Cryptocurrency

How to Get a VASP License in Seychelles?

With the rise of digitalization, the global cryptocurrency market is expanding at an unprecedented pace. As more businesses explore opportunities in this dynamic industry, choosing the right jurisdiction for market entry and operational setup becomes crucial. Among the many global crypto-friendly destinations, Seychelles stands out as a preferred hub due to its business-friendly environment, flexible regulations, and cost-effective setup.

Known as the smallest country in Africa, Seychelles has emerged as a key player in the crypto space, attracting entrepreneurs and investors seeking a smooth and secure regulatory framework. Its reputation as an economically viable jurisdiction for crypto businesses continues to grow, making it a hotspot for blockchain startups, crypto exchanges, and digital asset firms.

Recognizing the evolving nature of the crypto industry, Seychelles introduced the Virtual Asset Service Providers Act (VASP Act), which came into effect on September 1, 2024. This legislation mandates that all businesses providing services related to crypto assets must obtain a VASP license. The act not only regulates virtual asset service providers but also imposes strict penalties for unlicensed activities and non-compliance.

For businesses aiming to operate in Seychelles, securing a VASP license is no longer an option—it is a necessity. Compliance with the regulatory framework ensures seamless market access, credibility, and protection against risks such as hefty fines or operational shutdowns.

In this blog, we will take you through the step-by-step process of obtaining a VASP license in Seychelles, outlining the key requirements, regulatory guidelines, and the benefits of setting up a crypto business in this thriving jurisdiction. Whether you’re a startup or an established crypto firm, understanding these regulations will help you navigate the market with confidence and ease.

What is VASP License and Why is it Important?

A VASP (Virtual Asset Service Provider) license is a regulatory authorization required for businesses engaged in cryptocurrency trading, exchange services, wallet operations, and other crypto-related activities. In Seychelles, this license is regulated by the Financial Services Authority (FSA) to ensure that VASPs comply with Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations.

Holding a VASP license allows businesses dealing with cryptocurrencies or virtual assets to promote their services and onboard customers in the local market. Typically, these licenses are issued by state financial authorities, such as central banks or financial supervisory bodies, once all necessary requirements are met.

A VASP license ensures that businesses adhere to strict regulatory frameworks, including AML (Anti-Money Laundering), KYC (Know Your Customer), and CFT (Counter-Terrorism Financing) guidelines. However, obtaining the license is not a one-time process—it requires ongoing compliance. Failure to meet regulatory requirements or violations of the law can lead to license suspension or cancellation.

Therefore, securing a VASP license not only legitimizes business operations but also enhances trust and credibility among users, investors, and partner organizations.

Types of Virtual Asset Services in Seychelles

The four types of Virtual Asset services in Seychelles are as follows:

1. Virtual Asset Wallet Providers (Crypto Wallets)
2. A crypto wallet primarily offers custodial services to clients. This includes:
   • Transferring virtual assets
   • Safekeeping virtual assets
   • Managing virtual assets on behalf of clients

3. Virtual Asset Exchange (Cryptocurrency Exchange)
4. A virtual asset exchange facilitates the exchange, transfer, and conversion of virtual assets. Its key functions include:
   • Exchanging virtual assets for fiat currencies
   • Converting between different virtual assets
   • Transferring and safeguarding virtual assets on behalf of users

5. Virtual Asset Broking
6. Virtual asset broking involves providing intermediary and facilitation services for digital asset transactions. These services include:
   • Facilitating exchanges between virtual assets and fiat currencies via exchanges and wallets
   • Enabling transactions between different virtual assets
   • Ensuring the safekeeping of virtual assets through exchanges and wallets

7. Virtual Asset Investment Providers
8. Virtual asset investment providers offer investment management services for digital assets. Their core functions include:
   • Managing portfolios of virtual assets for clients
   • Providing investment advice on digital assets

Benefits of Securing a VASP License in Seychelles

The list of key benefits of obtaining a VASP license in Seychelles is given below:

Crypto-Friendly Regulations

• Seychelles offers a progressive legal framework for blockchain businesses, ensuring legitimacy in the virtual asset space.

Tax Advantages

• With no capital gains tax, Seychelles is an attractive destination for crypto entrepreneurs worldwide.

Privacy & Confidentiality

• The corporate structure in Seychelles allows businesses to maintain privacy while ensuring compliance with regulations.

