Registering a Digital Asset Business in the Bahamas in 2025

1. Why choose the Bahamas?

The Bahamas is internationally recognised for its forward-looking regulatory environment and commitment to innovation in the digital economy. It was one of the first countries globally to introduce a Central Bank Digital Currency (the Sand Dollar), and the DARE Act remains one of the most comprehensive legislative frameworks governing digital asset activities.

Key advantages of the jurisdiction include:

• A dedicated regulatory framework for digital asset businesses
• Progressive updates aligned with FATF guidance and global standards
• A business-friendly environment with no corporate income tax
• A respected financial services sector with experienced professionals
• A regulator committed to innovation through oversight – the Securities Commission of The Bahamas (SCB)

2. The Regulatory Framework: The DARE Act

The Digital Assets and Registered Exchanges Act, 2020, commonly referred to as the DARE Act, establishes the framework for the regulation of digital assets and related activities in the Bahamas. The Act applies to:

• Digital asset exchanges
• Custodians and wallet providers
• Token issuers (including ICOs and STOs)
• Brokers, dealers, and market participants facilitating digital asset transactions

The DARE Act was substantially revised in 2023 and early 2024 to align with evolving international standards. Key enhancements included:

• Stricter prudential requirements for VASP
• Enhanced provisions for client asset protection
• Expanded licensing categories
• Comprehensive fit-and-proper requirements for beneficial owners and senior officers
• AML/CFT measures consistent with FATF recommendations

The Securities Commission of The Bahamas (SCB) is the competent authority overseeing applications and the ongoing supervision of VASPs under this Act.

For more information or to begin your application process, contact the SALVUS Crypto-Assets Licensing team at info@salvusfunds.com to discuss your licensing needs.

3. Categories of Digital Assets Businesses

The DARE Act provides for several categories of registration, depending on the nature of the activities performed. These include:

• Digital Asset Exchange (DAE): Entities that operate platforms for the trading of digital assets.
• Custodial Wallet Provider: Businesses providing safekeeping and storage of digital assets on behalf of clients.
• Staking and Yield Services: Where digital asset businesses offer clients staking or other forms of yield-generating opportunities.
• Broker-Dealer: Firms that act as intermediaries in digital asset transactions.
• Issuer of Digital Assets: Entities seeking to offer digital tokens to the public, including through ICOs or STOs.

Each category requires its own application process and capital requirements, with potential for combination depending on the proposed business model.

4. Key Requirements for Registration

Applicants seeking to register as a digital asset business in the Bahamas must meet the conditions imposed under the DARE Act and subsequent regulations. The key requirements include:

a) Incorporation in the Bahamas

The applicant must be a company incorporated under the Companies Act of the Bahamas.

b) Local Presence

Applicants must maintain a physical presence in the Bahamas, including:

• Registered office
• Resident directors and compliance personnel
• Local AML/CFT reporting infrastructure

c) Fit-and-Proper Assessment

Directors, officers, shareholders, and beneficial owners undergo fitness and propriety assessments. This includes:

• Criminal and regulatory checks
• Verification of financial standing and reputation
• Experience in financial services or digital assets

d) Capital and Prudential Requirements

Minimum capital requirements vary depending on the category of license. In addition, businesses must demonstrate:

• Financial resources to sustain operations
• Adequate risk management policies and internal controls

e) Compliance Policies and Manuals

Applicants must submit detailed documentation including:

• AML/CFT policies and procedures
• Business continuity plans
• Cybersecurity policies
• Client asset protection measures
• Risk disclosures and client onboarding procedures

f) Application Documents

The typical application package includes:

• Business plan and financial projections
• Organisational structure and governance arrangements
• Personal questionnaires and supporting documents for key persons
• Evidence of local premises and staffing

5. Timeline and Regulatory Process

The typical timeline for registering a digital asset business in the Bahamas ranges from 3 to 6 months, depending on the complexity of the business model and the completeness of the application.

Step-by-step process:

1. Pre-application discussions with the Securities Commission
2. Preparation and submission of the full application package
3. Assessment phase, including due diligence and clarifications
4. Grant of registration and issuance of license
5. Post-registration conditions, including operational go-live within a specific timeframe

It is also possible to register under a sandbox regime if the business model involves innovation or novel use of digital assets. This requires additional SCB approval but offers regulatory flexibility during initial operations.

6. How can SALVUS assist

At SALVUS, we provide end-to-end support for the registration of digital asset businesses in the Bahamas. Our services include:

• Guidance on the most suitable licensing structure
• Preparation of application forms, policies, and manuals
• Assistance with business planning and financial forecasting
• Support with incorporation and meeting local substance requirements
• Liaison with the Securities Commission of The Bahamas during the application process
• Ongoing compliance and internal audit support post-registration

Our Licensing team works closely with legal, compliance, and AML specialists to ensure each application is tailored to the regulator’s expectations and the client’s commercial vision.

For more information or to begin your application process, contact the SALVUS Licensing team at info@salvusfunds.com to discuss your licensing needs.

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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.