The number of countries with a negative attitude towards cryptocurrencies is gradually decreasing. The list of favorable jurisdictions for crypto business development has recently been supplemented by the Pacific island nation of Vanuatu. For a long time, this most popular offshore licensing jurisdiction for self-regulated FX/CFD operations did not approve the work with cryptocurrencies. It came to the point that even if there was even a slight hint of crypto in the documents on the licensee’s website, regardless of the way virtual coins were used, the license was revoked and bonds worth up to $50,000 were confiscated.

 

However, that all changed with the sudden amendment of the Financial Dealers Licensing Act (VASP), which authorizes distribution, secondary trading, custody and the provision of investment advice or other digital-related services. The updated legislation placed Vanuatu in the big leagues alongside other more established jurisdictions in the crypto sector such as Gibraltar, Switzerland, Singapore, Malta and Estonia. The amendment is aimed at expanding opportunities for already licensed companies in Vanuatu, as well as attracting new investors to the country.

 

It is possible to register a crypto license in Vanuatu not directly, but by obtaining other financial permits covering this area of activity. In this case, any entrepreneur, foreign investor will be able to legally engage in non-resident digital business with the possibility of going international. Now cryptocurrency exchanges can open on the territory of this jurisdiction, gaining access to quite specific advantages. In turn, Lawrange Law Firm is ready to provide comprehensive professional assistance in the successful passage of licensing. With the support of experienced lawyers and other specialists, you will have a high chance of obtaining a crypto license in Vanuatu.

 

Benefits of obtaining a crypto license

After the Financial Services Commission (VFSC) began authorizing the storage and use of cryptocurrencies in the country, foreign entrepreneurs began to actively explore this sector of the Vanuatu economy. They have at their disposal a number of promising opportunities with which to conduct successful activities in the territory of this country with a stable and reliable business environment.

 

Vanuatu’s simplified and cost-effective crypto licensing process can launch an entrepreneur into the lucrative global market in as little as three months. With the gradual increase in complexity of the cryptocurrency regulatory process in leading countries such as the US and EU, Vanuatu offers a cost-effective and risk-free alternative for opening a licensed cryptocurrency exchange or broker-dealer.

 

Regulatory framework

The VASP Act establishes a regulatory framework for virtual asset service providers so that crypto companies can operate in a clear and stable legal environment. The clear structuring facilitates the establishment of rules and standards for cryptocurrency-related activities within Vanuatu.

 

Legitimacy and trust

A Vanuatu crypto license helps your cryptocurrency firm gain legitimacy and credibility. It shows potential clients and investors that you operate in a regulated environment and are committed to compliance measures, consumer protection. In addition, in this way, cryptocurrency company owners free themselves from the risk of prosecution by government authorities.

 

Compliance Standards

By purchasing a crypto license in Vanuatu, you are demonstrating your willingness to follow regulatory standards and industry best practices. This will help build trust with clients and counterparties, as they can be assured that your operations are transparent and compliant.

 

Access to skilled labor

Vanuatu has a highly skilled workforce that focuses on technology and innovation. This gives businesses access to a talent pool that can help them develop and implement their cryptocurrency projects.

 

Availability of banking services

A crypto license in Vanuatu gives foreign entrepreneurs better access to banking services. It will be much easier for banks to agree to cooperate with licensed cryptocurrency companies. As a result, it will make it much easier to carry out important transactions such as converting paper money, etc.

 

Investor satisfaction

A licensed crypto company has a much better chance of attracting reliable investors who value control and compliance. A license will serve as proof to them that your business complies with specific requirements and that their investment is somewhat protected.

 

Important: International companies can appoint a representative within Vanuatu – one way of complying with the law. This allows them to continue to do business from afar while maintaining a meaningful presence in the country, while taking advantage of a wide range of opportunities in the world of investment and financial services.

 

International business opportunities

A cryptocurrency license in Vanuatu contributes to the successful development of the global market. This jurisdiction is well known for its hospitable business environment and developed financial services sector. Owning a Vanuatu license will help entrepreneurs expand the activities of their own crypto firm. This looks especially advantageous given the possibility of creating an offshore legal entity and utilizing Vanuatu’s large array of banking services.

 

The importance of a cryptocurrency license

Cryptocurrency payment license in Vanuatu plays an extremely important role for cryptocurrency companies. By ensuring the legality of the activity, this authorization document is a confirmation of the firm’s solvency and its compliance with the current legislation in the cryptocurrency industry.

 

Licensed activity is very important for investors who understand that their interests will be protected in force majeure situations. Having a license allows a company to distinguish itself from unlicensed competitors. In addition, the decision to obtain a crypto license in Vanuatu turns out to be extremely important in terms of opportunities to provide services. Thus, a licensed firm will be able to conduct:

 

  • Legal exchange of virtual money to fiat and vice versa.
  • Exchanging different types of cryptocurrencies with each other.
  • Custody of customer funds.
  • Transfers between cryptocurrency wallets.
  • Selling goods for cryptocurrency.
  • Placing tokens on exchanges.
  • Performing mediation functions.
  • Imitating digital currency, etc.

