International investors see Singapore as one of the best areas to invest in. It is one of the “East Asian tigers“, ranks second in ease of doing business in the world, has the highest credit rating (S&P AAA), with the lowest corruption rate, the legislative system is constantly improving, adjusting to the needs of new digital business. More than 3,000 companies from the United States, Europe, and Asia have opened offices here.

The authorities see the prospect of developing the crypto sector and attracting capital to the country, so they have amended the legislative framework. Financial market regulator the Monetary Authority (MAS) considers the Payment Services Act of 2020 (PSA) as the basis for controlling the crypto sphere. Under which crypto activities in this jurisdiction are subject to licensing. There are 2 types of licenses: SPI (standard payment institution) and MPI (major payment institution). Among Singapore crypto license requirements: registration of a legal entity, presence in the country, and compliance with AML/CTF regulations.

In Singapore, digital currencies are treated as digital tokens and are also subject to the Securities and Futures Act (SFA).

The MAS authorization for investors gives the prospect of tapping Asian markets, including China and Japan.

Advantages of obtaining a cryptocurrency license in Singapore

  • Asian region. Legal Singapore crypto license for doing business means confirmation of business reputation in the market and opening opportunities for expansion in the nearby region (Southeast Asia).
  • Progressive legislation. Singapore is one of the few countries where legislation has been designed to manage digital currencies with business interests in mind.
  • Financial system. This region has a developed banking system with the use of cryptocurrency payments. Asian financial institutions are included in the world rating of the top 20 most reliable banks.
  • The World Cryptocurrency Center. The authorities are interested in attracting financial and technology companies, and business development in this region, for this purpose the regulatory framework has been changed.
  • Loyal tax system. Low rates, no tax on dividends, no corporate tax if income is received outside the country.

Request more info about the Crypto License in Singapore

Requirements for obtaining a cryptocurrency license in Singapore

Crypto activities in this jurisdiction are only possible after obtaining a license from MAS: Standard Payment Institution (SPI) and Major Payment Institution (MPI).

Regardless of which type of license an applicant opts for, several Singapore MAS crypto license requirements must be met:

  • Presence in Singapore. This means that the company must have an office in this zone.
  • Capital requirements. The amount of initial capital depends on the type of license, for SPI it is S$100,000 and for MPI it is S$250,000. In addition, an MPI applicant must provide MAS with proof of financial security in the form of a deposit or bank guarantee (if the turnover of transactions per month is up to S$6 million – S$100,000, over S$6 million – S$200,000).
  • Implementation of KYC and AML policies. An AML manager with Singapore residency is required in the organizational structure of a cryptocurrency company. The AML manager must have the relevant experience to ensure that all norms are followed, the company’s developed policy on illicit finance.
  • Managing Director. One of the conditions is to have managing directors with proven business reputations, and no criminal record, and one of them must be a resident.
  • Business plan. Companies provide a detailed plan of action for the immediate period.
  • Audit. External and internal audits are conducted for crypto-businesses, so there should be developed procedures for conducting them.
  • Technical support. The corporation confirms to the Regulator that its software is protected from hacking, and malfunctions even before obtaining a license.

Procedure for Obtaining Cryptocurrency License Registration in Singapore

Singapore crypto exchange license can be issued in 6-8 months, but careful work with the collection and preparation of all documents is necessary. MAS authorization requires several steps

  • Stage 1

Selecting the type of license

Singapore has developed 2 types of licenses SPI and MPI, so it is important to determine how much business the company plans to conduct.

  • Stage 2

Preparing company information

MAS, as the Crypto Market Regulator requires strict fulfillment of several conditions before obtaining a permit among which are:

  • A registered legal entity, if the registration was outside of Singapore, then you need to open an office in that zone
  • AML/CFT and KYC procedures developed by international legislation
  • Submission of a detailed description of future business activities
  • All personal information about the managing directors, AML manager, shareholders, and their business credibility is disclosed and confirmed
  • Availability of initial capital depending on the type of license
  • Procedures are in place to handle risks, secure transactions and customer data
  • Stage 3

Applying to MAS

The application is submitted online through the MAS website. If a complete set of documents is submitted and there are no additional requirements from the Regulator, the applicant can receive the license within 3 months. The application fee depends on the type of license.

  • Stage 4

Communication with MAS

An incomplete application package can extend the MAS application review period by up to 1 year, so it is important to respond immediately to the Regulator’s requests.

  • Stage 5

Compliance

Approval from MAS means the start of legal operations, but the Regulator will monitor compliance throughout the company’s operations:

  • Payment Services Act (PSA)
  • Compliance with AML/CFT procedures
  • Audits, financial reporting

Crypto license consultant in Singapore

Сonsultant

Anastasia Angelova

Types of Crypto Licenses in Singapore

The Payment Services Act 2020 (PSA) spells out the requirements for cryptocurrency companies that decide to operate legally in Singapore.

Crypto businesses must apply for one of the Cryptocurrency licenses in Singapore:

  • SPI (Standard License) for those with small transaction volumes up to S$6 million (if two or more payment services), initial capital of S$100,000, and state fee of S$ 1,000. SPIs are allowed to conduct transactions within and outside the country, issue virtual currencies, and offer cryptocurrencies.
  • MPI (Major payment institution) is issued for corporations with large volumes, authorized capital – of 250000S$, and mandatory deposit – of 200 000S$. The state fee is 1500S$.

