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The Singapore crypto license positions the country as a prime destination for crypto enthusiasts and businesses in search of a supportive setting. The country's regulatory authority consistently enhances its guidelines, offering valuable clarifications for cryptocurrency exchange licensing. Consulting24 experts are well-prepared to assist you in the process of registering a cryptocurrency company and securing a crypto license in Singapore.
CRYPTO LICENSE SINGAPORE: OUR SKILLED TEAM WILL ASSIST OUR CLIENTS IN SECURING IT.
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SINGAPORE CRYPTO LICENSE EXPLAINED
Singapore, recognized as a prominent financial nucleus in Southeast Asia, operates as a parliamentary republic. Its sophisticated market economy and conducive business ambiance attract entities from various regulated sectors, including finance, cryptocurrency, and payment systems. The nation has positioned itself as a prestigious international financial services hub, garnering respect and recognition worldwide. A significant part of its appeal lies in its low tax framework for both local and offshore establishments, along with a sensible fee regulation approach.
A distinctive aspect of Singapore's regulatory landscape is its direct legal oversight over cryptocurrency exchanges, making it a standout among a few jurisdictions with such governance. The journey towards a regulated crypto environment saw the National Regulator, the Monetary Authority of Singapore (MAS), providing clarifications and expressing its stance on cryptocurrencies, Initial Coin Offerings (ICOs), and the licensing of cryptocurrency exchanges from 2014 to 2018.
The regulatory framework took a pivotal turn in 2019 with the enactment of the Payment Service Act 2019. This law necessitates companies engaged in the exchange of cryptocurrencies for other digital or fiat currencies to obtain a designated license, categorized as either a Small Payment Institution or a Major Payment Institution. This legislation underpins Singapore's commitment to creating a structured and secure operational terrain for cryptocurrency exchanges, reflecting a balanced approach towards fostering innovation while ensuring consumer protection and adherence to compliance standards. Through this, Singapore continues to solidify its standing as a reliable and regulated haven for crypto-related ventures, encapsulating the essence of acquiring a crypto license in Singapore.
Request 30-min FREE consulting about Singapore crypto license.
Cryptocurrency exchanges serve as middlemen in the trading of virtual currencies and fiat money. It's crucial to highlight that when a cryptocurrency exchange ventures into offering services for purchasing and selling tokens, which are regulated as securities, obtaining a license for operating as a full-fledged stock exchange becomes imperative.
REQUIREMENTS FOR GETTING A CRYPTO LICENSE IN SINGAPORE
In order to secure a cryptocurrency license in Singapore, a company needs to fulfill the following criteria:
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Register a company in Singapore;
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Set up an office in Singapore;
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Have at least one director who is a resident of Singapore;
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Establish a risk management system tailored for cryptocurrency operations;
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Develop strict rules and procedures for token listings on the platform;
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Update the regulator of all changes related to the operation of the exchange;
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Adhere to anti-money laundering legislation, privacy guidelines, and other pertinent regulations.
The regulator also stipulates particular requirements for the personnel of crypto companies. The mandatory positions include:
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Chairman;
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Chief Executive Officer (CEO);
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Members of the Board of Directors;
The board of directors should comprise:
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An audit committee;
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A nominating committee;
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A conflict resolution committee, among other similar committees.
The executives of the company are expected to uphold high ethical standards, possess an unblemished reputation, and have relevant education and experience in the financial domain.
BENEFITS OF SECURING CRYPTO EXCHANGE LICENSE IN SINGAPORE
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Reputation and Trustworthiness: Being a prestigious financial hub with global acclaim, Singapore's licensure significantly elevates the standing of your cryptocurrency firm, fostering trust among customers and collaborators.
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Regulatory Clarity and Transparency: Singapore's regulatory framework for cryptocurrency entities ensures lawful and transparent operations. The national regulator outlines clear directives and guidelines aiding in compliance with the requisite regulatory norms.
