As virtual assets become increasingly integrated into the regulated financial system, obtaining a Virtual Asset Service Provider (VASP) licence in Seychelles requires more than simply establishing a company and submitting an application. The Financial Services Authority (FSA) places increasing emphasis on the substance, governance, personnel and internal controls supporting a virtual asset business, reflecting the development of a formal and increasingly robust regulatory framework.
Under this framework, entities providing virtual asset services in or from Seychelles must be appropriately licensed by the FSA. The regulatory regime covers a range of activities, including virtual asset exchanges, wallet providers, brokers and virtual asset investment advisers. Importantly, VASP licences are not available to individuals, the FSA’s licensing guidance confirms that applicants must be companies incorporated or registered under the applicable Seychelles corporate legislation.
Essentially, obtaining a VASP licence is about more than simply asking, “How do I apply for a VASP licence?” The more important question is: “What will the FSA expect to see before approving the application?”.
The answer lies in several interconnected areas, such as the business model, governance, management, financial resources, substance, compliance and the fitness and propriety of the individuals behind the business.
1. The FSA Looks at the Business Behind the Application
A VASP application begins with understanding exactly what the applicant intends to do.
The FSA’s licensing framework requires applicants to clearly identify the virtual asset services they intend to provide and to demonstrate that their proposed activities fall within the regulatory framework. The Authority’s licensing guidelines are intended to assist applicants in understanding the application and licensing requirements under the VASP Act and regulations.
This makes the initial business-model assessment particularly important.
A crypto exchange, custody business, brokerage operation and investment advisory business can have very different regulatory, operational and technological risk profiles. The FSA may therefore expect the applicant’s governance arrangements, capital, systems and controls to reflect the actual nature and complexity of the proposed activities.
A strong application should tell a consistent story:
- the services being offered;
- the people responsible for them;
- the technology supporting them; and
- the controls governing them, should all align.
This is one of the areas where careful preparation can make a significant difference before an application reaches the Authority.
2. Capital Requirements: More Than Just a Minimum
Paid-up capital is a key part of the FSA’s assessment and must be planned from the outset, rather than treated as a final licensing requirement.
The minimum paid-up capital depends on the type of VASP service, specifically:
- Virtual Asset Wallet Provider: USD 75,000
- Virtual Asset Exchange: USD 100,000
- Virtual Asset Broking: USD 50,000
- Virtual Asset Investment Provider: USD 25,000
Where multiple services are offered, the applicable capital requirements must be considered together.
Importantly, paid-up capital is an ongoing regulatory requirement and must be maintained throughout the life of the licence. As the business grows, capital adequacy must also be considered in light of the scale and revenue of the regulated activities.
For applicants, this makes early capital planning, financial projections and regulatory structuring essential to ensuring the proposed business is adequately prepared for both licensing and ongoing compliance.
3. Substance Must Reflect the Business
A Seychelles VASP licence is not intended to be a purely nominal arrangement.
The FSA has issued specific Guidance Note on Substance Requirements as part of the VASP regulatory framework.
Applicants must therefore be prepared to demonstrate that the business has appropriate operational substance in Seychelles, proportionate to the nature, size and complexity of its activities.
This can involve consideration of matters such as:
- the company’s physical presence;
- directors and management;
- local compliance functions;
- staffing arrangements;
- governance and decision-making;
- the location and accessibility of records;
- complaint-handling arrangements; and
- where relevant, the conduct of board and management activities.
The wider question is whether the proposed structure demonstrates genuine operational and governance presence consistent with the business being licensed.
Accordingly, FiveComply assists clients in designing practical substance and governance structures that are aligned with the proposed VASP model and the FSA’s regulatory expectations.
4. Governance and the People Behind the VASP
Nevertheless, one of the most important areas of the FSA’s review concerns the individuals who will be responsible for operating and overseeing the VASP.
The FSA’s Code for Fit and Proper – Virtual Asset Service Providers, effective from 2 September 2024, establishes a framework for assessing the suitability of relevant individuals.
The assessment considers factors, including:
- Probity;
- Honesty and integrity;
- Competence and capability;
- Financial status and other relevant circumstances.
Relevant roles can include directors, principal officers, information security officers and other individuals exercising significant powers or responsibilities within the VASP.
This demonstrates that the FSA is not assessing the corporate structure in isolation, but also whether the individuals responsible for that structure have the appropriate background and capability to perform their functions.
5. Fit and Proper: Experience Must Match the Role
Consequently, the FSA assesses whether each individual has the qualifications, experience and expertise appropriate to their specific position, rather than relying on general financial-services experience alone.
Key considerations include:
- Relevant academic or professional qualifications;
- Appropriate industry or role-specific experience;
- Sufficient time and commitment to perform the role;
- Previous performance and expertise;
- Potential conflicts of interest arising from other responsibilities.
The Fit and Proper Code also sets different requirements for key positions, including Directors, Compliance Officers, Principal Officers and Information Security Officers, reflecting the different responsibilities attached to each role, where it must be illustrated that their experience and capabilities are directly relevant to the functions they will perform.
6. Integrity and Regulatory History Matter
Additionally, the FSA considers an individual’s professional, regulatory and legal history, including disciplinary or criminal matters, regulatory investigations, previous refusals or revoked authorisations, complaints and any misleading information provided to regulators.
The aim is to determine whether the individual demonstrates the integrity, honesty and reliability expected of someone holding a key position within a regulated VASP.
For applicants, transparency is essential. Any potentially adverse matters should be identified and addressed during the application process rather than becoming an unexpected issue during regulatory due diligence.
7. The FSA Also Considers Financial Standing
The financial status forms another part of the fit and proper assessment.