It is possible to issue 2 licenses at once.

In 2020, the MAS issued Guidelines on Digital Token Offerings. It states that the issuance and offering of digital tokens are subject to the Regulator’s monitoring, provided that they are “capital market products”. An exchange in Singapore is allowed to offer “capital market products.” upon execution of a CMS (capital market services) license.

Setting up a cryptocurrency company in Singapore

Singapore, as a global financial center with a progressive regulatory framework and favorable to innovation, beckons many investors. Registration of a company and startups in this zone will help to bring the crypto business to a new level and open a large market in the Asian region.

  • Stage 1

Choosing the legal form of organization

As a rule, a limited liability company is registered in Singapore. Then, you need to determine the nature of operations and their scope to select the type of license.

  • Stage 2

Prepare complete company information

Among the mandatory documents for company registration are:

  • Articles of Association, Memorandum, agreements, deeds
  • Information about the first persons/directors/shareholders (one of the managers must be a resident), confirmation of reputation and business experience, and contact details are provided.
  • Business plan
  • Proof of local office (contracts, invoices)
  • Stage 3

License from MAS

MAS regulates the financial market and is responsible for issuing all necessary permits. Only after the issuance of a Singapore crypto license by MAS, the business can operate.

  • Stage 4

Accounting

In Singapore, it is mandatory to keep financial records, file a declaration, and get audited.

  • Stage 5

Anti-illegal enrichment procedures

Cryptocurrencies are required to comply with international AML/CFT regulations as well as KYC procedures. An AML manager (resident) must be hired whose function will be to monitor transactions for money laundering.

  • Stage 6

Cybersecurity

The company needs to confirm sufficient technical support to protect customer data from unauthorized hacking.

  • Stage 7

Opening a bank account

Each financial institution may have its requirements, but among the main ones is the provision of:

  • Business plan
  • Registration documents
  • Confirmation of the reputation of the directors, the company, and the legality of operations
  • Financial documents
  • Described AML/CFT procedures

The director/manager is required to visit the bank in person to complete all documents. A deposit may also be required, the amount depends on the bank.

Documents required to obtain a cryptocurrency license in Singapore

Several documents are submitted to MAS for consideration, including:

  • Application to MAS
  • Company registration documents
  • List of all directors and founders, personal details of all managing directors and shareholders with proof of their reputation and criminal records
  • Description of business activities in the financial technology sector, future expenses and revenues
  • Documents confirming the existence of a local office
  • Confirmation of cybersecurity measures and customer data security measures
  • Measures to comply with AML/CFT procedures
  • Documents on payment of initial capital
  • Agreements with partners, banks

MAS may request additional information or a meeting with the managers.

Regulation of Cryptocurrencies in Singapore

The Monetary Authority (MAS) monitors crypto service providers based on the:

  • Payment Services Act 2020 (PSA), which outlines regulations for dealing with payments, and exchanging currencies for fiat or cryptocurrencies. Virtual currencies are labeled as a “digital payment token” (DPT).
  • Digital token offering guidelines, which state that the Regulator controls the issuance and offering of digital tokens if they are “capital market products”.
  • The Securities and Futures Act (SFA) comes into play if crypto assets fall under the wording “securities.”
  • The AML/CFT Act, which is designed to ensure transparency of transactions

MAS stands for investor protection and market stability and therefore requires compliance from participants.

Taxation in Singapore

Taxation in Singapore is handled by the fiscal regulator IRAS.

For cryptocurrency companies, the following rates apply:

  • Corporate tax – 17%
  • No tax on dividends, on capital gains
  • For new companies there are tax exemptions in the first year: 75% on the first $100,000 of profits, 50% on the next $100,000 of profits.
  • If license fees: S$5,000 for SPI, S$10,000 for MPI.

FAQ about Singapore Cryptocurrency License

Do you need a license to trade cryptocurrency in Singapore?

Financial markets are supervised by the Monetary Authority (MAS), and crypto activity in this zone is only possible after obtaining an official license from the Regulator.

How to get a Singapore Cryptocurrency License (MAS)?

The application with the collected application package is submitted through the MAS online portal.

Is the MAS cryptocurrency exchange regulated in Singapore?

Yes, it is regulated and the Securities and Futures Act(SFA) applies.

How much does a cryptocurrency license cost in Singapore?

For SPI (Standard License) the initial capital is S$100,000 and the state fee is S$1000. For MPI (Major payment institution) the authorized capital is about 250000S$, state fee 1500S$.

How long does it take to obtain a cryptocurrency license in Singapore?

Typically, the process takes 3-6 months, but MAS can take up to 8-12 months to review documents.

Is cryptocurrency taxable in Singapore?

Yes, the activities of cryptocurrency companies are subject to a corporate tax of -17%.

What is the new cryptocurrency law in Singapore?

In Singapore, cryptocurrency companies are regulated under the Payment Services Act 2020 (PSA). It formulates norms for working with payments, and currency exchange. Virtual currencies are designated as “digital payment tokens” (DPT).

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