 

Therefore, registration of a crypto license in Vanuatu will be necessary for companies that plan to engage in crypto exchange, sale or management of crypto finances of third parties. For example, a company planning to issue its own token with economic value or preparing an ICO will also need this authorization document.

 

Features of Vanuatu’s cryptocurrency legislation

Vanuatu has expressed interest in digital assets, including cryptocurrency. The Vanuatu Financial Services Commission is guided by the Virtual Asset Service Providers Act (VASP Act) of 2018, which established criteria for the registration and regulation of cryptocurrency companies. The purpose of this framework was to improve consumer protection and reduce the dangers associated with digital assets and cryptocurrencies.

 

According to the Financial Transactions Licensing Act No. 9 of 2021, digital currencies are intangible assets that can be stored digitally using blockchain technology. In the form of digital assets, in addition to the virtual coins themselves, the right to:

 

  • land;
  • merchandise;
  • debt obligations;
  • equities.

 

The clear legal framework particularly emphasizes the requirements to implement AML/KYC policies aimed at combating financial crime and terrorist financing. A company applying for a crypto license must show the Regulator specific methods and procedures aimed at searching for and preventing criminal activity.

 

Important! The purpose of updating the legislation is to provide a specific definition of digital assets and to include the cryptocurrency business in the country’s economy, given that it is a rapidly growing industry that could play a major role in the global economy in the future.

 

The new law mentions that a digital asset includes a digital representation of value that meets the following characteristics:

 

  • Used as a medium of exchange, unit of account or means of savings, but is not legal tender.
  • Represents assets such as debt or equity in the promoting company.
  • Provides access to a blockchain-based application, service or product.

 

The main function of the new legislation is to empower licensed companies in Vanuatu to promote further sustainable economic growth within the country by attracting foreign investment.

 

Cryptocurrency regulators in Vanuatu

Two government bodies regulate crypto activity in this jurisdiction: the Financial Services Commission (VFSC) and the Financial Information Authority (FIU). Each of them specializes in performing specific tasks by monitoring the activities of crypto companies and establishing certain conditions, norms and requirements.

 

VFS

The Vanuatu Financial Services Commission (VFSC) acts as the main national Regulator for non-banking financial services in the jurisdiction. This body is responsible for issuing four classes of licenses: A, B, C, D. Related to digital assets is the Class D license, which authorizes the provision of “distribution, secondary trading, custody, investment advisory or other services in relation to digital assets”.

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VFS, founded in 1993, performs other functions besides crypto licensing:

 

  • Advises the public on financial matters and conducts training programs for interested entrepreneurs.
  • Monitors the activities of licensed brokers.
  • Monitors compliance with tax obligations by licensees.
  • Performs supervisory activities.

 

FIU

The Vanuatu Financial Intelligence Unit, established in September 2000, is governed by the Anti-Money Laundering and Countering the Financing of Terrorism Act No. 13 of 2014. The unit is located within the State Legal Bureau.

 

FIU is Vanuatu’s national agency responsible for receiving, analyzing, evaluating and disseminating financial information disclosed to competent authorities for the purposes of combating money laundering, terrorist financing and suspected proceeds of crime.

 

Taxation of tax residents

The value added tax is 12.3%, while tax residents do not have to pay income tax as well as tax on:

 

  • luxury;
  • capital gains;
  • dividends;
  • percentages.

 

However, if you register an International Business Company (IBC) that does not operate in Vanuatu, tax payments are waived for up to 20 years. However, an annual contribution of 300 USD to the budget of the country will be required. A legal entity is considered to be a tax resident if its head office is registered in Vanuatu.

 

Important: As a tax haven, Vanuatu offers unique opportunities for individuals and businesses to engage in cryptocurrency-related activities. However, navigating the complex tax laws can be challenging. Therefore, it is recommended to enlist the support of Lawrange professionals who are familiar with the legal and regulatory framework for cryptocurrency regulation in the jurisdiction.

 

In terms of tax reporting, it’s worth noting the need to report any income earned from working with cryptocurrency. It is important to keep track of your tax returns to avoid any legal issues. Failure to comply with tax laws can result in fines, lawsuits, or asset confiscation.

 

The process of obtaining a cryptocurrency license in Vanuatu

The Republic of Vanuatu is ideal for promoting cryptocurrency business. The Class D license issued here covers all cryptocurrency trading related activities, including the establishment of a cryptocurrency exchange suitable for both utility and security tokens. The VFSC should be contacted to apply for a crypto license. The licensing process is considered cost-effective and can be completed in stages in a fairly short period of time – up to 3-4 months.