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Tax Advantages: The low income tax rate, absence of Value Added Tax (VAT) on cryptocurrencies, and a zero percent (0%) tax on offshore earnings present financial incentives.
4. MAS is introducing stringent measures for Digital Payment Token (DPT) services:
No trade incentives
No financing/leverage
No credit card payments
Limit crypto in net worth
Read the full announcement by MAS here.
PRICE & TERMS TO OBTAINING LICENSE IN SINGAPORE
License Type | Standard License | Major License |
|---|---|---|
Authorized capital | 100 000 Singapore Dollars | 250 000 Singapore Dollars |
Insurance deposit | No | 200 000 Singapore Dollars |
Limits | $3 million (or its equivalent in a foreign currency), for any one of those payment services; or
$6 million (or its equivalent in a foreign currency), for 2 or more of those payment services; | None |
Government fee | 1000 SGD / yearly | 1500 SGD / yearly |
Besides the application fees, supervisory fees are also applicable. The annual license fee is $4,000. Licensees are obligated to pay annual licensing fees, the amount of which is aligned with the type of license and services offered. A licensee engaging in payment systems is required to pay the license fees pertinent to the payment services they utilize.
The primary legislations governing the realm of cryptocurrency are the Securities and Futures Act (SAF) of 2001 and the Payment Services Act of 2019, which was enacted in early 2020. The latter legislation introduced the notion of "digital payment token" (DPT), mandating companies interested in offering related services to obtain licensure as payment institutions, categorized as either Small Payment Institutions or Major Payment Institutions.
According to the Payment Services Act, service providers exclusively offering digital payment tokens, issued by a central bank or financial institution for a specific purpose, are exempt from obtaining a license as they are already adequately regulated.
It's crucial to note that obtaining a Singapore crypto exchange license is mandated exclusively for those exchanges acting as intermediaries in trading tokens governed by securities laws.
A crypto exchange that wants to trade with any utility tokens also must comply with:
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The Financial Advisers Act (passed in 2001, revised 2020 edition);
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The Trust Company Act (enacted in 2005, revised edition 2020).
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Insurance Act (enacted 1966, revised edition 2021);
THE PROCESS AND TIMELINE FOR OBTAINING A CRYPTO LICENSE IN SINGAPORE
The journey to securing a cryptocurrency license in Singapore unfolds through several stages:
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Setting Up a Singapore Private Limited Company: The first step entails establishing a private limited company within Singapore. Following this, preparation for the cryptocurrency license application begins. This phase includes the compilation of all requisite documents, drafting a business plan, elucidating the business model, the risk management framework, and other necessary materials. The duration of application preparation could fluctuate based on the business complexity and the readiness of the needed documents.
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Application Submission to Monetary Authority of Singapore (MAS): The completed application is then forwarded to the Monetary Authority of Singapore (MAS), the regulatory body overseeing this domain. The application scrutiny period by MAS ranges from a few weeks to several months, during which MAS meticulously examines the provided documents, undertakes verification processes, and might solicit additional details or clarifications.
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Examination and Evaluation: In this phase, MAS assesses the company's adherence to the stipulated standards and requirements for cryptocurrency operators in Singapore. The examination encompasses a review of financial performance, risk management framework, accuracy of documentation, and legislative compliance.
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Decision and License Acquisition: Post-evaluation, MAS reaches a decision on whether to accord or decline the cryptocurrency license. Upon approval, the company is granted the respective license.
The timeline for Singapore crypto exchange license approval is contingent on the application's complexity, the comprehensiveness of the supplied documentation, among other variables. Typically, the approval process for a cryptocurrency license in Singapore spans between 9 to 12 months.
Navigating the cryptocurrency regulatory landscape in Singapore might appear daunting if you're a newcomer to the industry. However, the expert advisors at Gofaizen & Sherle are at your disposal to demystify all entrepreneurial aspects within this jurisdiction. They are equipped to address your inquiries and offer the requisite assistance.
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