Set Up a Cryptocurrency Company in Singapore

By Vlad Cuc, specialist in company formation matters

Not long ago, Singapore secured its position among the preferred fintech destinations for foreign investors all over the world thanks to the favorable taxation system and the modern regulatory framework which covers a wide range of activities connected to the financial industry. One of the newest and most sought types of businesses to be set up in the fintech sector is related to the cryptocurrency field in Singapore.

Those who want to open cryptocurrency companies in Singapore are not required to apply for any special licenses as long as they do not carry out any other type of activities related to the financial sector. Our Singapore company formation agents can explain the requirements related to establishing a cryptocurrency company in the city-state.

We also invite you to watch our video on how to open a company in Singapore as a cryptocurrency business:

The cryptocurrency environment in Singapore

The Monetary Authority of Singapore (MAS) is the main regulator of the financial field in the city-state and it also provides for the creation of cryptocurrency businesses. 2017 was an important year for the Singapore cryptocurrency sector as the MAS has begun considering enabling legislation which regulates the issuance and the use of virtual coins. The MAS is also considering creating a legal framework for those interested in setting up cryptocurrency funds for the coin offerings (ICOs).

Foreign investors should also know that Singapore is among the few countries in the world to have a Cryptocurrency and Blockchain Industry Association dedicated to small and medium-sized enterprises (SMEs) operating in this field.

Our company formation experts in Singapore can assist foreign investors who want to start cryptocurrency companies here.

Regulations imposed on cryptocurrency companies in Singapore

An investor who plans to open a company in Singapore in the cryptocurrency sector should know that he or she will be subject to the regulations recently enabled by the Monetary Authority. Among these regulations we mention the following:

• -          the Guide to Digital Token Offerings which was created in 2017 by the MAS;
• -          the Guidelines on the Regulation of Markets which now address to cryptocurrency trading;
• -          the Anti-money Laundering Regulations which is one of the most important laws applicable in this field;
• -          the Futures and Securities Act under which virtual money is treated as a commodity for trading purposes.

You can ask our Singapore company formation specialists about the regulations imposed when setting up a cryptocurrency business. It is important to notice, that cryptocurrency exchanges must now obtain a crypto exchange license with the MAS before starting the trading activities.

Business ideas in the Singapore cryptocurrency field

We mentioned earlier the possibility of establishing cryptocurrency exchanges, however, a business person who wants to open a company in Singapore as a crypto business have various options. Among these, the most popular are:

• -          cryptocurrency ATMs which are machines through which money can be exchanged into virtual money;
• -          cryptocurrency mining businesses are also very popular in Singapore as they benefit from a high degree of flexibility;
• -          one can also set up a casino which accepts payments in cryptocurrencies;
• -          e-wallets have become very popular in Singapore since the crypto exchange license has been introduced;
• -          IT companies which operate in the field of cryptocurrencies can also be set up in Singapore;
• -          one can also offer consulting services related to investing in cryptocurrencies.

While for some of these business ideas there is no need for a license, there are others which are subject to certain licensing criteria. The most important aspect to consider is that all cryptocurrency companies in Singapore must comply with the anti-money laundering regulations.

Company formation requirements for a cryptocurrency business in Singapore

Those who want to open a company in Singapore in the cryptocurrency sector must first register one of the types of structures acknowledged by the Commercial Law. Following that, a special license will be required for financial companies interested in exploring the cryptocurrency field. IT companies can also issue cryptocurrency without applying for any special permits with the MAS.

All types of companies must comply with the anti-money laundering regulations imposed by the MAS in order to protect the clients and investors in the case of cryptocurrency funds.

Licensing requirements for cryptocurrency companies in Singapore

The most common type of cryptocurrency company which requires a license to operate in Singapore is the cryptocurrency exchange. This type of company is usually treated as a trading platform and is required to obtain a crypto exchange license from the MAS. The good news is that Singapore already has a few crypto trading platforms.

The MAS imposes a few conditions for those interested in setting up crypto businesses which intend to trade virtual money on the Singapore market. Among these are:

• -          the company must be registered in Singapore in order to obtain such a license;
• -          the company must prepare a prospectus which must contain information about the token to be traded;
• -          the company must create an offer which does not address more than 50 private investors in a period of a year;
• -          the maximum value of the offer is currently set at 55 million SGD for one year.

The offer will usually take the form of an initial coin offering, shortly known as ICO. Our local advisors can offer more information about the creation and launch of an ICO in Singapore.

The most traded cryptocurrencies in Singapore

Singapore is one of the most open countries in Southeast Asia when it comes to setting up cryptocurrency companies. One of the main reasons is that it allows for various virtual tokens to be trader here. Among these Bitcoin, Litecoin and Ethereum are the most traded ones. However, it is also possible for those operating cryptocurrency businesses here to trade less popular digital tokens such as Ripple, EOS, NEO and Dash.

Why register a cryptocurrency company in Singapore?

Singapore is at the forefront of countries accepting cryptocurrency payments and the legislation in this sense allows for the opening of various types of fintech businesses which deal with the promotion of various types of virtual money. Also, setting up a cryptocurrency in Singapore is cheaper than other known destinations, such as Liechtenstein or Switzerland in Europe.

Starting a Singapore cryptocurrency business also has various tax advantages, among which a corporate tax rate which applies progressively, and which implies a partial exemption from payment for specific amounts of profits. Also, virtual money treated as commodities and sold to non-residents will not be subject to VAT payments in Singapore. When adding that to the fact that cryptocurrency companies can be set up as startups, Singapore becomes a great country for this type of business.

If you want to open a cryptocurrency company in Singapore and need assistance, do not hesitate to contact our specialists in company formation in Singapore. You can rely on us if you want to open any type of company in Singapore.