Those who want to start a cryptocurrency business in the Philippines need to comply with certain requirements imposed by the Securities Exchange Commission (SEC). One of these rules also refers to obtaining the equivalent of a crypto license in the Philippines.
Investors who want to explore the fintech industry in the Philippines can open several types of businesses. Among them, the cryptocurrency sector is one of the most developed.
Below our company formation agents in the Philippines explain the procedure related to opening a cryptocurrency business in the country and the requirements for a possible VASP license in the Philippines.
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How to register a cryptocurrency company in the Philippines
At the moment, there are no laws providing the creation and use of virtual money in the Philippines, however, the SEC released a draft containing rules for financial consumer protection that will also cover all services, including digital financial products. This also means that they will refer to activities related to companies operating in the cryptocurrency sector.
Those who want to open this type of business need to keep in mind the following aspects:
- they are required to follow the same company registration process just like for any other business activity;
- they are allowed to create or mine digital money, including to launch initial coin offerings (ICOs);
- they can set up financial companies through which they can promote cryptocurrency, provided that they have obtained a financial license with the SEC;
- they can set up IT companies through which they can create new cryptocurrencies.
Our Philippines company formation advisors can help foreign investors who want to register a business in the cryptocurrency field.
Crypto company regulation in the Philippines
The Securities Exchange Commission has issued several circulars on the use of crypto exchanges throughout the years.
In its most recent release in January 2023, the SEC issued draft rules for public review that also include a reference to the use of financial products and services related to digital products.
Investors who are interested in company registration in the Philippines in this sector can read a short summary of this draft proposal below:
- under the new law, the SEC would have increased authority to oversee the digital services sector; it was not mentioned of a crypto license in the Philippines would also be needed in the near future;
- it would also allow the SEC to restrict practices focused on excessive fees or charges;
- the definition of securities was expanded to include tokenized securities products;
- the draft law described a broader range of digital financial products that also include distributed ledger technology and blockchain; our lawyers in the Philippines can give you more details.
In addition to the rules and regulations currently enforced by the Securities and Exchange Commission concerning financial service providers, crypto companies are also subject to the supervision of the Philippines Central Bank.
While there is no crypto license in the Philippines issued by the Central Bank, it did issue a Circular containing guidelines for Virtual Asset Service Providers. The document, released in 2021, refers to:
- the need for a VASP company to obtain a certificate of authority;
- register with the bank through the appropriate department;
- observe the minimum capital requirements (see below);
- pay the annual service fee;
- ensure the security of the services (most notably for crypto wallets).
The relevant fees and minimum capital requirements included in the Circular are:
- P50 million for a VASP involved in services related to the safekeeping and administration of digital currencies;
- P10 million for a VASP that does not provide administration and safekeeping solutions;
- P1,000 processing fee.
Please keep in mind that these fees and monetary requirements may be subject to change. We advise investors to reach out to our team specializing in company formation in Philippines for updated information. We can also help investors open a branch in the Philippines.
Common questions related to starting a Philippines cryptocurrency business
The company registration process for this type of company is not hard and the investor must follow the same steps as for any other type of company.
The law does not provide for a specific capital for cryptocurrency activities, but for the type of legal form used to register the company. Our local consultants can offer more information on this aspect.
The registration process for a cryptocurrency company is the same as for any other company and can take up to a few weeks.
Local investors usually open virtual cryptocurrency exchanges, cryptocurrency mining businesses and ICOs. For assistance in setting up a cryptocurrency company here, please contact our company registration representatives in the Philippines.
If you are interested in other information, such as the process and the conditions to move to the Philippines, our team can answer your questions. Discussing the criteria for foreigners who wish to enter the country is important beforehand, as the Philippines imposes a set of clearly defined conditions that have to do with the nationality of the applicant interested in the long-term stay.
Local investors usually open virtual cryptocurrency exchanges, cryptocurrency mining businesses and ICOs. For assistance in setting up a cryptocurrency company here, please contact our company registration representatives in the Philippines.