Bahamas Crypto License

The Bahamas offers several advantages for businesses and entrepreneurs seeking a crypto license, making it an attractive destination for establishing a presence in the digital currency market. Some of these advantages include the following:

• Favorable regulatory environment;
• Tax- and business-friendly laws for foreign investors;
• Robust financial infrastructure;
• Political stability;
• Beneficial geographic location;
• International center for banking activities;
• One of the wealthiest countries in the New World;
• Official language is English.

The Bahamas’ licensing requirements for cryptocurrency businesses are designed to ensure that these entities operate in a secure, compliant, and transparent manner. The Securities Commission of The Bahamas (SCB) has founded a comprehensive set of requirements for obtaining cryptocurrency permission, which includes:

Regulatory Compliance
Applicants must demonstrate their commitment to adhering to the applicable regulatory guidelines, including those of anti-money laundering (AML), countering the financing of terrorism (CFT), and know-your-customer (KYC) practices.

Capital Requirements
Depending on the type of license being sought, applicants may be required to maintain a minimum level of paid-up capital to ensure the financial stability of their operations. The specific capital requirement will depend on the nature and scale of the business.

Fit and Proper Test
The SCB conducts a fit and proper test for all key individuals involved in the business, including shareholders, directors, officers, and beneficial owners. This assessment evaluates the suitability of these individuals based on their qualifications, experience, and background.

Corporate Governance
Applicants must establish a sound corporate governance framework, including appointing a board of directors with appropriate skills, experience, and independence.

Compliance Officer
Applicants must appoint a qualified compliance officer responsible for overseeing the company’s adherence to regulatory requirements and implementing effective compliance policies and procedures.

Risk Management
Cryptocurrency businesses must implement comprehensive risk management policies and procedures to identify, assess, and mitigate various operational, financial, and regulatory risks.

Technology Systems and Security
Applicants must demonstrate that they have robust technology systems in place, adequate security measures to protect clients’ digital assets and personal information, and ensure the integrity and reliability of their platform.

Reporting and Record-Keeping
Cryptocurrency businesses must maintain accurate records of their operations, customer information, and financial accounts and submit periodic reports to the SCB as mandated by the regulatory guidelines.

Auditing
Licensed entities must undergo regular external audits by an approved auditor to ensure ongoing compliance with the established financial and operational standards.

Insurance Coverage
Depending on the type of license being sought, applicants may be required to obtain appropriate insurance coverage to protect against potential losses arising from operational risks, such as cyberattacks, fraud, or system failures.

Bahamas crypto license provides rights to carry out activities related to digital assets, such as:

• Transactions completed on digital asset exchanges; When considering a Bahamas crypto license, the license holder would be authorized to execute transactions on behalf of their clients or users on digital asset exchanges. They must abide by the laws and regulations governing digital assets in the Bahamas while implementing adequate security measures to safeguard against any potential hazards.
• VA Wallets; A digital wallet designed to preserve virtual assets, such as cryptocurrencies, is called a VA wallet. Concerning a Bahamas crypto license, the individual holding the license would be granted permission to oversee VA wallets on behalf of their clients or users. Such authorization would provide a safe and secure way for individuals and enterprises to manage and store their digital assets. However, the holder must guarantee the implementation of appropriate security measures to prevent hacking, theft, and other forms of potential risks.
• VA storage; VA storage pertains to the safekeeping of virtual assets, specifically cryptocurrencies, on behalf of clients or users. With a Bahamas crypto license, the individual holding the license would be authorized to offer VA storage services to their clients or users, assuring the protection of their digital assets against possible dangers.
• Other activities are entitled as relevant. The Bahamas government considers any other digital asset-related undertaking essential as part of this process. These activities may include providing digital asset trading services, disseminating digital asset investment advice, facilitating initial coin offerings (ICOs), or any other digital asset-related operation. To fulfill their obligations, the license holder must adhere to the laws and regulations governing digital assets in the Bahamas while ensuring the provision of these services in a secure and compliant manner.

