ANTIGUA AND BARBUDA DIGITAL ASSETS BUSINESS ACT
Introduction
The Digital Assets Business Act, with its accompanying Regulations, is a future-forward, comprehensive, flexible legal and licensing framework regulating blockchain, cryptocurrencies and Digital Token/Assets projects and businesses in A&B.
Fully entered in force in May 2021, it already garnered the interest of many blockchain and digital business startups and already established Groups, with the first licensing approvals expected to be announced towards the end of the year.
One of the very first all-round licensing regimes in this emerging and dynamic field, not only within the context of the West Indies/Caribbean neighbouring Countries, but at the broad International level, this new framework will help promote A&B as one of the jurisdictions of prime choice in distributed ledger technologies projects and services. Digital Antigua and Barbuda, Digital Assets Business
Activity Categories
The DAB offers licensing under three major categories, covering a wide range of different business activities and with specific attention towards flexibility and competitive solutions.
Cat. A:
Payment Services Provider
Digital Assets Services Vendors
Custodial Wallet Services Provider
Digital Assets Custody Services Provider
Special Purpose Depository Services
A broad Category, with businesses and use-cases potentially falling under this category that would likely include, for example: remittance/payment services, Automated Market Makers (AMMs), Decentralized Finance (DeFi) applications, DeFi-to-CeFi bridging solutions and other lending platforms, Crypto RoboAdvisory Services (with or without Custodial elements), Digital Token Escrow Services and Cryptocurrency/DeFi Insurance businesses, Crypto Debit Cards issuance, tokenization and stablecoin deposits backing and custody services.
Cat. B:
Digital Assets Exchanges
This would include Centralized Exchanges (CEX), Permissioned Decentralized Exchanges (DEX) and NFT Marketplaces/trading platforms (both centralized and decentralized) and other similar projects and platforms with swap functions (crypto-crypto, fiat-crypto, crypto-fiat).
Cat. C:
Sandbox Licence
A limited duration, but renewable form of licensing for any innovative project that would not clearly fall within any of the other Categories or that intermixes elements from different Categories with other left-field, out-of-the-box ideas. This Category allows startups and established companies a great opportunity to present their most creative ideas and test them in a controlled, initially limited environment, renewable every 6 months.
Advantages and key elements
- Flexible and comprehensive options with 3 different licensing Categories, covering the vast majority of the currently existing and the foreseeable future crypto/blockchain business models, including Exchanges/Swaps, DeFi and NFTs (collectibles, marketplaces and gamification); complete but light initial and recurring licensing burdens;
- Foreign-owned Antigua International Business Companies enjoy total tax exemption; no taxation on foreign-sourced income that is remitted back to the Country; relatively light accounting and reporting yearly obligations;
- No limits on Shareholder, Beneficial Owner and Director nationalities, as long as the individual profiles meet the Regulatory standards of fitness;
- Reasonable and clear KYC/AML framework for Client Onboarding, reducing the burdens and pressure of other licensed solutions in alternative jurisdictions, with the ability to accept Clients from most Countries and nationalities;
- Local “economic substance” requirements in terms of physical office and employment are generally minimal and with a reasonable cost profile; there are very little taxes on employees’ salaries, contrary to other EU-based crypto licensing solutions;
- Provided all documentation is in order, most projects can expect an outcome to the licensing process within 2-3 months, instead of the 8 to 24 months of other comparable Digital Assets Frameworks elsewhere;
- The DAB Licensing does not impose particular restrictions in terms of target Clients’ Countries of Residence; both local and International Clients can be onboarded by a licensed Digital Assets Business;
- One of the most affordable licensing regime in terms of Regulatory fees (application fees range from about 3700USD to 7400USD) and, in particular, minimum Statutory Deposits. These are calculated based on the applicable licensing Category and the yearly turnover, and range from just about 18500USD to a maximum of just over 110000USD for Exchanges with a turnover higher than about 1.8M USD/year.
- Minimal monthly and yearly reporting, filing and administrative burden, freeing time and resources for the actual development of the business;
- Unlimited transactional volume for every licensing Category;
- Access to high quality, experienced team of legal counsels, sourced locally and Internationally on purpose for assisting projects with the DAB, at pricing generally lower than most alternative Crypto/Blockchain/Digital Assets licensing schemes elsewhere;
- Possibility to have a direct and frank relationship with the Regulator and other officials at the beginning and throughout the whole process, guaranteeing direct and constant attention to each Applicant’s need and query;
F.A.Q.
Q. Do I need to apply for a licence under the DAB for a token issuance?
A. In most cases, as long as the token is not a “security”, no – the DAB licensing Categories are meant for Businesses providing services in relation to digital assets and cryptocurrencies; this, however, will need to be assessed on a case-by-case basis.
Q. How long does it take for the licence application to be processed?
A. It depends, but in most cases we estimate 2 to 3 months.
Q. In which cases a licence can be suspended or cancelled? Can it lapse, or can it be renewed?
A. There is a yearly renewal fee, payable each year depending on Category and turnover of the licensee. The licence might be suspended or cancelled should the licensee repeatedly refuses to comply with any injuction of the Financial Services Regulatory Commission.
Q. What is going to be the relevant taxation on a licensee’s activities?
A. On a general principle, the business activities will be tax-exempt.
Q. Is there any requirement to publish and regulate any “prospectus” in relation to my Digital Assets Business?
A. No, there is currently no “prospectus” requirement.
Q. How long does it take to setup a local business entity suitable for the licence application?
A. Typically several days, as long as the KYC/AML documents are provided in good order.
Q. How to verify if my business model falls within one of the licensable Categories?
A. The Categories are quite flexible and will accomodate most of the existing and feasible crypto/bockchain business models – you can always CONTACT US and we will be happy to help you with a pre-assessment.
Q. Are Foundations, Associations and other NPOs, exempt from acquiring a licence?
A. No, NPOs are not exempt, whether they are also charities or not.
Q. Are there any limits on the type or amount of cryptocurrencies/Digital Tokens that a licensed Digital Exchange under the DAB Cat. B? What about “stablecoins”?
A. There are no quantitative limits; at the qualitative levels, Digital Tokens that qualify as “securities” might require additional licensing or not be allowed, subject to a case-by-case assessment. The vast majority of “stablecoins” does not have any security-like element, and is generally speaking fine, with the exception of ones issued with the East Caribbean Dollar as a backing asset.
Q. Is there any requirement mandating the appointment of an independent VFA Agent like in other jurisdictions?
A. No, there is no such requirement at all, the licensing scheme is relatively simple.
Q. Is it possible to open a Bank Account for my DAB licensed business?
A. There are both local and neighbouring international options for banking of a A&B licensed DAB. Our DAB Team will assist each Client/Applicant and find/propose the most appropriate Banking partner and option for each case.
