As a service provider that helps companies set up and launch crypto businesses, BTSE Enterprise Solutions has worked with clients in countries and jurisdictions from all over the world. And yet the overwhelming majority of them choose to set up shop in offshore jurisdictions like Seychelles and the British Virgin Islands.

Why?

From tax benefits to favorable regulations, a commitment to privacy, and asset protection, a host of incentives can be offered to attract businesses to set up in these jurisdictions. Below, we dig deeper into some of the more popular destinations and why crypto businesses are flocking there.

British Virgin Islands (BVI)

• Crypto License: Virtual Asset Service Provider (VASP) License, Securities Investment Business Act (SIBA) license

Key Requirements:

• Local company incorporation

• AML/CFT compliance programs

• Qualified management team with clean records

• Detailed operational procedures and security protocols

The BVI historically has been a top destination for regulated virtual asset service provider operations, but in recent years has been increasing its requirements, leading to increased compliance costs.

In 2024, the BVI further aligned its rules with FATF standards, introducing tighter AML/CFT guidelines, enhanced due diligence requirements for high-risk transactions, and more penalties for non-compliance. However, these compliance requirements can lend your business added institutional credibility, not to mention easier access to banking services.

Seychelles

• License Type : VASP license; exchanges also need a Securities Dealer License

Key Requirements:

• Local incorporation

• FSA registration as VASP

• Audited financials

• Cybersecurity policies

Seychelles is becoming an increasingly popular jurisdiction for crypto businesses. Its VASP framework has specific requirements for staking, lending, exchange, and crypto payments businesses, as well as a regulatory sandbox for testing new ideas.

With this, Seychelles by far has the clearest compliance requirements and VASP rules, as well as relatively fast approval processes for new businesses.

This is also why 20% of global crypto exchanges are based in Seychelles. That being said, Seychelles entities sometimes face issues with accessing banking services.

St. Kitts & Nevis

• License Type: Digital Assets Financial License; exchanges also need a Securities Dealer License

Key Requirements:

• Physical business presence in the jurisdiction

• AML/CFT manual with cybersecurity protections

• Management team must pass "fit and proper" assessment

St. Kitts & Nevis passed a VASP & Securities act in 2020, but it is widely considered to be less strict than the regulations of the BVI, with lower capital requirements and less disclosure and reporting obligations.

For these reasons, it has become an increasingly popular destination for exchanges, funds, and other digital asset businesses to set up. Its Citizenship by Investment Program, which has been around since 1984, has proved particularly popular in recent years, and a stipulation of no taxes on crypto income or capital gains is also alluring to crypto businesses.

Saint Vincent & Grenadines

• License Type: Virtual Asset Business License

Key Requirements:

• Local LLC with physical office

• $100,000 ECD permanent deposit

• Dual AML compliance officers (MLRO + MLCO)

Saint Vincent has no explicit VASP regulations, though businesses do have to apply for a virtual asset business license. The Virtual Assets Business act was passed in 2022 and required businesses involved in activities such as exchanging virtual assets for fiat currency, transferring virtual assets, and providing financial services related to virtual asset issuances to register with the Financial Services Authority (FSA). That being said, there are little to no restrictions or direct oversight, which has contributed to this jurisdiction having a high-risk perception.

Cook Islands

While the Cook Islands do not have any formal VASP regulations, some crypto businesses have been able to set up general offshore entities there and favor it for this jurisdiction’s dedication to privacy and discretion. The Cook Islands have a reputation for hosting trusts and other entities for offshore holdings.

Summary

All of the above jurisdictions generally require local corporate presence, AML/CFT programs, and financial stability proof, with BVI and Seychelles offering the most structured frameworks. Tax advantages and streamlined incorporation processes make them attractive for crypto businesses, though compliance demands remain rigorous.

If you’re interested in setting up an exchange, wallet business, or payments business, contact us here and we’ll get in touch with you.