Why it’s Worth Applying for a Cryptocurrency License in Singapore?
When it comes to getting a cryptocurrency license in Singapore, there are significant advantages to doing so. Singapore is not only a tourism and shopping destination, but one of the biggest hubs out there globally when it comes to crypto and blockchain.
Fintech companies can take advantage of many monetary incentives, which also offer a banking system that is extremely open to crypto. Local businesses also enjoy huge support thanks to a digitized economy.
Want to know more about Singapore? This island is located in southeast Asia and is a sovereign city-state. The economy has done well, and Singapore is known for having a sophisticated market economy. It also outperforms many of its neighbors by having an extremely high GDP per capita. It is the seventh best in ranking Gross Domestic Product globally and easily outshines countries near it, such as South Korea and Hong Kong.
The S&P gives it a triple-A credit rating and the Index of Economic Freedom placed Singapore up there on the list as having the second-freest economy among all countries in the world. This busy island has also been touted for being a simple place to do business and has stood as such for the past decade.
If you’re looking for more signs of the prosperity of Singapore, consider that it has a very low unemployment rate. There are plenty of businesses that have set up business here that are thriving and play host to a wide variety of employees.
Business owners also don’t have to worry about politics causing conflict with their business, as Singapore has a very relaxed political atmosphere.
The island has a fantastic infrastructure, with a highly respected airport and a great public transportation setup. Singapore Airlines has also been placed as one of the top airlines flying in Asia today.
Cryptocurrencies and Virtual Currencies
Legal Framework
In 2020, the Payment Services Act came into effect at the start of the year in January. This would introduce the world to using Digital Payment Token Services. These were comprised of dealing with payments using digital payment tokens, selling or buying these tokens for money, or anything dealing with a digital payment token. It did not include making possible taking the tokens as payment for any goods or services.
The Digital Payment Service Tokens help make possible the exchange of tokens. It also holds a digital payment token exchange operation, which allows users to exchange digital payment or cash for a digital payment token, whether buying or selling. These purchases and selling are done regularly but must be done in a centralized way. The individual making the offer to buy or sell and the individual on the other end must be two separate entities. This does not extend to include a facility that is operated by just one person.
The Digital Payment Service Tokens also oversee taking tokens from one account to the other so that the tokens can be arranged to be transmitted. It also oversees transmission of the tokens from one account to a separate account. The services also can induce a person to come into an agreement regarding buying or selling the tokens for money or digital payment. It also guards a digital token and keeps it safe whether or not the person has any control over the DPT.
It also will carry an instruction for a customer for tokens that are with a digital payment token instrument to keep the service provider in control of the digital payment token instrument. Those who want to have the services must go to MAS and get a payment service provider license. There are three classes of license under the PSA. These include a license of money-changing, a payment institution license, and lastly, a major payment institution license.
How to Get Crypto License in Singapore?
To get these payment services for digital tokens, one must get either a standard payment institution license or a major payment institution license.
There are many licensing requirements that must be paid close attention to. Someone that is applying for a license has to be a company or a corporation that was formed either in Singapore or has a branch there while operating overseas. The person applying must have a permanent business or an office that is registered in Singapore.
Likewise, an executive director has to be a citizen or resident of Singapore, or else belong to a type of class of person that is described by the Authority. The company must also have a good reputation. Individuals must be shown to be the proper fit for their role by showing that they have enough experience running a business that is part of the payment or financial services industry. This means that they must be not only educated but professional too.
An applicant for a license must also have the proper compliance arrangements that are needed for the nature and size of their specific business. They must also have a compliance officer put in place that has the ability to see over the daily operations and make sure that the applicant has a compliance function while appointing a Singaporean independent compliance function with staff helping out, otherwise getting their support from either an overseas business or a holding company.
Applicants that want to give financial service online must go through a test to find any risks and determine actions that must be taken. This has to be done before a license is granted. They must also have arrangements of audits that are readily matching the nature of the business. The audit can be done by their own internal auditing functions or through a service provider that comes about through a third party.
Terms
The average period for obtaining approval from the regulator is about 6-8 months. However, it should be taken into account that in order to fit into this term, careful preparation is required, which will take about 4-6 months; otherwise, you can get a refusal or noticeably increase the time for consideration by the regulator.
Share Capital Requirements
You may be wondering what the financial aspects of capital requirements for a license are. In Singaporean dollars, a Standard Payment Institution license will cost $100,000 Singaporean. For a Major Payment institution license, it costs a cool $250,000 Singaporean.
Then there’s the security requirement when it comes to a Major Payment Institution license. These keep security for an applicant because they have a cash deposit or an MAS bank guarantee.
The security requirement is $100,000 Singaporean if over the course of one year the value for all transactions in a month does not go over six million Singaporean for any payment service. For any and all other cases, the security requirement is $200,000 Singaporean.
Crypto License in Singapore Application Fees
There are also application fees that might seem very affordable when compared to these larger numbers. It’s just a mere $1,000 Singaporean to apply for to get a standard payment institution license so that you can come up with a digital payment token service. If you are looking to apply for the grant of a major payment institution license for this same service, the fee is $1,500 Singaporean.
The application to vary a standard payment institution license so that you can add a DPT service is $1,000 Singaporean. Meanwhile, the application to add a DPT service by varying a major payment institution license is $1,500.
Supervisory Fees
Besides the application fees, there are also the supervisory fees. You have to pay a license fee every year. On top of that, licensees have to pay fixed fees annually that go along with the type of license as well as the various services that are being provided. A licensee that is using payment surfaces has to pay the total of all of the license fees that apply for the payment services they are using. A standard payment institution license is going to cost roughly $5,000 Singaporean. Double that up when looking for a major payment institution license regarding a DPT service.
Taxes
Now that these numbers are out there, you may be wondering how much the tax is. Local companies are treated the same as outside companies as they both have their profits taxed at 17%. Companies that are newly formed startups may qualify for being tax exempt, with the stipulations being that the company is in Singapore and a tax resident there, as well as if the share capital of the company is held by up to 20 shareholders when the assessment year happens, and with at least one of the shareholders has at least ten percent of the company’s shares. Lastly, companies that qualify will get a seventy-five percent exemption on their first profit of $100,000 as well as fifty percent exemption on their following $100,000 profit in Singapore.
List of Our Services in Singapore
Preliminary analysis of the business model and consultation;
Company formation services in Singapore;
Assistance in the development of internal policies and procedures;
Full support for obtaining a crypto license in Singapore;
Submission of all documents and applications to the supervisory authorities;
Legal address for the company. If necessary, assistance in finding a separate office and hiring qualified personnel;
Legal and accounting advice.