Crypto License in the BVI

The British Virgin Islands (BVI) attracts entrepreneurs interested in the cryptocurrency business due to its transparent regulation and open approach to digital assets. Since 2022, legislation has been in place here that allows for obtaining a crypto license and operating in a legal framework. Registering a company in the BVI makes it possible to develop and offer cryptocurrency solutions and attract international investors safely. Gofaizen & Sherle will guide you through the licensing process, ensuring a quick and efficient start.

The British Virgin Islands (BVI) is one of the most attractive jurisdictions for cryptocurrency businesses due to its flexible regulation, lack of corporate taxes, and favorable investment climate. Even though cryptocurrency activity here was virtually unregulated until 2020, today the BVI has a clear legal framework for cryptocurrency companies. The regulator is the Financial Services Commission (FSC), which enacted the Virtual Asset Service Providers Act (VASP Act, 2023) in 2023, establishing licensing and operational requirements for crypto businesses.

Under the new legislation, companies engaged in exchanging, storing, or providing services related to virtual assets are required to obtain a VASP license. They must also comply with international anti-money laundering (AML) and countering the financing of terrorism (CFT) standards, as well as customer identification procedures (KYC). The previously introduced “sandbox mode” remains available to innovative cryptocurrency startups, allowing them to test new technologies in a controlled environment.

Although cryptocurrency is not recognized as an official means of payment in the BVI, the jurisdiction actively supports the development of the fintech industry and blockchain technology. Crypto exchanges, digital asset fund management and related services can be legally launched here. However, in order to operate, it is required to comply with FSC requirements and provide a full package of documents confirming the financial stability of the company.

Advantages of British Virgin Islands Crypto License

Tax benefits

Companies operating outside the BVI are exempt from tax on income, capital gains and dividends. This makes the jurisdiction attractive to international businesses.

Low operating costs

Company registration and annual maintenance is cheaper than in other Caribbean offshore jurisdictions such as the Cayman Islands or Bermuda.

Flexibility of corporate governance

BVIs offer a wide range of business structuring options, from joint stock companies to trusts. There are no strict capital requirements or capital controls.

Developed a professional environment

The jurisdiction has a strong community of lawyers, accountants, and corporate services professionals to facilitate business and transactions.

High reputation

The BVI is a recognized financial center, which increases the confidence of investors and partners. Obtaining a license in this jurisdiction strengthens a company’s business reputation.

Confidentiality

Data on business owners is not included in public registers, ensuring the anonymity of shareholders and directors.

Ease of regulation

Local legislation does not impose strict restrictions on ICOs and other cryptocurrency projects, making the BVI a convenient platform for digital businesses.

Political and economic stability

The BVI has a robust legal system based on English common law, which ensures that business interests are protected.

No currency restrictions

Companies can freely move capital and profits without restrictions, increasing financial flexibility.

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Crypto Regulation in BVI

The British Virgin Islands (BVI) is a British Overseas Territory with a legal system based on English common law. All business activities in this jurisdiction are regulated by the British Virgin Islands Financial Services Commission. This body oversees compliance with all legal requirements, licenses companies, and monitors their compliance with regulatory standards.

Legislative framework

As of 2022, the regulation of cryptocurrencies in the BVI is based entirely on the Virtual Asset Service Providers Act, which came into force on February 1, 2023. This Act regulates digital asset companies, including exchanges, wallet providers, and token trading platforms.

The main provisions of the VASP Act include:

mandatory registration of all virtual asset service providers with the FSC;
anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) compliance, including KYC procedures;
financial reporting and internal control requirements for cryptocurrency companies;
the ability to impose sanctions for non-compliance with the legislation.

In addition, cryptocurrency companies are subject to other BVI laws governing business activities, as well as activities related to securities, investments or traditional financial services.

The main laws governing business and cryptocurrency activities in the BVI:

International Business Companies Act (1984) – describes the advantages of incorporating a company in the BVI, such as tax neutrality, corporate flexibility, and simplified incorporation procedures;
Securities and Investment Business Act (SIBA) – regulates investment activities, including the issuance and trading of digital assets if they are classified as securities;
Anti-Money Laundering and Countering the Financing of Terrorism Act 2008 (revised January 2020) – sets out mandatory KYC procedures, transaction monitoring, and suspicious transaction reporting;
Financial Services Commission Act – defines the powers of the FSC, including oversight of financial and cryptocurrency companies;
Financial Services Act (2009) – creates a unified regulatory system for a wide range of financial transactions such as banking, insurance, investment management, and securities trading;
Electronic Transactions Act – provides a legal framework for electronic contracts, digital signatures, and electronic record keeping.

In addition, the FSC has implemented a Regulatory Sandbox under the Financial Services Regulations 2020. It is designed for companies engaged in innovative fintech projects and allows them to test new products in a controlled environment.

Licensing and registration

A Virtual Asset Service Provider License (VASP License) is required to operate cryptocurrencies in the BVI. The licensing process includes:

submitting an application to the FSC with a detailed business plan and company structure;
providing compliance with anti-money laundering and counter-terrorist financing (AML/CFT) requirements;
having risk management, user protection, and internal control procedures in place;
payment of government application and follow-up fees.

