Are you looking to apply for a Broker’s License (or a VASP style License) Offshore?
Then certainly one option you should be considering is to apply for a Vanuatu Financial License.
Vanuatu is an attractive option in that:
- It offers a range of Licenses tailored to your particular Trading or Investment strategies
- It has low paid up capital requirements (only $US50,00)
- There’s less red tape applied compared with the bigger Offshore jurisdictions (such as Caymans and the BVI)
- It’s a popular location for such Licenses and hence the application process has become quote streamlined; &
- The costs are very reasonable (around half the price of the more established jurisdictions such as BVI & Caymans)
License Options
The Vanuatu Financial Service Commission (VFSC) regulates the FDL and the license can be obtained based on Dealer’s in Securities (Licensing) Act [CAP 70]. Through the amendments of the FDL Act the principal license has been divided into Class A, Class B, Class C and Class D Principal’s License and a Representative License is required for each of the classes.
There are 4 Licenses you could apply for in Vanuatu:
- A Class A License: Debenture stocks; loan stock, bonds; certificates of deposits, proceeds of foreign exchange
- A Class B License: Shares in share capital of a corporation; proceeds of precious metals; proceeds of commodities; a right whether or not conferred by warrant, subscribe for shares or debt securities; or a right under depository receipt
- A Class C License: Future contracts and derivative products but not limited to futures and options; an option to acquire or dispose of any security falling within any other provision of the Act; a right under a contract for the acquisition or disposal of the relevant securities under which the delivery is to be made at a future date and at a price agreed when the contract is made in accordance with the terms of that contract
- A Class D License: Carry on or purport to carry on the business of dealing in digital assets. *A class D principal license may only be issued to the license holders of Class A, B and C Principal’s Licenses, unless the person applying holds a similar type of license (Class D) in another jurisdiction.
Principal License Application Docs etc Required
When applying for a Principal License there are a number of documents you’ll need to submit including:
1. Principal Application Form, fully completed, signed and witnessed by a notary public or commissioner of oaths
2. Personal Questionnaire Form – Personal Questionnaire & Undertaking To Be Completed by Each UBO, Shareholder, Director, Manager or Any Other Key Persons
3. Evidence of experience in the class of license applied for
4. A detailed business plan
5. Three year financial projections
6. A Prospectus
7. AML/CTF Procedure manual
8. Complaints procedure
9. Current PI (Professional Indemnity) Insurance covering the company and its officers
10. Certified copies of passports of all UBOs (Underlying Beneficial Owners) and key persons
11. Certified copies of Police clearance certificates re all UBOs and key persons;
12. Certified copies of proof of addresses of UBOs and key persons;
13. Certified copies of evidence of source of funds
14. Certified copy of a license issued in a foreign jurisdiction to the applicant or UBO
15. Detail of the security platform to be used by the company
16. Risk management procedure
17. Details of a physical office based in Vanuatu for company’s operations (estimated approval time to set up is 3 months)
18. Bond of USD50,000 is to be paid upon license approval, the bond is applicable to the Applicant company not on each class of license applied for.
Representative License – Docs Etc required
1. Representative Application Form, fully completed, signed and witnessed by a notary public or commissioner of oaths
2. Copy of CV
3. Certified copies of qualification
4. Certified copy of a passport
5. Certified copy of evidence of residential address, either a utility bill or phone bill
6. Certified copy of Police clearance certificate
7. Two independent references including contact details of referees
NB: Ensure experience is noted for all 3 categories if applying for all 3 categories
Additional information required from an applicant for a Class D license
Apart from above mentioned applicants for a Class D License must also submit:
- Evidence of minimum Capital of USD$ 500,000
- Risk Management Procedures
- AML/CTF Procedures regarding provision of custody services
- Outsourcing agreement in relation to custody arrangements;
- Details of firm providing custody
- Internal control and compliance procedure manual
- Details of Chief Technology officer
- Details of measures to be put in place with regards to infrastructure, security and safety of digital assets
- Detailed information of arrangement to ensure confidentiality, security and reliability of client(s) information
- Copy of promotional material(s) to be use in connection with the proposed business
- A holder of a Class D license must establish an Escrow Account where investor’s funds are held separately from the company’s funds. The escrow account must be audited annually by an independent auditor and the audit reports must be filed at VFSC, together with the company accounts no later than 90 days after the financial year
A Class D license holder must establish a physical presence in Vanuatu with the following key persons present in Vanuatu:
a). At least one director;
b). A Manager;
c). A Chief Technology officer.
Miscellaneous Requirements
Once the License is received, the license holder needs to commence company operations within three months and if they have not, the VFSC needs to be notified.
Failure to commence operation without notifying the VFSC may lead to revocation of the license.
The VFSC may issue a conditional letter with the license usually giving the Applicant Licensee 60 days to provide the information requested. The Applicant has to ensure that it provides the required information at least 10 days prior to the 60 day due date.
Forms and templates (where applicable) will be provided upon request to assist with the application.
The Client is responsible for providing us with all accurate information, supporting documents and related fees as required by the regulators.
