Cryptolicense in Saint Lucia: New Opportunities for Investors

To legally conduct virtual asset business activities in or from Saint Lucia, individuals or entities (including corporations, firms, associations, and partnerships) must obtain a license from the Financial Services Regulatory Authority (FSRA).

Businesses already operating before the Virtual Asset Business Act (VABA) came into effect have a 60-day grace period to continue operations while applying for a license within 7 days of the Act's commencement.

The license application must include comprehensive details about the business, such as:

• Registered office and Saint Lucia business address
• Nature and scope of the virtual asset business, including operational history, website, and other jurisdictions
• Identification and contact information of key personnel, affiliates, directors, owners, and shareholders
• Written policies and procedures covering AML/CFT measures, data protection, security, and cybersecurity
• Risk assessment of the products and services offered
• Any additional information requested by the FSRA

Along with the application, the following documents must be submitted:

• Prescribed application fee
• Government-issued identification of key personnel
• Certified copies of the entity's constitutive documents

To ensure a secure and trustworthy virtual asset industry, Saint Lucia has implemented comprehensive regulations for Virtual Asset Service Providers (VASPs). These requirements cover a range of aspects, from financial safeguards to transparency and ongoing compliance. A key focus of the regulatory framework is protecting investors and maintaining financial stability. VASPs are required to implement robust measures to safeguard client funds and ensure operational resilience.

Financial safeguards:

• Maintain escrow assets equivalent to at least 15% of client funds with a registered trust company or custodian.
• Lodge software source code and related materials with an approved escrow agent.
• To ensure accountability and transparency, VASPs are required to regularly report to the regulatory authority and notify them of any changes in their operations.

Reporting and notification:

• Seek FSRA approval for any changes in company structure, business scope, or contact information.
• Submit quarterly reports to the FSRA detailing account numbers, values, and escrowed assets.
• Maintaining accurate and transparent records is essential for regulatory compliance and effective risk management.

Accounting and record-keeping:

• Maintain records and prepare financial statements according to International Financial Reporting Standards (IFRS).
• Keep a copy of accounting records and financial statements at the Saint Lucia business premises.
• Protecting user data and maintaining the security of operations are paramount concerns in the digital asset industry.

Data protection and cybersecurity:

• Implement and maintain policies to comply with the Data Protection Act.
• Ensure data collection, storage, use, and disclosure are legitimate, protected, and confidential.
• Safeguard operations and personal information from cyber threats.
• Building trust and promoting informed decision-making require clear and accessible information.

Transparent communication:

• Provide clear and comprehensive information on websites and publications about virtual asset products, features, costs, and risks.
• Promptly update or issue notices of any changes to the communicated information.
• Regular independent audits are essential for verifying the accuracy of financial information and assessing risk management practices.

Annual audit:

• Appoint an approved auditor to perform an annual audit of financial statements and risk management controls.
• Cooperate with any additional examinations or reporting requested by the FSRA.
• The regulatory authority holds additional powers to ensure the integrity and stability of the virtual asset sector.

Financial statement submission:

• Submit audited financial statements to the FSRA within 4 months of the financial year-end (unless an extension is granted).
• Ensure statements cover a maximum period of 18 months and align with previous audited statements if applicable.
• Preventing illicit activities and maintaining the integrity of the financial system are fundamental objectives of the regulations.

Saint Lucia's corporate tax system distinguishes between resident and non-resident companies. Resident companies are taxed at a flat rate of 30% on their worldwide income. However, recent changes have implemented a territorial system, which exempts certain types of foreign-sourced income from taxation.

Non-resident companies, on the other hand, are only taxed on income generated within Saint Lucia. A withholding tax (WHT) of 25% is applied to gross income, with a reduced rate of 15% for interest income. If a non-resident company establishes a permanent presence in Saint Lucia, profits are taxed at a higher rate of 33.3%.

Regardless of profitability, all companies must file an annual tax return and make quarterly estimated tax payments based on the previous year's chargeable income. It's worth noting that the International Business Companies (IBC) regime has undergone changes, now subjecting all IBCs to a 30% income tax. Additionally, various tax credits and incentives may be available depending on the nature and location of the business activities.

Saint Lucia does not have tax treaties with other countries besides the member states of the Caribbean Community (CARICOM). The CARICOM member states have an agreement to prevent double taxation.