The FSC reserves the right to reject an application if the applicant does not meet regulatory requirements or has an insufficiently transparent corporate structure. Once licensed, the company must report regularly to the FSC and comply with all statutory regulations.

Cryptocurrency company registry

In addition to licensing, the FSC maintains a register of cryptocurrency companies. It contains information on registered virtual asset service providers and is available for inspection by stakeholders. This ensures transparency and increases trust in the cryptocurrency sector in the BVI. However, the registry contains limited information about registered companies, which is in line with the BVI’s general policy of protecting business privacy.

Thus, the BVI legislation offers transparent and flexible conditions for entrepreneurs and cryptocurrency companies.

The introduction of the VASP Act created a clear legal framework for dealing with virtual assets, and compliance with AML/CFT regulations has become a key requirement for all participants in the crypto industry. Cryptocurrency companies must also take into account other BVI laws governing investments, financial services, and corporate governance. The FSC regulator strictly monitors compliance and only grants licenses to companies that demonstrate a high level of legal and financial transparency.

Types of VASP license in BVI

Under the VASP Act 2022, cryptocurrency companies are required to obtain a Virtual Asset Service Provider License (VASP License), which confirms their compliance with the regulator’s requirements and international financial control standards.

There are three main types of crypto: BVI licenses:

Custodial Services License – allows you to provide custodial services for cryptocurrencies and other digital assets on behalf of clients. The regulator imposes strict requirements for the protection of client funds, security infrastructure and financial stability of the company.
Virtual Asset Exchange License – required for crypto exchanges and digital asset trading platforms. Companies must demonstrate robust AML/CFT compliance mechanisms, user protection, and a resilient IT infrastructure.
General Virtual Asset Service Provider License – covers a wide range of crypto services not directly related to storage or exchange. Such services may include payment solutions, blockchain infrastructure, development of DeFi platforms, and other innovative projects.

There is also an opportunity for companies working on new crypto and fintech solutions to register in the regulatory sandbox. This is a special FSC program that allows testing an innovative business model for 18 months without obtaining a full-fledged license. At the end of this period, the company can apply for a standard crypto license.

Requirements for a crypto license in the BVI

To obtain a Virtual Asset Service Provider (VASP) license, a company needs to meet several requirements set by the Financial Services Commission (FSC):

Registration of the company in the BVI

The cryptocurrency company must be registered in a jurisdiction in the form of an international business company (IBC) or a limited liability company. The company name must be unique and comply with BVI requirements.

Ownership structure and governance

The company must have at least one shareholder and one director, who can be either an individual or a legal entity. The appointment of a local registered agent to maintain corporate records and ensure legal compliance is also required.

Minimum share capital

There is no fixed threshold for capital, but its size should be appropriate for the company’s intended activities. Custodial services and exchanges may have higher capitalization requirements.

AML/CFT compliance

The company must develop and implement internal AML/CFT policies. The appointment of an FSC-approved Money Laundering Reporting Officer (MLRO) is mandatory.

Description of business model and IT infrastructure

A detailed business plan, ownership structure diagram, software description, audit reports on the technology infrastructure and risk management plans must be submitted to obtain a license.

Regular auditing and reporting

The appointment of an independent auditor approved by the FSC is required. The company must maintain accounting records and provide regular reporting as required by the regulator.

Cybersecurity and data protection policies

The financial regulator BVI has strict requirements for the protection of customer data and digital assets. Companies must demonstrate compliance with cybersecurity standards and provide plans in case of cyberattacks or other threats.

Ensuring business continuity

A cryptocurrency company is required to develop business continuity plans and exit mechanisms (e.g., in the event of bankruptcy). This includes strategies to minimize risks to customers and protect their funds.

The British Virgin Islands is an attractive jurisdiction for crypto businesses due to its flexible regulation, but the process of obtaining a license requires careful preparation and compliance with all established standards.

How to get a Cryptocurrency License in BVI?

The process of obtaining a cryptocurrency license in the British Virgin Islands involves several steps:

Company registration.

Step 1

The first step is to register a legal entity in the British Virgin Islands. The company must have a unique name, a registered business address, and an appointed local representative. It is also required to appoint a director and pass a regulatory compliance check.

Preparing documents for submission to the FSC.

Step 2

Before applying for a license, a detailed business plan must be developed, which includes information on the planned activities, target market, and development strategy.

Additionally, the following documents need to be collected:

AML/KYC policies (anti-money laundering and customer verification);
financial reports;
documents confirming the source of income of the owners;
certificates of criminal records of the management team;
a cybersecurity and client asset protection plan.

Financial and technological preparation.

Step 3

The company must demonstrate that it has sufficient capital to operate and develop a robust technology infrastructure. Required to designate:

an official responsible for AML compliance;
an independent auditor approved by the FSC.

Applying to the Financial Services Commission.

Step 4

After all documents are prepared, the crypto license application is submitted to the FSC, and an application fee is paid. The amount of the registration fee depends on the type of activity:

10,000 USD – for companies involved in storing crypto-assets or managing an exchange;
5,000 USD – for all other crypto services.