Access to Global Markets

• A licensed crypto business in Seychelles can operate internationally, expanding its reach across global markets.

Banking & Payment Processing Opportunities

• Holding a VASP license enhances business credibility, making it easier to open bank accounts with financial institutions.

Building Reputation

• Obtaining a VASP license demonstrates compliance with local laws, enhancing the company’s credibility and trust among clients and partners.

Business-Friendly Environment

• Seychelles has a low corporate tax structure, making it one of the most attractive locations for virtual asset businesses.

Improved Market Opportunities

• A VASP license provides global market access, attracting clients who prioritize compliance and security in virtual asset transactions. It also increases investor confidence, making it easier to secure funding.

Strong Consumer Protection Measures

• Licensed businesses follow strict regulatory measures, safeguarding client assets and promoting trust and integrity within the industry.

Operational Benefits

• The requirement for a physical office in Seychelles allows for better operational oversight, improved management, and stronger relationships with local stakeholders.

Regulatory Requirements to Get a Seychelles VASP License

The list of regulatory requirements to get a Seychelles VASP license are as given below:

• Minimum two directors (one director must be a resident of Seychelles)
• Minimum one shareholder (either individual or corporate entity without any residency requirements)
• Capital requirements range from US$25,000 to US$100,000, depending on the services offered.
• At least one public officer in Seychelles
• Directors and principal officers must demonstrate appropriate skills and integrity
• Applicant must maintain an adequate financial reserve
• The applicant company must have a robust cybersecurity protocol in order to protect client data.
• VASPs must have a registered physical office in Seychelles with a fully staffed
• The VASP offices shall be managed by qualified and experienced personnel
• All records and documentation required by the Act must be accessible from the concerned local office.
• Must hold a minimum of two board meetings annually in Seychelles
• Must conduct at least four management meetings annually in Seychelles
• Must comply with Anti Money Laundering (AML) and Counter Terrorism Financing (CTF) regulations.

Who can Apply for a VASP License in Seychelles?

The given below entities can apply for a VASP license in Seychelles:

• Only a corporate entity, such as a domestic company or an International Business Company (IBC) incorporated in Seychelles, can apply for a VASP license.
• Individuals (natural persons) are not eligible to apply for a VASP license.
• Entities already licensed under the Financial Institutions Act, 2004 must meet additional regulatory requirements.
• Before applying for a VASP license, the entity must first obtain approval from the Central Bank of Seychelles. This ensures proper vetting of applicants and maintains regulatory consistency across the financial sector.

Documents Required to Get a Seychelles VASP License

The list of documents required to get a Seychelles VASP license is given below:

• Identity Proof – Valid passport or identity documents of directors and shareholders.
• Business Plan – A detailed plan outlining company operations, target market, and financial projections.
• AML & CTF Policies – Well-defined policies for Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF), including risk assessment and mitigation strategies.
• Management Details – Information on the management team, including qualifications and experience of directors.
• Financial Statements – Audited financial reports demonstrating the company’s financial stability.
• Physical Office Address – A registered office location in Seychelles.
• Capital Proof – Evidence of sufficient paid-in capital, depending on the type of services offered.
• Insurance Coverage – Proof of business insurance for operational security.
• Application Submission – A completed VASP license application form along with the required fees.

Steps to Obtain Seychelles VASP License

The step-by-step procedure to obtain a Seychelles VASP license is given below:

1. Business Registration

Firstly, the applicant must obtain a Seychelles company registration certificate under the Companies Act of 1972, or an international business company continued or converted under the International Business Companies Act 2016. 

2. Preparation of Documents

Secondly, the applicant needs to prepare and gather all the necessary documents such as Memorandum and Articles of Association and Identification documents for directors and shareholders.

3. Obtain Approval from the Central Bank of Seychelles

The applicant prior to submitting the application must obtain approval from the Central Bank of Seychelles. This is a vital step since it ensures that the entity has fulfilled the regulatory requirements.

4. Submission of an Application to the Financial Services Authority (FSA)

After carefully filling the application form, along with all the necessary documents the application for VASP license must be submitted to the FSA of Seychelles.

5. Compliance Review & Approval Process

After the application is received by the Financial Services Authority (FSA), the FSA will conduct the due diligence and background checks of the applicants and may request additional documents if required.

6. Granting of license

The FSA after review and examination of an application if fully satisfied the VASP license will be granted to an applicant.