Registering a crypto license company in the Bahamas involves incorporating an International Business Company (IBC) as the legal entity applying for the cryptocurrency license. The IBC is a popular and flexible business structure designed to cater to the needs of international businesses, such as those operating in the digital currency space. The following steps outline the process of registering an IBC in the Bahamas and obtaining a crypto license:

• Choose a Company Name: Select a unique and appropriate name for your IBC, which must comply with the Bahamas’ company naming guidelines and not be identical or deceptively similar to existing companies.
• Prepare Incorporation Documents: Prepare the necessary incorporation documents, such as the memorandum and articles of association. These documents outline the purpose, structure, and governance of your IBC.
• Obtain a Registered Office and Agent: Appoint a local registered agent and establish a registered office location in the Bahamas, as the law requires. The registered agent will be the point of contact for official communications with the government.
• Appoint Directors and Shareholders: Determine the individuals or corporate entities that will serve as the directors and shareholders of your IBC. There are no occupancy requirements for directors or shareholders; a single shareholder can own an IBC.
• Register the IBC: Submit the incorporation documents and the required fees to the Registrar of Companies in the Bahamas. Upon approval, the Registrar will issue a certificate of incorporation, which confirms the legal existence of your IBC.
• Apply for a Cryptocurrency License: With your IBC in place, proceed with obtaining a crypto license in Bahamas, as described in the previous answer.

An IBC in the Bahamas has several rights and benefits, as well as specific obligations, which include:

• Shareholders of an IBC enjoy limited liability protection, which means their assets are protected from the company’s liabilities.
• The Bahamas provides high confidentiality for IBCs, with minimal public disclosure of shareholder and director information.
• IBCs in the Bahamas benefit from a tax-neutral environment, with no corporate income tax, capital gains tax, or withholding tax on dividends, interest, or royalties.
• IBCs can tailor their corporate structure, including issuing various shares with different rights and privileges.
• IBCs in the Bahamas are subject to minimal regular monitoring obligations, with no need to file annual financial statements or tax returns.

IBC must also fulfill certain obligations:

• An IBC must maintain a registered office address and appoint a local registered agent in the Bahamas.
• IBCs must comply with all applicable local laws and regulations, including those of anti-money laundering (AML), countering the financing of terrorism (CFT), and know-your-customer (KYC) practices.
• IBCs must pay an annual government fee to maintain their registration in the Bahamas.
• IBCs must maintain accurate records of their operations, share registers, and director details, although these records do not need to be publicly disclosed.

The primary legislation governing cryptocurrencies and related activities in the Bahamas is the Digital Assets and Registered Exchanges Act 2020 (DARE Act). This comprehensive legal structure provides the foundation for regulating and overseeing digital assets and their associated businesses. It is supplemented by additional Bahamas crypto regulations and guidelines (SCB).

Critical aspects of cryptocurrency laws in the Bahamas include:

• Licensing and Registration;
• Regulatory Compliance;
• Investor Protection;
• Market Integrity;
• Cybersecurity and Technology;
• Supervision and Enforcement.

The jurisdiction maintains a tax-neutral environment characterized by the absence of direct taxation on personal or commercial revenue, capital gains, and inheritance. Critical aspects of taxation in the Bahamas include the lack of corporate income tax on domestic and global corporations, no personal income tax for residents and non-residents, and the absence of capital gains tax, wealth tax, and inheritance tax. However, the Bahamas levy a Value Added Tax (VAT) on the supply of goods and services, customs duties on imported goods, real property tax on land and buildings, and stamp duties on specific operations.

To start a digital token exchange, you must pay an application fee of $5,000.00 and a registration fee of $15,000.00. You will also need to pay an annual renewal fee of $15,000.00 to keep your exchange running yearly.

However, if you are planning to start any other type of digital asset business, you will have to pay a lower application fee of $3,000.00, and there is no registration fee. But, you will still need to pay an annual renewal fee of $10,000.00 to maintain your business in compliance with the laws and regulations.