The Financial Services Authority (FSA) of Seychelles has published its long-awaited Guidance Note on Paid-Up Capital Requirements for Virtual Asset Service Providers (VASPs), providing important clarification on how the paid-up capital provisions under the Virtual Asset Service Providers Act, 2024 will be applied in practice.
For businesses considering a Seychelles VASP Licence, the Guidance provides valuable insight into the Authority’s expectations regarding minimum capital, acceptable forms of paid-up capital, ongoing monitoring obligations and regulatory reporting requirements.
More importantly, the Guidance confirms that paid-up capital is not merely a licensing requirement—it is a continuous prudential obligation that must be maintained throughout the life of the licence.
Minimum Paid-Up Capital Requirements for Seychelles VASPs
The FSA has confirmed that the minimum paid-up capital required depends on the type of virtual asset service being provided.
| Virtual Asset Service | Minimum Paid-Up Capital |
| 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 an applicant intends to provide more than one regulated virtual asset service, the applicable capital requirements must be satisfied in accordance with the Virtual Asset Service Providers (Capital and Other Financial Requirements) Regulations.
Seychelles VASP Capital Requirements Increase as the Business Grows
One of the most significant clarifications introduced by the Guidance concerns the ongoing capital obligation.
From the third year of operation, every Seychelles VASP must maintain paid-up capital equal to 2.5% of its annual turnover generated from licensed virtual asset services.
Importantly, only revenue derived from regulated virtual asset activities is included in this calculation. Income generated from other commercial activities is excluded.
The FSA will assess compliance using the VASP’s audited financial statements and may request additional supporting information where necessary.
This demonstrates that capital adequacy in Seychelles is intended to evolve alongside the scale of the business rather than remaining a fixed licensing threshold.
Acceptable Forms of Paid-Up Capital for a Seychelles VASP Licence
The Guidance provides welcome clarification regarding the forms of paid-up capital that the FSA considers acceptable.
The Authority confirms that cash remains the preferred and default form of regulatory capital.
However, the cash must be maintained with:
- a bank licensed under the Seychelles Financial Institutions Act; or
- a financial institution located in a jurisdiction meeting the Authority’s Basel II requirements.
One of the most notable clarifications is that funds maintained through:
- Electronic Money Institutions (EMIs);
- Payment Service Providers (PSPs);
- digital wallets; or
- similar payment arrangements,
will not be accepted as paid-up capital.
This clarification is particularly relevant for fintech and crypto businesses that commonly rely on alternative payment solutions instead of traditional banking relationships.
Can Alternative Capital Be Used for a Seychelles VASP Application?
Yes, but only with the prior assessment and approval of the FSA.
The Guidance explains that alternative forms of capital, including:
- bonds;
- shares;
- debt securities; and
- certain investment fund securities,
may be considered on a case-by-case basis.
However, applicants must demonstrate that the proposed capital is:
- fully paid;
- unencumbered;
- readily available;
- legally enforceable;
- sufficiently liquid; and
- capable of absorbing losses during periods of financial stress.
The Authority makes it clear that it will assess the economic substance of the proposed capital rather than relying solely on its accounting treatment or legal classification.
Ongoing Capital Monitoring and Reporting Requirements
The Guidance introduces clear expectations regarding ongoing capital management.
Every Seychelles VASP should maintain appropriate governance arrangements to monitor its capital position continuously.
Where paid-up capital falls below the required level, or no longer complies with the approved form, the FSA must be notified within 12 hours.
A detailed remediation plan must then be submitted within five working days, explaining:
- the cause of the capital shortfall;
- the corrective measures to be implemented; and
- the expected timeframe for restoring compliance.
Failure to comply with these obligations may result in supervisory or enforcement action by the Authority.
What Does This Mean for Businesses Applying for a Seychelles VASP Licence?
The publication of this Guidance provides much-needed regulatory certainty for businesses preparing to establish a Virtual Asset Service Provider in Seychelles.
Applicants should ensure that:
- their paid-up capital satisfies the applicable regulatory requirements;
- their banking arrangements meet the FSA’s expectations;
- future capital requirements are considered as the business grows;
- any proposed alternative capital instruments are assessed before submission; and
- appropriate governance and monitoring frameworks are implemented from the outset.
Taking these matters into consideration at an early stage can significantly reduce regulatory queries during the licensing process.
How FiveComply Can Assist with a Seychelles VASP Licence
FiveComply is currently assisting applicants seeking to establish Virtual Asset Service Providers in Seychelles.
Our team supports clients throughout the licensing process by assisting with:
- assessing paid-up capital requirements;
- reviewing acceptable capital structures;
- advising on banking solutions and regulatory expectations;
- preparing the VASP licence application and supporting documentation;
- drafting governance, AML/CFT and compliance frameworks; and
- liaising with the Financial Services Authority throughout the application process.
Our objective is to ensure that every application is prepared in line with the FSA’s regulatory expectations from the outset, helping applicants navigate the licensing process efficiently and confidently.
If you are considering establishing a Virtual Asset Service Provider in Seychelles, our team would be pleased to discuss your proposed business model and assist you throughout the licensing process.
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.
