Globally regarded for robust regulation, the Isle of Man was one of the first jurisdictions in the world to bring in regulation on any businesses carrying out activity on virtual assets. In 2015, they introduced the registration regime titled, the Designated Business Act.
A testament to the jurisdictions credibility and excellent standards, the purpose of the regulation was to ensure compliant AML/CFT measures on the use of virtual assets to maintain the jurisdictions transparent reputation.
The Isle of Man Financial Services Authority has defined convertible virtual currency activity as; issuing, transmitting, transferring, providing safe custody or storage of, administering, managing, lending, buying, selling, exchanging or otherwise trading or intermediating convertible virtual currencies, including cryptocurrencies, virtual assets or similar concepts where the concept is accepted by persons as a means of payment of goods or services, a unit of account, a store of value or a commodity.
In order to set up a fintech business on the Isle of Man, it must register under the Designated Businesses Act (2015) which applies to all businesses and professions carrying out activities that fall under the definition of a “designated business” to register with the Isle of Man Financial Services Authority (FSA). Within the category of designated business activities includes ‘Convertible Virtual Currencies’.
To do this, a business must register a business representative person on the DNFBP Portal and provide the following information; the business details, including the activities and business structure, a risk assessment form including the procedures, business profile and client base, and a specified person questionnaire including details of the specified persons associated with the business. A full user guide on this can be found on the FSA website. Once this is complete, the Authority will decide if the business falls within the “designated business” requirements to be registered under the Act.
An initial registration fee is required and the business will thereafter be required to pay annual fees if the business is overseen by the Authority. Or the designated business is overseen by a professional body, which will require annual fees for their services.
As a leading Corporate Service Provider in the fintech sector on the Isle of Man, we have assisted many clients with bespoke structuring in establishing fintech entities, and have worked on numerous innovative cases across specific areas of the fintech industry, including blockchain, cryptocurrency licensing and ICOs.
We provide our clients a personal service, which involves close support and guidance through applying for the Designated Business Act and every stage thereafter.