7. Post-Licensing Compliance Obligations

Once the VASP license is granted, a corporate bank account needs to open in Seychelles, followed by annual reporting and audits, traction monitoring, AML or CFT compliances.

Challenges in Obtaining a VASP License

Though Seychelles provides a favorable business environment for crypto business, however, there are certain list of challenges to consider before obtaining and maintaining a VASP license are as given below:

1. Changing Regulatory Frameworks
   • Businesses must stay updated on evolving AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations. Failure to comply can result in penalties and legal issues.
2. High Costs and Resource Requirements
   • While the application fees may not be high, maintaining compliance with regulatory requirements involves ongoing expenses, making it a costly but necessary process for smooth crypto operations.
3. Lengthy Approval Process
   • The time required for license approval depends on the business model and structure. Having all necessary documents and compliance measures in place can help avoid unnecessary delays.
4. Banking Limitations
   • Some financial institutions remain hesitant to work with crypto businesses, making it challenging to establish banking relationships.
5. International Regulatory Scrutiny
   • As crypto regulations continue to evolve, businesses may face stricter compliance requirements in different jurisdictions, affecting global operations.

Capital and Solvency Needs for VASP License in Seychelles

Though Seychelles provides a favourable business environment for crypto business, however, there are a certain list of challenges to consider before obtaining and maintaining a VASP license in Seychelles are as given below:

1. Changing Regulatory Frameworks
   • Businesses must stay updated on evolving AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations. Failure to comply can result in penalties and legal issues.
2. High Costs and Resource Requirements
   • While the application fees may not be high, maintaining compliance with regulatory requirements involves ongoing expenses, making it a costly but necessary process for smooth crypto operations.
3. Lengthy Approval Process
   • The time required for license approval depends on the business model and structure. Having all necessary documents and compliance measures in place can help avoid unnecessary delays.
4. Banking Limitations
   • Some financial institutions remain hesitant to work with crypto businesses, making it challenging to establish banking relationships.
5. International Regulatory Scrutiny
   • As crypto regulations continue to evolve, businesses may face stricter compliance requirements in different jurisdictions, affecting global operations.

VASP License Fees in Seychelles

The applicable fees for obtaining a VASP license in Seychelles are outlined in the Second Schedule of the VASP Act. Here is the list of VASP license fees in Seychelles-

• The application fee for a license is SCR 75,000.
• The application fee for registration is SCR 22,500.

Annual License Fees:

• The base annual fee for maintaining the license is SCR 75,000.

Additional annual fees for specific activities are as follows:

• Virtual Asset Wallet Providers – SCR 300,000
• Virtual Asset Exchange – SCR 375,000
• Virtual Asset Broking – SCR 150,000
• Virtual Asset Investment Providers – SCR 75,000

Prohibited Activities under VASP Act 2024

The list of prohibited activities under the VASP Act 2024 is given below:

1. Operating Certain Crypto Services – Running a mining facility, mixer, or tumbler service in or from Seychelles is strictly prohibited.
2. Restricted Use of Specific Terms – Businesses cannot use words like “blockchain,” “cryptocurrency,” “currency,” “DeFi,” “digital wallet,” “hot/cold wallet,” “exchange,” “ICO,” “NFT,” “virtual coin,” or “Web 3” in their registered business or trade name unless they are licensed or registered under the VASP Act.

Regulatory Authority for Seychelles VASP License

The regulatory authority for the Seychelles VASP license is as given below:

• The Seychelles Financial Services Authority (FSA) is the primary licensing authority for Virtual Asset Service Provider (VASP) licenses in Seychelles. The Asset Service Providers Act, 2024, which came into effect on September 1, 2024, empowers the FSA to regulate and issue licenses to entities seeking to operate as virtual asset service providers. The FSA ensures strict compliance with legal obligations to prevent illegal activities such as money laundering and financial terrorism.
• As a regulatory authority, the FSA plays a crucial role in ensuring the smooth functioning of virtual asset service provider businesses in Seychelles. Its responsibilities include reviewing license applications, conducting inspections to verify compliance with regulatory standards, and imposing penalties, including license cancellations. Additionally, the FSA monitors the market and takes strict action against entities falsely claiming to be regulated in Seychelles.
• Under the Seychelles Virtual Asset Service Providers Act, 2024, all entities engaged in virtual asset services, such as wallet provision, exchanges, and brokerage, must obtain a valid VASP license from the FSA to operate legally. This regulation reinforces the Seychelles government’s commitment to a secure and transparent virtual asset ecosystem.

