Virtual Asset Service Provider (VASP) – FSRA
What are the ADGM and FSRA and what do they do?
The Abu Dhabi Global Market (ADGM) is the financial-free zone of Abu Dhabi and an international financial centre, globally recognised for its pioneering and business-friendly ecosystem. The Financial Services Regulatory Authority (FSRA) is one of ADGM’s three independent authorities, tasked to support and supervise all financial activities. Together, the ADGM and FSRA operate in line with international best practices, promoting Abu Dhabi’s economic and financial growth.
Why establish a Virtual Asset Service Provider in Abu Dhabi?
A Virtual Asset Service Provider in Abu Dhabi benefits from:
- Abu Dhabi’s strategic location with favourable geographic distances and time zone differences between international financial markets.
- Sophisticated skilled workforce.
- Attractive tax benefits include zero corporate income tax, no limits on profits repatriation, no withholding taxes and UAE’s wide range of double tax treaties.
- Connectivity to the Middle East, Africa, Europe and Asia.
- Regulations and rules developed on the grounds of the English Common Law.
- Great political and economic stability.
Regulated Activities
The FSRA is an activities-based regulator which enables entities to apply for a Financial Services Permission (FSP) that covers only the regulated activities intended to conduct. The following table consists of the virtual asset regulated activities that can be offered in and from Abu Dhabi.
| Regulated Activities |
|---|
| • Dealing in Investments as Principal - Buying or selling virtual assets as principal. |
| • Dealing in Investments as Agent - Buying or selling virtual assets as agent. |
| • Arranging Deals in Investments - Making arrangements with a view to another person buying or selling a specified virtual asset. - Making arrangements with a view to another person who participates in the arrangements buying or selling a specified virtual asset. |
| • Advising on Investments or Credit - Advice on the merits of buying or selling a virtual asset. |
| • Providing Custody - Safeguarding virtual assets. - Administering virtual assets for the purposes of safeguarding. |
| • Operating a Multilateral Trading Facility (MTF) - The operation of a Multilateral Trading Facility on which virtual assets are traded. |
| • Managing Assets - Managing on a discretionary basis assets belonging to another person if the assets include any virtual asset. |
Applicants seeking to undertake regulated activities that involve conventional assets in addition to virtual assets must be authorised by the FSRA for both asset types.
Regulatory Capital Requirements
Minimum regulatory capital requirements vary between VASP operating a Multilateral Trading Facility and VASP providing intermediary activities. In both cases, the VASP can provide custody of virtual assets.
| Regulated Activities | Capital Requirements |
|---|---|
| Operating a Multilateral Trading Facility | 12-months of operational expenses |
| Intermediary Activities | 6-months of operational expenses |
Application Fees
The application fees are comprised of the FSRA authorisation fee for acquiring an FSP license and the ADGM registration fee for the establishment of a legal entity. The FSRA authorisation fee varies between operating an MTF or providing intermediary activities, and whether the VASP intends to provide custody of virtual assets. The ADGM registration fee is independent of the regulated activities intended to be offered.
Annual Fees
The annual fees are comprised of the FSRA supervision fee for the extension of the FSP license and the ADGM renewal fee for the operation of the legal entity. As with the application fees, the FSRA supervision fee varies between operating an MTF or providing intermediary activities, and whether the VASP provides custody of virtual assets. The ADGM renewal fee remains independent of the regulated activities to be offered.
Licensing Timeframe
The completion of the entire application process is estimated between 12 to 24 months, from the applicant’s first contact with the FSRA until the initiation of operations. This depends significantly on the complexity of the proposed business model and activities, as well as the applicant’s readiness to fulfil the FSRA requirements.
Obtaining a VASP license with SALVUS
The SALVUS Crypto-Assets Licensing team is comprised of industry-leading professionals engaged with the registration and licensing of varying fintech projects. We employ our project management approach in guiding you through the selection of regulated activities that suit your business model and objectives.
We lead your introduction to the regulator and work in coordination with your team in gathering and completing all the necessary documentation for the submission of a complete and comprehensive application. We further assist you with the fulfilment of all the requirements provided by the FSRA, aiming for a cost-efficient allocation of the available financial resources.
Please contact us at info@salvusfunds.com if you are interested in establishing a VASP in Abu Dhabi or providing virtual asset services in the United Arab Emirates.
