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Entrepreneurs who are considering starting a crypto business in Asia and are looking for a suitable jurisdiction usually consider Singapore first on the list. The reason is because this is one of the four Asian tigers! This means that the jurisdiction has a highly developed economy, a high level of technological development and favorable conditions for entrepreneurial activity. The Tigers are focusing on the development of knowledge-intensive industries. In terms of the level of computerization and implementation of robots, Singapore ranks second in Asia after Japan.

Our today's blog post will be of interest to those who intend to register a crypto exchange in Singapore, as it describes the key aspects of the regulation of crypto activity in the country.

Fiat currency transactions

Singapore attracts companies with its relaxed regulation of cryptocurrencies and related activities. This jurisdiction is often chosen because of the ease of starting a business, the speed of filling out financial statements and the technological advancement of the country as a whole.

Singapore-based fiat currency exchange companies must first obtain a license. Businesses that accept money for the purpose of transferring it to individuals outside the jurisdiction must also be licensed. 

If you wish to establish a crypto exchange in Singapore, please note that such companies facilitating offers to buy or sell security tokens may be considered “in an organized market” under the Securities and Futures Act. 

Cryptocurrency derivatives

Lately, the Singapore’s main financial regulator MAS has put forward a proposal to allow local exchanges to list cryptocurrency derivatives, as well as give permission to trade such financial products.

The regulator explained that if the derivatives in question (futures and options) would be referenced as an asset in the Bitcoin or Ethereum contract, then the circulation of such derivatives should be subject to the regulation of local securities laws. Officials note that they developed the proposal in response to a request for regulatory clarity that has been particularly strong among institutional investors, from asset managers to hedge fund managers. This will open access to investments in cryptocurrencies for a large number of international financial players who work on these platforms.

It is curious that MAS considers clear regulation of cryptocurrencies, as well as consensus among regulators regarding the cryptocurrency derivatives trading in Singapore, as necessary conditions just for this purpose, so that derivatives securities for cryptocurrencies are a reliable source of asset value formation links of such contracts.

Taxation when exchanging cryptoassets

Singapore is one of the most frequently used jurisdictions for registering cryptocurrency companies and conducting ICO. Entrepreneurs intending to establish a crypto company in Singapore should be aware that businesses that receive cryptocurrencies as income are subject to normal income tax rules. Singapore companies that mine and trade cryptocurrencies are also required to pay this tax.

Get more information about crypto regulation in Singapore by signing up for a consultation with experts from IQ Decision UK. Experienced specialists are ready to advise you, provide assistance in registering a Singapore crypto exchange or setting up a business related to crypto assets in Asia. Reach out to us by filling out the short form below.