Saint Vincent and the Grenadines (SVG), a nation of volcanic islands in the Eastern Caribbean, is taking proactive steps to establish a robust legal framework for Virtual Asset Service Providers (VASPs). This initiative is being spearheaded by the introduction of a VASP Act, designed to regulate the activities of VASPs operating within SVG’s jurisdiction.

A draft law outlining the proposed VASP regulatory framework was published on May 10, 2022. While the exact enactment date remains undetermined, the authorities anticipate its passage relatively soon. Once enacted, the VASP Act will come into effect, shaping the regulatory landscape for VASPs in SVG. This current absence of a formal VASP Act creates a degree of legal uncertainty for VASPs operating in SVG. However, VASPs are not entirely exempt from regulatory oversight. They are still subject to general anti-money laundering and counter-terrorist financing (AML/CFT) laws, along with broader legislation governing financial activities.

Key advantages:

• Operational Flexibility: In the absence of a VASP Act, VASPs currently enjoy a degree of operational flexibility. This allows them to adapt their business models and practices with greater agility, potentially catering to niche markets or offering innovative services that might be subject to stricter scrutiny under a formal regulatory framework.
• Reduced Regulatory Costs: With no VASP-specific licensing or compliance fees currently in place, VASPs can benefit from lower upfront regulatory costs compared to jurisdictions with a mature VASP regulatory framework.
• Tax Advantages: Saint Vincent and the Grenadines is known for its attractive tax regime, offering potential benefits for VASPs. These can include:
• No Corporate Income Tax: SVG does not levy corporate income tax on profits generated from activities outside the country. This can be a significant advantage for VASPs operating internationally.
• No Capital Gains Tax: There are no capital gains taxes imposed on the sale of assets, including virtual assets.
• No Withholding Taxes: SVG generally does not impose withholding taxes on dividends, interest, or royalties paid to non-residents.

Get in touch with us to learn more about becoming a VASP in Saint Vincent and the Grenadines