 

Company registration

It is necessary to decide on the organizational and legal form of the future enterprise – it can be a closed joint-stock company or an international company, which is not subject to taxation. In the structure of the company there should be a secretary and at least one director and shareholder. All information about shareholders, management and owners is confidential. Formation of the company is possible only if the minimum authorized capital will be deposited, the amount of which should not be less than 10,000 USD.

 

Preparation of documentation

Successful licensing depends on the correctness of the documents and completeness of the package. So, several months before you plan to apply to the Regulator, it is worth starting preparations:

 

  • A business plan describing the nature and scope of the crypto company’s operations.
  • Constituent documents, which include, for example, the certificate of incorporation and the memorandum of association.
  • Organizational structure – this document allows you to determine the ownership of the company and the way the legal entity is managed.
  • AML (anti-money laundering measures) and KYC rules and policies to prevent financial crimes.
  • Financial statements that demonstrate the company’s ability to meet its financial obligations.
  • A summary of the qualification level of key employees involved in the management of the legal entity.
  • Copies of passports.
  • A utility bill issued within the last 3 months.
  • Two professional letters of recommendation.

 

Copies of documents must be submitted in English and notarized.

 

Submission of the application and its consideration

Together with the application for a crypto license, a pre-prepared package of documentation must be submitted. It is necessary to pay the state fee (a copy of the payment receipt should also be submitted to the Regulator). The application should briefly describe the economic justification for obtaining a crypto license.

 

From the time of application to the Financial Services Commission, it will take about 3-4 months to review the documents submitted in detail. The company will be analyzed for compliance with Vanuatu legislation and international requirements, etc.

 

Issuance of licenses

If the applicant meets all the requirements, the VFSC issues a cryptocurrency license. The authorization is issued for one year with the possibility of renewal. After receiving it, the owner of the company must fulfill a number of requirements, including:

 

  • Register with the IRS.
  • Keep tax records.
  • Appoint an AML agent who will be responsible for ensuring compliance with the AML policy.
  • Provide customers with timely information on account opening and transaction terms and conditions.
  • Inform the Regulator about suspicious transactions in a timely manner.
  • Engage in training of employees on countering financial crime and terrorist financing.
  • Connect payment systems for settlement and acceptance of bank cards.
  • Open a bank account.

 

Basic requirements and conditions for obtaining a crypto license in Vanuatu

First of all, there are requirements for the structure of the company:

 

  • At least 1 founder who can be a legal entity and have any residency.
  • At least 1 director – only natural person regardless of residence.
  • AML Manager and Alternate AML Officer.

 

The main condition is also the deposit of the authorized capital not less than 10000 dollars and payment of the state duty in the amount of 2000 dollars.

 

Why you should contact Lawrange

Our team of experienced and qualified professionals offers a turnkey cryptocurrency exchange license in Vanuatu. We will also perform all necessary work related to this issue separately, including assistance:

 

  • to incorporate the company;
  • to gather all the necessary documents;
  • submit an application and pay the state duty;
  • correspond with the Regulator, etc.

 

We will ensure that each step is executed flawlessly, providing the client with a positive outcome. This is made possible by:

 

  • high qualification of the employees of Lawrange S.A;
  • individualized approach to each client;
  • having extensive experience in licensing abroad.

 

With us you will not have to worry about anything, but only wait for the issue to be resolved in a short period of time. For a detailed consultation, please contact us in a convenient way.

 

Conclusions

The island nation of Vanuatu has a developed industry, banking sector and an attractive taxation system. But most importantly, this jurisdiction also decided not to stay on the sidelines and legalized cryptocurrency activity. For this reason, more and more foreign entrepreneurs are interested in registering a crypto license in Vanuatu, which will allow the company to thrive, attracting investors and potential customers. However, with cryptocurrency legislation still evolving, there is a high risk of missing any important change regarding crypto business licensing. For this reason, we recommend using the services of Lawrange AG, whose experienced professionals are ready to take care of all the hassles associated with the process of obtaining a license.

 

FAQ

Are there any restrictions on the types of cryptocurrencies that can be traded or stored in Vanuatu?

Currently, there are no such restrictions. This means that it is free to invest in a wide range of digital assets, from well-known coins such as Bitcoin and Efirium to new, promising altcoins.

 

What are the potential risks of dealing with cryptocurrencies in Vanuatu?

A potential problem is the risk of fraud in the crypto space. Despite the government’s efforts to regulate the industry, there are still many illegal cryptocurrency exchanges and platforms operating in Vanuatu, which can pose a risk to investors. Also, the risk hides in the volatile nature of cryptocurrencies. The price of crypto can be highly unpredictable, which makes investing in them risky.

 

What is the validity period of a cryptocurrency license in Vanuatu?

A license to exchange cryptocurrencies in Vanuatu is valid for 12 months, after which it needs to be renewed.

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