Singapore has solidified its position as a premier global financial hub, attracting significant international capital. In response to the evolving digital economy, its regulator, the Monetary Authority of Singapore (MAS), has established a clear regulatory framework for cryptocurrency businesses. This guide provides a comprehensive overview of how to obtain a crypto license in Singapore, detailing the benefits, requirements, and associated costs.
Why Obtain a Crypto License in Singapore?
Securing a license from the MAS offers several strategic advantages for any cryptocurrency business looking to establish a credible and scalable operation.
- Enhanced Prestige: An MAS-licensed entity gains significant credibility, facilitating relationships with major financial institutions, including prestigious local banks. This prestige is crucial for building trust with partners and clients globally.
- Strategic Positioning: Singapore serves as a gateway to the vast Asian market. A local license is an ideal solution for projects aiming to expand their operations and client base across this high-growth region.
- Broad Functional Scope: The licensing regime allows for a wide range of services. Thanks to progressive regulations, licensed companies can seamlessly handle transactions involving both traditional fiat currencies and various digital payment tokens (cryptocurrencies).
- Favorable Tax Regime: Singapore offers a competitive tax environment. Key benefits include no corporate tax on foreign-sourced income and no capital gains tax. Furthermore, the tax rates on domestic profits are relatively low, enhancing overall profitability.
Understanding the License Types and Key Requirements
In Singapore, cryptocurrency exchanges are regulated as Digital Payment Token (DPT) service providers under the Payment Services Act (PSA) 2019. It's important to note that security tokens, which represent traditional securities like stocks or bonds, fall under the Securities and Futures Act and require a different set of licenses.
The PSA outlines two primary license types for DPT services:
- Standard Payment Institution (SPI) License: Designed for smaller-scale operations that do not exceed specific transaction thresholds.
- Major Payment Institution (MPI) License: Required for larger businesses that handle higher volumes of payment transactions.
Regardless of which license you apply for, your company must meet a core set of regulatory requirements to be considered.
Core Eligibility and Operational Criteria
The MAS mandates strict standards to ensure market integrity and consumer protection. Key requirements include:
- Local Economic Presence: The company must maintain a physical office in Singapore. The board of directors must include at least one executive director who is a Singapore resident. Furthermore, you must appoint an Anti-Money Laundering (AML) compliance officer who is also a resident.
- Fit and Proper Personnel: All directors, major shareholders, and key executives must be of good character and possess a sound reputation. Their professional background and financial history will be scrutinized.
- Qualified Team: The company must employ a team with the necessary technical expertise and professional qualifications to manage a compliant financial service operation.
- Comprehensive Documentation: A detailed application package is required. This includes a robust business plan, clearly defined Know Your Customer (KYC) and Anti-Money Laundering (AML) policies, and evidence of implemented compliance measures.
- Audit and Capitalization: The company must commit to undergoing annual internal and external audits. It must also meet the stipulated minimum paid-up capital requirements before commencing operations.
Associated Costs and Processing Timeline
The application process for both SPI and MPI licenses is rigorous and typically takes approximately 12 months to complete. The choice between an SPI and MPI license is determined by the scale of your intended operations, which directly impacts the financial commitments.
The key differences in cost and thresholds are summarized below:
| Criterion | Standard Payment Institution (SPI) | Major Payment Institution (MPI) |
|---|---|---|
| Authorized Capital | 100,000 SGD | 250,000 SGD |
| Security Deposit | Not Required | 200,000 SGD |
| Transaction Limits |
| No limits apply |
| Government Application Fee | 1,000 SGD per payment service | 1,500 SGD per payment service |
For a detailed breakdown of the application process specific to your business model, it is essential to consult with experts. You can explore more strategies and requirements for ensuring a successful application.
Frequently Asked Questions
What is the main law governing crypto licenses in Singapore?
The primary legislation is the Payment Services Act (PSA) 2019. It regulates Digital Payment Token (DPT) services, which include the buying, selling, and trading of cryptocurrencies. Businesses dealing with security tokens must comply with the Securities and Futures Act.
How long does it take to get a cryptocurrency license in Singapore?
The entire process, from preparing the application to receiving a decision from the Monetary Authority of Singapore (MAS), typically takes around 12 months. This timeline can vary based on the complexity of the business model and the completeness of the application.
Can a foreign company apply for a crypto license in Singapore?
Yes, foreign companies can apply. However, they must incorporate a separate legal entity in Singapore (such as a private limited company) and fulfill all local presence requirements, including having a physical office and resident directors.
What is the difference between an MPI and an SPI license?
The key difference lies in the scale of operation. An SPI license is for businesses that expect to stay under specific monthly transaction volume thresholds. An MPI license is for larger enterprises with no transaction limits but requires a higher capital base and a security deposit.
Is Singapore's crypto license recognized internationally?
While licensing is jurisdiction-specific, an MAS license is highly respected globally due to Singapore's strong reputation as a well-regulated financial center. This recognition can significantly ease partnerships with international banks and financial service providers.
What are the biggest challenges in the application process?
The most common challenges involve designing watertight AML/CFT policies, proving the "fit and proper" status of all key personnel, and ensuring the business model is thoroughly documented and compliant with all aspects of the PSA. Many applicants seek professional legal assistance to navigate this complexity. To understand the full scope of compliance, you can view real-time regulatory updates.