All documents must be translated and certified in English if the original documents are in a different language.
Any clarifications and additional documents requested by the VFSC is the responsibility of the Client and they need to be provided within the time frame stated by the VFSC.
Vanuatu Financial Intelligence Unit (VFIU) Registration
The Vanuatu Financial Intelligence Unit was enacted in September 2000 and is governed by the new Anti-Money Laundering and Counter Terrorism Financing Act No. 13 of 2014.
The Financial Intelligence Unit is Vanuatu’s national agency responsible for the receipt, analysis, assessment and dissemination to competent authorities of disclosures of financial information to counter money laundering, terrorism financing and suspected proceeds of crime. It is a requirement of all financial type companies to be registered with the VFIU.
VFIU Registration – Docs required:
1. FIU – Registration Form For Reporting Entity
2. VFIU – AML/CTF Compliance Officer and Alternative Officer form
3. VFIU – Key persons form
4. VFIU – Compliance Report form
5. Certified passport for Compliance Officer/Alternative Compliance Officer
6. Certified police clearance for Compliance Officer/Alternative Compliance Officer from country of passport and country of residence
7. CV for Compliance Officer/Alternative Compliance Officer
8. Certified academic qualifications for Compliance Officer/Alternative Compliance Officer
9. AML/CTF policy and procedure manual
The process takes around 6-8 weeks. We will provide the forms for completion and execution, this service can be done directly by the compliance officer or we can assist in the lodgement of forms, however the compliance officer will need to communicate with the VFIU registration officer for the completion of the registration.
Vanuatu Competent Authority (VCA) Registration
The Vanuatu Competent Authority oversees tax administration regulation in Vanuatu.
From the year 2020, VCA has requested that all financial institutions register with VCA whereby the Entity will be provided with a Tax Identification Number (TIN).
An FDL company is recognised as a financial institution under the tax administration act however, a self-assessment is to be made by the company’s management as to whether they require registration or not.
Once a company is registered, it is required to notify the VCA that they have a reporting obligation under the Automatic Exchange of Information Regulations Order No.76 of 2017 and Tax Administration Act No.37 of 2018. The process takes around 5-10 working days.
The Company must lodge an annual report (including nil report) no later than 31 July of each year.
Please note there is no income tax charged for companies or individuals in Vanuatu, the above report is disclosure of customer information for automatic exchange of information purposes only.
VCA registration requirements
1. MDES Registrations are due by 31 March each year
2. Tax identification form
3. Certified copy of company incorporation certificate
4. Registration of company via MDES portal online
SET UP COSTS
As indicated there are several components to a Vanuatu Financial License Application including Incorporation of a Vanuatu Operating Company, the Financial Dealer Application itself, VFIU Registration and VCA registration. You’ll also need to account for annual renewal costs ie from year 2 onwards. Costs for each part of the jigsaw are as follows… (all fees are in USD unless otherwise indicated):
Vanuatu Company Incorporation
- Incorporation of Vanuatu Licensee Company: $US1,000
- Corporate Administrator Fee payable in advance (proratad at USD125 per month) from month of incorporation to December): $2,000
Financial Dealer License Application
The Vanuatu Financial Service Commission (VFSC) regulates the FDL and the license can be obtained based on Dealer’s in Securities (Licensing) Act [CAP 70]. Through the amendments of the FDL Act the principal license has been divided into Class A, Class B, Class C and Class D Principal’s License and a representative License is required for each of the classes.
- OCI Fees for the financial licenses application and due diligence fees $7,500
- VFSC Application Fees (Principle License) $1,500
- VFSC Application Fees (Representative License) $1,500
- VFSC Principle License Fees $1,500
- VFSC Representative License Fees $1,500
- Security deposit to be paid to the Commission $50,000
- Assistance in relation with the registration of the company with VFIU $600
VFIU Registration:
Our fees to assist with form review and lodgement with VFIU, copying the compliance officer on application lodged for execution of registration of the company: $1,350
VCA registration:
Our fee to assist with lodgement of VCA registration including Certification fee for commissioner of oaths: $1,650
Annual Renewal
Licensed Companies (all Categories of License ie Class A, Class B, Class C and Class D) are required to renew on an annual basis with the VFSC to remain in good standing.
Requirement/Docs required:
1. Annual renewal fees need to be paid per invoice
2. Current certified documents for Shareholders/Director/Representative/Manager; passport, police clearance, utility bill and driver’s license.
3. Audited financial statement for the company
4. Proof of current professional insurance indemnity cover
5. Quarterly returns on investment due in January, April, July and October
Annual company administration fee (including govt taxes): $6,900
+ Disbursements:
VFSC corporate renewal fee: $300
FDL Class A- principal license: $1,000
FDL Class A- representative license: $1,000
Would you like to know more? Then please Contact Us:
www.offshoreincorporate.com
info@offshorecompaniesinternational.com
ocil@protonmail.com
oci@tutanota.com
oci@safe-mail.net
ociceo@hushmail.com
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