Penalties for Breaches of Virtual Asset Laws and Regulations in Seychelles

The list of penalties for breaches of virtual asset laws and regulations in Seychelles are as given below:

1. According to the Anti-money Laundering (AML) and Countering the Financing of Terrorism Act (CFT) criminal offences may face significant penalties of fines and imprisonment of up to 10 years.
2. Companies who have violated AML or CFT laws may face a penalty of a fine up to USD 400,000 and or imprisonment of up to 5 years.
3. Individuals who are charged for crypto related offences may face the following penalties:
   • Confiscation of crypto assets
   • Fines up to SCR 3 million
   • Imprisonment of up to 20 years
4. If a person commits an offence under Virtual Asset Service Providers Act, 2024 under sections 5 (1), (2), (3), 20 (1), (4), 27(1), (2), (3), (4) or 27(6) is liable on a conviction.
   • Individual to fine not more than SCR2 250,000 or imprisonment not more than 15 years or both.
   • Company to a fine not more than SCR 5,250,000
5. In case of continuing offence, the individual or a company is liable to a further fine of not more than SCR375,000 for every day after the first day that the offence continues after conviction.
6. In case a person commits an offence under sections 7(7), 25(1), 27(8) or 30(11) is liable to conviction.
   • Individual to fine not more than SCR 75,000 or imprisonment not more than 5 years or both.
   • Company to a fine of SCR 1,500,000 or to imprisonment not exceeding 15 years or both.
7. A person who commits an offence under the Virtual Asset Service Providers Act, 2024 of Sections 14(1),(2),(3), 15(1), 04 39(2) is liable for a conviction to a fine of SCR 3,000,000 or to imprisonment not more than 10 years or both.
8. In case the offence or contravention against the Virtual Asset Service Providers Act, 2024 is committed by the virtual asset service provider, director, partner and every senior officer of the virtual asset service provider who knowingly authorized or permitted or acquiesced in the commission in the offence also commit contravention and offence and is liable for a criminal, civil or administrative penalty.

Powers of FSA and Enforcement Action

Some of the list of powers of FSA (Financial Services Authority) and its enforcement actions are as given below:

Share Transactions – The licensee must notify the Financial Services Authority (FSA) if it issues, transfers, or disposes of its shares.

Business Activity Changes – Any change in business activities or modifications to the business plan must be reported to the FSA.

Mergers & Acquisitions – The licensee must inform the FSA in case of a company merger, sale, or acquisition of shares in other companies.

Registered Agent or Business Location Changes – If the licensee is an International Business Company (IBC), it must notify the FSA of any change in the registered agent or business location.

Change of Name or Domain – Any modifications to the business name, other identifying details, or domain name must be reported.

Target Market Adjustments – If there are changes in the target market, the licensee must inform the FSA.

If a VASP license holder fails to comply with the VASP Act, the Financial Services Authority (FSA) may take the following enforcement actions:

Issuing Written Warnings – The FSA may formally warn the licensee about the non-compliance.

Corrective Instructions – The licensee may be instructed to take specific actions to rectify the issue.

Activity Restrictions – The FSA can impose limitations on the licensee’s business operations.

Suspension or Cancellation of License – The VASP license or registration may be suspended or revoked.

Investigations – The FSA may order an official investigation into the licensee’s activities.

Administrative Penalties – Fines or other penalties may be imposed for regulatory breaches.

To Wrap Up

Obtaining a VASP license in Seychelles is a crucial step for businesses looking to operate in the virtual asset sector while ensuring regulatory compliance. With its crypto-friendly regulations, tax benefits, and strong legal framework, Seychelles has positioned itself as an attractive destination for blockchain startups, crypto exchanges, and investment firms.

However, securing and maintaining a VASP license requires strict adherence to AML and CFT regulations, financial requirements, and ongoing compliance obligations. Businesses must be well-prepared to navigate the licensing process, meet capital requirements, and establish a strong operational presence in Seychelles.

By obtaining a VASP license, companies can enhance their credibility, expand into global markets, and build long-term trust with investors and customers. As the regulatory landscape continues to evolve, staying informed and compliant will be key to sustaining success in the dynamic world of digital assets.

To get expert assistance in company registration in Seychelles, visit https://enterslice.com/.

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