Review of the application and obtaining a license.

Step 5

The regulator evaluates the application within 6-12 months, verifying the company’s compliance with legal requirements. In case of a positive decision, a crypto license is issued, which allows you to operate within the legal framework of the British Virgin Islands.

Request more information about the BVI Crypto license

Company Registration in BVI

Registration of a crypto company in the British Virgin Islands takes several steps:

Choosing the name and type of company.

Step 1

To conduct cryptocurrency business in the BVI, the International Business Company (IBC) form is most often used. When choosing a company name, the following requirements should be taken into account:

the name must be unique and not repeat companies already registered in the BVI.
it must be in English.
the words Limited, Incorporated, Corporation, Société Anonyme, Sociedad Anónima or their abbreviations (Ltd, Corp, Inc, S.A.) must be present at the end of the name, depending on the structure of the company.

Document preparation.

Step 2

Before applying, the following set of documents must be prepared:

Memorandum of Association and Articles of Association of the company;
a description of the company’s business model and structure;
a resolution on the appointment of a director;
share certificate and resolution on the issue of shares;
copies of passports of all directors and shareholders;
proof of residence of all directors and shareholders;
an application for the incorporation of the company.

Filing of application and registration.

Step 3

The application for company registration, together with the prepared documents, is submitted to the BVI registration office.

Payment of registration fees.

Step 4

As of January 1, 2018, the state fees for IBC registration are 450 USD. It is also necessary to pay for the services of a registration agent who accompanies the registration process. The cost of such services is 640 USD.

Issuance of the registration certificate.

Step 5

After the documents are verified and the application is approved, the company receives a Certificate of Incorporation, confirming its official establishment.

Opening a corporate bank account

Step 6

A registered company can open an account with one of the local BVI banks or with an international bank that caters to offshore companies.

Once the registration is complete, the company can proceed to obtain a crypto license.

Taxation of cryptocurrency companies in the BVI

The BVI is a tax-neutral jurisdiction, so registered companies do not pay the following taxes:

corporate income tax;
capital gains tax, including income from cryptocurrency trading;
tax on dividends, interest, and royalties;
income tax.

The exception is the payroll tax. If a company hires employees in the BVI, it is obliged to pay payroll tax at a rate of 8%. However, the first 10,000 USD per year is exempt from taxation.

Although there are no business activity taxes, companies are required to make regular payments:

company registration renewal fee (the amount depends on the type of company and capital structure);
cryptocurrency license renewal fee.

Thus, the BVI offers a favorable tax regime for cryptocurrency companies, but requires several administrative obligations.

Obligations for crypto business in the British Virgin Islands

First and foremost, cryptocurrency businesses registered in the BVI and licensed as VASPs must strictly comply with the requirements of the Virtual Asset Service Providers Act 2022, as well as anti-money laundering (AML) and counter-terrorist financing (CFT) regulations. Also key obligations for cryptocurrency businesses licensed in the British Virgin Islands include:

Financial reporting and auditing

Mandatory annual audit – VASP-licensed businesses must engage an approved auditor to review financial activities.
Annual financial report – from 2023, all BVI companies are required to submit this report to their registered agent. It includes a balance sheet and an income statement.
Regular reporting – companies must keep records of all transactions, financial activities and measures taken under the AML/CFT.

Regulatory oversight

Requests from the Financial Services Commission (FSC) – the company must provide customer, risk, asset and financial condition data on request.
Transaction monitoring – cryptocurrency companies must monitor suspicious transactions and immediately report them to the FSC.

Regulatory compliance

Maintain customer records – the company should record information about the geographical location of customers, their risks, and transactions.
Transparency in asset management – all financial and tax data must be up-to-date and open to inspection.
Protection of customer data and assets – VASPs are required to comply with cybersecurity measures and protect users’ personal information.

Thus, cryptocurrency companies in the BVI enjoy tax advantages, but in return must comply with strict financial transparency, reporting and financial crime requirements.

Penalties for breaches of BVI crypto business laws

In this jurisdiction, operating without a VASP license results in immediate closure of the company, a $75,000 fine, and up to 5 years in prison.

For licensed companies, violating the laws can result in license revocation as well as a fine of up to USD 100,000. For serious offenses, the person responsible can be criminally liable with up to 5 years imprisonment.

All sanctions are clearly spelled out in the VASP legislation and are aimed at preventing illegal activity, protecting customers and ensuring transparency of crypto-business in the British Virgin Islands.

FAQ about the BVI VASP license

Is BVI a good jurisdiction to open a crypto company?

The BVI is an attractive jurisdiction for crypto businesses due to its lack of taxes, simplified registration, and privacy. However, companies are required to comply with strict AML/CFT requirements, maintain reporting, and obtain a VASP license

Can foreign investors start a crypto business in the BVI?

Yes, foreign investors can start a crypto business in the BVI by obtaining a VASP license. Local legislation and regulatory requirements must be complied with.

Can I get a crypto license in the BVI online to start a cryptocurrency business?

It is not possible to get a VASP crypto license in the BVI completely online. The application and all required documents must be submitted through a registered agent.