Cryptocurrency Exchange Licenses

Regulatory framework

Mauritius is one the very few states in Africa to officially support and promote cryptocurrency business on its territory.

The Virtual Asset and Initial Token Offering Services (VAITOS) Act 2021 was enacted on the 7 th of February 2022. This is part of the government’s efforts to facilitate the implementation and process of new technologies in Mauritius and to give investors, businesses and consumers the opportunity to leverage technological advancements in a safe and regulated environment. This Act is going to cover and regulate the use and distribution of Virtual Assets (VAs) and Initial Token Offerings (“ITOs

Types of licenses available

FinSpace provides comprehensive license application services for any of the 5 types of crypto licenses available under the VAITOS Act:

Class M (Virtual Asset Broker-Dealer) licences. These enable the operation of activities such as exchanges between Virtual Assets and fiat currencies or exchanges between one or more forms of Virtual Assets.
Class O relates to Virtual Asset Wallet Services. These are licences related to the transfer of Virtual Assets.
Class R which is linked to Virtual Asset Custodian. Holders of this type of licence are responsible for safekeeping of virtual assets or instruments enabling control over virtual assets.
Class I is a Virtual Asset Advisory Services licence is required for the participation in and provision of financial services related to an issuer’s offer and/or sale of Virtual Assets.
Class S which is applicable to virtual asset exchanges. This is a centralised or decentralised virtual platform, in or out of Mauritius, that facilitates the exchange of Virtual Assets for fiat currency or other Virtual Assets for third parties in exchange of a fee, a commission or some other form of benefit. Holders of this type of licence can hold custody or control Virtual Asserts on behalf of their clients to facilitate exchanges. They can also purchase Virtual Assets from a seller when transactions, bids or offers are matched and sell them to a buyer.

How to apply for a VASP licence?

An application for a VASP licence must be made to the Financial Services Commission, clearly specifying the relevant class or sub-category of licence applied for.
To obtain a VASP licence, the applicant must fulfil the following criteria:

It must be a duly registered company conducting business activities in or from Mauritius.
The company must be directed and managed from Mauritius.
The company must a physical office in Mauritius.
It must ensure that each one of its controllers, beneficial owners, associates and officers are in compliance with the ‘fit and proper’ criteria of the FSC.

To determine whether an applicant is directed and managed from Mauritius, the FSC will take into consideration several factors. Some of them might be:

The location of strategy, risk management and operational decision making.
The location of executives responsible for the above-mentioned decision making.
The location the management team meets to discuss about and introduce policy decisions.
The location of board meetings.
The place of residence of officers, employees or directors.

Continuing obligations of VASPs?

The requirements, with regards to the licences, mentioned in the Act can be compared to the licensing requirements applicable to FX brokers and investment dealers under the Financial Services Act.

Only those firms that have been registered in Mauritius, can apply for such a permit as a VASP license in Mauritius. Cryptocurrency service providers are required to have a physical office in Mauritius.

The category of providers dealing with virtual assets and possibility to get cryptolicense in Mauritius may apply to those companies that have the official right to carry out the following activities.

1. Virtual asset exchanges for fiat, its transfers, management and storage.

2. Exchange of different virtual assets among themselves.

3. Storage of tools for company to implement VA controlling – virtual assets.

4. Management of tools for company to implement VA controlling.

5. Take part in transactions for sales of virtual assets – professional advice.

Monitoring of activities under crypto license in Mauritius

Crypto businesses in Mauritius are required to run business within Mauritius territory. To revise whether an activity is run and controlled from jurisdiction’s territory, the following points will be taken into account:

place for making decisions regarding operating strategy and risks mechanisms;
location of executives who are involved in making significant organizational decisions;
place of meeting of directors of the company;
the location of the meetings of the company’s executives, which are initiated for making political decisions;
location and address of residence of employees and persons holding management positions. This clause also applies to directors.

How to apply for a VASP licence?

An application for a VASP licence must be made to the FSC, clearly specifying the relevant class or sub-category of licence applied for.

To obtain a VASP licence, the applicant must fulfil the following criteria:

It must be a duly registered company conducting business activities in or from Mauritius.
The company must be directed and managed from Mauritius
The company must a physical office in Mauritius
It must ensure that each one of its controllers, beneficial owners, associates and officers are in compliance with the ‘fit and proper’ criteria of the FSC.

Timeframes

Normally, it takes up to 10-12 months to obtain a VASP license in Mauritius. However, by taking advantage of our extensive connections in Mauritius and our expertise we can expedite the process and ensure that you get your license within 3-4 months after the date of application.

How FinSpace can assist

FinSpace offers the necessary expertise in setting up companies in Mauritius and assisting with VASP applications. We provide full support during the application process to ensure that your business is properly set up and licensed in Mauritius.

Aside from taking care of your license application package, we shall:

Open bank and payment processing accounts
Procure local non-executive directors at a competitive price
Provide you with local MLRO and compliance officer, as required by law (at an extra fee)
Offer you several options for local office rent
Introduce you to a friendly and discreet local firm of accountants

We provide administration and management of these licences to ensure that they maintain full compliance with all corporate and licensing requirements and to ensure that their affairs are properly managed and controlled from their place of incorporation.