stablecoins pegged to fiat currencies or commodities.
4. Virtual Asset Payment Service Providers
   • • Function: Facilitating payments using virtual assets.
     • Activities:
       
       • Enabling crypto-based transactions for e-commerce and retail.
       • Providing payment gateway services for virtual assets.
       • Developing wallet integrations for virtual asset payments.

The Financial Services Authority (FSA) may issue additional guidelines on these activities.

The Authority will not grant a VASP license unless the applicant meets the following criteria:

• Legal Structure: Must be a company incorporated under the Companies Act, 1972 (excluding overseas companies) or an International Business Company (IBC) under the International Business Companies Act, 2016.
• Directors: Must have at least two fit and proper directors.
• Capital Requirements: Must meet the minimum paid-up capital as per the VASP Regulations 2024.
• Substance Requirements: Must demonstrate compliance with the Third Schedule of the Act.
• Financial Stability: Must have the necessary financial resources, including capital, solvency, and insurance.
• Fit and Proper Assessment: Directors, principal officers, and key persons must meet fit and proper criteria, considering their:
  1. Financial status
  2. Qualifications and experience
  3. Competency, honesty, and fairness
  4. Reputation, character, and integrity
• Cybersecurity Compliance: Must meet cybersecurity measures under Section 22.
• Operational Premises: Must have specified premises or data solutions for maintaining records.
• Public Interest: Approval must align with public interest considering the applicant’s size, scope, and complexity.
• Compliance Officer: Must appoint a compliance officer to ensure adherence to regulations.
• Annual Audits: Financial accounts must be audited annually by a qualified auditor.
• Substantial Presence in Seychelles:
  1. At least one resident director
  2. A fully manned physical office in Seychelles
  3. Adequate qualified staff
  4. Records and documents accessible locally
  5. Complaint handling in Seychelles
  6. At least 2 board meetings and 4 management meetings annually in Seychelles
• Record-Keeping: All records and documentation must be maintained for at least 7 years.

• Financial Soundness: Licensees must have capital and financial resources appropriate to their scale, risk, and complexity.
• Adequate Capital: Must maintain the prescribed minimum paid-up capital at all times.
• Proper Accounting & Reporting: Must establish and maintain proper accounting records and financial reporting.
• Insurance Requirements: Must maintain required insurance policies to cover risks.

A licensed VASP can benefit from a tax rate of 1.5% applicable on the assessable (gross) and zero withholding tax rate on dividends or interest payable.

A VASP license granted under the Virtual Asset Services Provider Act, 2024 is valid from the date of issue until it is revoked, suspended, or surrendered.

Annual Obligations of a VASP Licensee

• Each year in January, the licensee must:
  1. Pay the annual license fees as set out in the Second Schedule of the Act.
  2. Lodge a compliance form with the Authority, as prescribed.
  3. Lodge a substance requirement report in the prescribed form.
  4. Lodge a cyber security report in accordance with Section 22 of the Act.
  5. Submit additional information as may be specified by the Authority.

Pro-Rata Reduction of First Annual License Fee

If a license is granted after March (i.e., in April or later), the first annual license fee will be reduced on a quarterly pro-rata basis. The fee is calculated based on the quarter in which the license was first granted.

An application submitted to the Authority for a VASP license must comprise the following searchable documents, which shall be submitted digitally:

Required Documents

1. Cover Letter
   
   • Signed by the applicant.
   • Must include reasons for applying for the license.
   • A list of all the documents included in the application pack.
2. Completed Application Form
3. Application Fee - SCR 75,000
4. Certified True Copies of the Applicant’s Constitutional Documents
5. Personal Questionnaire Forms
   
   • Completed by each Director, Compliance Officer, and Key Individuals of the application.
6. Questionnaire Form for Shareholders and Beneficial Owners
   • To be completed by each shareholder and beneficial owner who holds no management position in the proposed VASP.
7. Audited Financial Statements
   
   • For the past two (2) years if the applicant has been operating as a VASP before the introduction of the law.
   • OR Financial forecast if newly incorporated or has no history as a VASP.
8. Proof of Source of Funds or Wealth
9. Proof of Physical Place of Business
   
   • Title Deed of Premises OR Lease Agreement OR Subleasing Agreement.
   • Consent letter from the owner of the premises (if applicable).
10. Detailed Business Plan
    • OR Updated Business Plan for existing entities already licensed and regulated by the Authority.
11. Insurance Requirements
    
    • A copy of the insurance quotation (appropriate to the proposed nature and size of the business).
    • OR an exemption approval granted by the Authority allowing the insurance policy to be sourced from a foreign jurisdiction.
12. Certified True Copies of the Proposed Auditor’s Credentials
    
    • Certificate of membership.
    • Qualifications.
    • License (as applicable).
13. Financial Institution Authorization (if applicable)
    
    • Authorization letter issued by the Central Bank of Seychelles permitting the entity to undertake any permissible activities under the Virtual Asset Services Provider Act, 2024.
14. Valid License or Authorization for Foreign Applicants
    
    • A certified valid license or authorization to conduct such business under the laws of a recognized jurisdiction, if the applicant is operating outside Seychelles.
15. Service Level Agreement
    
    • A copy of agreements related to:
      
      • Cloud Storage Solutions
      • Platforms
      • Other Technology-Based Solutions

Required Manuals and Policies

A copy of the following manuals and policies must be included in the application:

• 1. Internal Procedure Manual
  2. Client Service Agreement
  3. Conflict of Interest Policy
  4. Compliance Manual
  5. Anti-Money Laundering (AML) Manual
  6. Complaints Handling Manual
  7. Business Continuity Plan
  8. Institutional Risk Assessment
  9. Customer Due Diligence Procedures
  10. Transaction Monitoring Procedures
  11. Sanction Screening Procedures
  12. Segregation of Asset Policy
  13. Record-Keeping Policy
  14. Cyber Security Policy