The FSA may consider whether an individual has experienced difficulties meeting financial obligations, been subject to bankruptcy proceedings or remains an undischarged bankrupt, including through equivalent proceedings outside Seychelles.
Financial standing is considered together with competence, integrity and other relevant factors, allowing the Authority to form a broader assessment of an individual’s suitability for a regulated position.
This reinforces the importance of carrying out appropriate due diligence on directors, officers and other relevant individuals before the application is submitted.
8. The FSA May Look Beyond the Application Documents
That said, submitting a complete application does not necessarily mean that the assessment ends there.
Where appropriate, the FSA may require an individual to attend an interview to assist the Authority in determining whether approval should be granted.
Applicants should therefore ensure that proposed directors and key officers understand:
- the business model;
- their specific responsibilities;
- the VASP’s regulatory obligations;
- the governance structure;
- the compliance framework; and
- the risks associated with the proposed activities.
The FSA’s assessment is also conducted on a case-by-case basis, meaning that the relevance and weight of particular considerations may depend on the role and the circumstances of the applicant.
9. What the FSA Is Finding in Practice: Circular No. 14 of 2025
While understanding the FSA’s review criteria is important, Circular No. 14 of 2025 provides further insight into what the Authority is actually encountering during the review of transitional VASP applications. The Circular identifies several recurring deficiencies that applicants should be aware of when assessing the strength and readiness of their own applications.
The key issues identified by the FSA include:
- Generic or placeholder policies: The use of cut-and-paste, AI-generated or group policies that have not been properly adapted to the applicant’s specific business, operations and governance structure.
- Weaknesses in key personnel: Insufficient calibre, knowledge or independence among nominated directors and key personnel, highlighting the importance of appointing individuals with the appropriate expertise and capacity for their roles.
- Insufficient substance: Limited evidence of effective local governance, unclear decision-making authority, or an absence of resident senior management or a clear commitment to establish it.
- Arrangements that are not yet operational: Applicants must demonstrate that their governance, compliance and operational arrangements are already in place and functioning, rather than treating them as future objectives.
These findings reinforce a central point of the VASP licensing process: a strong application is not simply one that contains all the required documents, but one that accurately reflects a functioning, substantive and well-governed business.
10. Compliance Does Not End with Approval
Obtaining a VASP licence is the beginning of the regulatory relationship and not the end of it.
The FSA expects licensees to continuously monitor relevant individuals and ensure they remain fit and proper, including through ongoing training and professional development.
Material key changes affecting relevant individuals must also be communicated to the FSA within the applicable regulatory timeframes, including the 12-hour notification requirement for relevant changes
If an individual no longer meets the required standards, the FSA may take action regarding their fit and proper status.
In turn, fit and proper compliance is an ongoing regulatory responsibility, not simply a requirement for obtaining the licence.
11. Preparing for a Successful FSA Application
In light of the above, a strong VASP application should be approached as an integrated regulatory exercise rather than a collection of documents.
Before submission, applicants should consider whether:
- the proposed business activities have been correctly identified;
- the corporate and ownership structure is appropriate;
- the proposed directors and key officers satisfy the applicable fit and proper requirements;
- qualifications and professional experience can be evidenced;
- capital arrangements meet the applicable requirements;
- the business has appropriate substance in Seychelles;
- AML/CFT and compliance systems reflect the actual business model;
- cybersecurity and technology controls are appropriate;
- governance arrangements are clearly defined; and
- the application and supporting documents are complete, accurate and consistent.
The FSA’s licensing guidance confirms that applicants should read the application guidelines together with the VASP Act and regulations, rather than treating the guidance as a substitute for the underlying legal requirements.
Putting the Right Foundations in Place
For prospective applicants, understanding what the FSA reviews can significantly strengthen the licensing preparation process. Identifying potential issues early, ensuring that proposed personnel meet the relevant requirements and presenting complete, accurate and consistent documentation can help applicants approach the regulatory process with greater clarity and confidence.
Ultimately, obtaining and maintaining a VASP licence is not simply about satisfying requirements at the point of application. It is about establishing the right structure, appointing the right people and creating a regulatory framework capable of supporting the business as it develops.
This is where FiveComply plays a crucial role.
At FiveComply we support clients throughout the VASP licensing journey, from initial business-model assessment and corporate structuring through to application preparation, regulatory engagement and ongoing compliance.
Our support includes:
- VASP business-model and licensing assessment;
- Corporate and governance structuring;
- UBO identification and verification;
- Fit and Proper pre-assessments;
- Review of directors and key personnel;
- Capital and financial planning;
- Source of wealth and source of funds assessments;
- AML/CFT framework development;
- Compliance and governance policies;
- Business plans and financial projections;
- Substance and local presence planning;
- Preparation and review of regulatory application documentation;
- Identification of potential regulatory gaps before submission;
- Liaison with the FSA throughout the licensing process; and
- Ongoing regulatory and compliance support following authorisation.
Significantly, our role does not end once the licence is granted.
As the regulatory obligations continue throughout the life of the VASP, FiveComply provides ongoing support with AML/CFT compliance, regulatory reporting, governance, compliance officer support, internal reviews, policy updates and regulatory correspondence.
For businesses looking to establish a regulated virtual asset operation in Seychelles, the objective is not simply to obtain a licence. It is to build a structure that can withstand regulatory scrutiny, operate effectively and remain compliant as the business grows.
With the right preparation and regulatory strategy, the licensing process can become the foundation for a credible and sustainable VASP operation in Seychelles.
Disclaimer: This article is provided for general informational purposes only and does not constitute legal, regulatory, tax, or professional advice. Readers should seek independent professional advice before acting on any information contained herein.
