License for crypto exchanger in Singapore

Now this jurisdiction sets propitious conditions for the activities of crypto-exchanges. Thanks to the legal framework developed by the jurisdictional regulator (MAS), companies dealing with cryptographic currencies may legally operate in a given country. In Singapore, non-securities firms essentially don’t need a permit. Exchange deals involving crypto-assets are covered by governmental regulation as well as operations with securities deals.

Our team is ready to give you highly-qualified professional services for the general establishment and licensing of commercial structures. We offer ready-made companies for sale in the UK, France, Germany, Estonia, Czech Republic and others.

Regulation of the crypto-environment in Singapore

As for digital assets exchanges licensing on local level, it’s mandatory for enterprises providing services for the purchase and sale of tokens individually marked by the regulator. It applies particularly to tokens used as traditional stock market tools.

If a token gives the holder rights to manage and receive incomes from the business-activities of the company, it may be classified as a security. It’s just one example of a token being recognized as a stock market tool, and in general there’re quite a plenty of conditions for this.

For crypto-exchangers planning to spread exchange services and having tokens considered as securities, licensing for the exchange of cryptographic currency is mandatory. Otherwise, their activities will be considered illegal.

Eligibility requirement basis

To get permission to provide crypto-services, a firm needs to fulfill certain conditions. Among them:

• implementation of a risk control system;
• development of transparent rules for listing coins on the exchange;
• providing evidence of the availability of the required technical and monetary resources, and qualified personnel, to confirm the project is truly secure;
• development of database for tracking all deals carried out on the stock exchange.

Regardless of the nature of the business-activity of the cryptocurrency exchanger, the firm needs to meet general standards and rules applicable to crypto-exchanges. The management of the enterprise should be carried out by a board of directors, including the chairman and general director, and specialized committees being in charge for issues of wages, audit, employees and conflict resolutions. Crypto-exchange owners are needed to to meet legislation for illegal monetary means circulation prevention, including identifying coin issuers before allowing them to trade.

To get permission to exchange digital currencies locally, it’s recommended to turn to our lawyers. We’ll give you support at all stages preparing the organization and carrying out the licensing process according to local law. Our team offers plenty of other licenses worldwide, particularly, Forex-license in Cyprus, gambling permit in Malta, EMI-licenses in European and Asian jurisdictions, etc.

Primary rules and standards

Crypto-trading platforms are covered by regulations as crypto-token service providers under the Payment Services Act being released in 2019. Tokens representing securities are covered by securities laws applicable to traditional financial tools. Therefore, exchanges allowing trading of security tokens are covered by Securities and Futures Act, adhering to the same regulations as securities exchanges (stock exchanges). Currently, an operator who intends to carry out activities related to crypto-currency in Singapore must have a crypto license.

A digital asset business-project needs to meet certain requirement points:

• local office-premises;
• the presence of executive director with local residency or 2 directors, one of them must also be a resident;
• presence of AML-officer with local residency;
• directors, founders, shareholders need to possess an impeccable business-reputation;
• availability of highly-qualified personnel;
• provision of mandatory documentation: business-plan, KYC/AML-policies;
• development and implementation of mechanisms for illegal monetary means circulation prevention;
• annual audit;
• contribution of initial capital.

When is a token considered a security?

Not all tokens are automatically considered securities under Singapore law. Assigning this status to them occurs on an individual basis, especially if they’re actually used as traditional stock market tools.

An example would be a situation where a token is a share, giving its holder rights to participate in firm’s management and receive profits. Likewise, a token may be a bond if it confirms a debt obligation of the issuer to the coin holder. There’re other scenarios when tokens are considered as stock market tools.

For crypto-exchanges wishing to add tokens to services provided, it’s obligatory to obtain a permit. It requires meeting next-mentioned standards:

• development of managing risks systems connected with current business-activities;
• correspondence with the obligation not to disturb public order;
• establishing transparent and fair rules and strictly following them;
• confirmation of funds’ availability, technical aspects and professional workers to ensure platform’s financial safeguard;
• obligation to notify the regulative authority about significant modifications in the exchange activities and identified violations of laws by workers or clients;
• creation of database on all deals carried out;
• correspondence with local laws, including data privacy regulations.

How much does it cost?

Cost of licensing a cryptocurrency-related business-project in Singapore is based on plenty of factors and is therefore calculated individually. Our company’s experts will carry out the calculation, bearing in mind client’s demands and desires. You’ll receive a fully-estimated price for license getting immediately before starting cooperation.

Our team is ready to help you in getting various other permits. Particularly, EMI-license in Belgium, Estonia, Germany, France and other jurisdictions.

How to get a crypto-license in Singapore

To obtain a permit, applicants need to be a company or corporation registered locally or abroad, but need to possess a branch in Singapore.

1. It’s mandatory to possess physically-set local office-premises.
2. In this case, 1 executive director needs to possess a residence, reside here or fit into the category of persons determined by the Regulator. It’s obligatory that individual capital-holders, the CEO, shareholders, directors, workers and the owner himself/herself fully meet all commercial and ethical standards, and their business-reputation isn’t undermined.
3. Key personnel need to be competent for their positions and possess expertise in the field related areas of financial services. Educational-background and qualifications need to meet all international standards.
4. Applicants undertake to create and implement quality compliance mechanisms being appropriate to the size and complexity of the business-activities.
5. A person should be hired to verify that instructions and rules are followed and who will have the necessary experience to monitor day-to-day operations and ensure compliance with regulations.
6. Establish an independent compliance office that will be located within the jurisdiction.
7. If an organization plans to provide financial services online, it should promptly test systems for resistance to hacking, identify risks, and fine-tune troubleshooting systems. Although this condition is not a primary step during the application stage, it is worth fulfilling before to get a business-permit.
8. A consistent and good audit is important, which can be carried out by the applicant’s internal audit function or by a third-party service provider.
9. The regulative authority may also require a document confirming liability from the company’s shareholders.

Taxation

1. Income tax-rate for overseas and local companies in Singapore is 17% of their profits.
2. New firms may be exempt from paying taxes, provided that they are registered in the state and are tax-residents of the country.
3. The company’s initial capital must be owned by no more than 20 shareholders, at least 1 of whom is an individual owning at least 10% of the company’s shares.
4. Firms can expect a 75% tax exemption on the first $100,000 of income, and 50% on the next $100,000.
5. VAT in Singapore is 7%, but dividends and capital gains are exempt.

Our advantages

If you’re interested in the option to get a crypto-license in Singapore, please contact the lawyers of our firm. The organization is actively involved in the areas of Fintech and crypto, providing clients with personalized solutions bearing in mind the business-model of each firm.

1. Fully-covering support at all stages of the licensing process.
2. Free consultations.
3. Corporate services.
4. Firms registration worldwide.
5. Support in the way to register an organization.
6. Working worldwide.
7. Guarantee of successful cooperation.

Our experts help you select the optimal category of permit, prepare the mandatory documentation and give fully-covering legal support for the process of legalizing a crypto-business according to Singaporian laws.