El Salvador
A Crypto Pioneer
El Salvador made history as the first nation to adopt Bitcoin as legal tender in 2021. This groundbreaking decision spurred innovation, attracting global attention and investment. Recent developments, like the Digital Asset Issuance Law (DAI Law), further solidify El Salvador’s position as a welcoming environment for crypto-related businesses.
- Your External Compliance Team: We’ll navigate El Salvador’s crypto regulations, crafting a strong licence application (BSP or DASP), and manage the submission for a seamless experience.
- Comprehensive Support: We offer a one-stop service for El Salvador licensing, including legal consultation, document review, AML/KYC policy development, external audit arrangements, and more. We streamline the process to save you time and effort.
Ready to launch your El Salvador crypto venture? Let’s partner up! Contact us today.
- Pioneering in the crypto landscape: Being a pioneer in Latin America to establish a regulatory framework for cryptocurrencies, El Salvador offers you the chance to position yourself as early adopters in a potentially growing market.
- Regulator Clarity and Compliance: In El Salvador, you can operate within a regulated framework that provides clear guidance on how to navigate the cryptocurrency landscape.
- Tax exemption: El Salvador offers significant tax benefits for crypto-related activities, including exemptions from taxes such as capital gains tax, corporate income tax, value added tax rates etc.
- Access to banking services: Given Bitcoin’s status as legal tender, crypto companies may find it easier to access banking in El Salvador, a rare advantage globally.
- Budget-friendly: USD 2000 min share capital. Get started with surprisingly affordable licensing fees and minimum share capital requirements.
- Build Credibility: Operate as a regulated entity to gain trust, attract customers, and secure the interest of investors.
- Enhance Business Value: Your El Salvador crypto licence can increase your business value and potentially open doors to regional opportunities in Central and South America.
El Salvador has a two-tiered regulatory framework for cryptocurrencies:
- Bitcoin Service Provider (BSP) Licence: focuses on businesses offering Bitcoin-specific services. The Central Reserve Bank (BCR), under the Bitcoin Law, oversees BSP licensing.
- Digital Asset Service Provider (DASP) Licence: covers services related to cryptocurrencies other than Bitcoin. The National Digital Assets Commission (CNAD), established under the DAI Law, handles DASP licensing.
1. Under the BSP Licence
- Bitcoin-related services:
With a BSP licence, you can offer a range of Bitcoin services. This includes converting Bitcoins into fiat currency, processing Bitcoin payments, and securely holding Bitcoins on behalf of your clients.
2. Under the DASP licence
- Digital asset services:
You can provide a variety of digital asset services, including cryptocurrency exchange, the sale of digital assets and derivatives, custody solutions, and managing operations on behalf of third parties.
- Stablecoin issuance:
With the Regulation of Digital Assets Service Providers, you can develop and issue stablecoins tied to stable assets like the US dollar. It’s a way to provide your users with a more stable option in the crypto world.
- Cryptocurrency trading:
You can engage in cryptocurrency trading activities, such as buying, selling, and exchanging cryptocurrencies, all regulated by the DASP licence.
- Cryptocurrency custody:
You can provide cryptocurrency custody services, securely holding cryptocurrencies for your clients.
- Cryptocurrency payment systems:
Create and manage cryptocurrency payment systems that facilitate transactions using cryptocurrencies. Under the DASP licence, you can help bridge the gap between crypto and everyday transactions.
- Cryptocurrency wallet services:
You can offer cryptocurrency wallet services, enabling users to securely store, send, and receive cryptocurrencies.
- Cryptocurrency exchange services:
You can run cryptocurrency exchanges, enabling the buying and selling of cryptocurrencies.
- Cryptocurrency lending and borrowing:
If you are interested in cryptocurrency lending and borrowing, the DASP licence allows you to engage in these activities.
- Cryptocurrency investment products:
With the DASP licence, you can create and offer a range of cryptocurrency investment products, including funds and ETFs.
Note: A total 107 licences issued.
| Core Activites | Ancillary Activities | ||||||
|---|---|---|---|---|---|---|---|
| Company (Real Cases) | Digital Wallet | Custody Services | Digital Exchange | Payment Processing | Mining | Token Issuance | P2P |
| Binance Services El Salvador, SA de CV | ✔ | ✔ | ✔ | ✔ | ✔ | ✖ | ✔ |
| 503 Escrow, SA de CV | ✔ | ✔ | ✔ | ✖ | ✖ | ✖ | ✖ |
| Sivar Cash, SA de CV | ✔ | ✔ | ✔ | ✖ | ✖ | ✖ | ✖ |
| Armadillo Trade, SA de CV | ✖ | ✔ | ✔ | ✖ | ✖ | ✔ | ✖ |
| Quickipay, SA de CV | ✔ | ✔ | ✔ | ✖ | ✖ | ✔ | ✖ |
| Bitcoin Mining SA de CV | ✖ | ✖ | ✔ | ✖ | ✔ | ✖ | ✖ |
Note: A total 14 licences issued.
| Aquiles | Alphapoint Global | Binance Services | Globiance Pay | Koipay | |
|---|---|---|---|---|---|
| Exchange digital assets for fiat or other digital assets | ✔ | ✔ | ✔ | ✔ | ✔ |
| Operate digital asset trading platform | ✔ | ✔ | ✔ | ✔ | ✔ |
| Risk/price evaluations & subscription of digital assets | ✔ | ✖ | ✔ | ✖ | ✔ |
| Place digital assets on wallets/platforms | ✔ | ✔ | ✔ | ✔ | ✔ |
| Manage digital asset investment products | ✔ | ✔ | ✔ | ✔ | ✔ |
| Transfer digital assets between parties | ✔ | ✔ | ✔ | ✔ | ✔ |
| Safeguard/custody of digital assets | ✔ | ✔ | ✔ | ✔ | ✔ |
| Receive/transmit digital asset buy/sell orders | ✔ | ✔ | ✔ | ✔ | ✔ |
| Execute derivative digital asset orders | ✖ | ✔ | ✔ | ✔ | ✔ |
- AML program aligned with international best practices (FATF).
- Accounting records, including customer account data and transaction details.
- Cybersecurity program.
- Transaction limits consistent with risk management and anti-financial crime policies.
- Be registered with the CNAD.
- Legal representation in El Salvador.
- Detailed organisational structure.
- Cybersecurity measures.
- Risk management.
- AML/KYC systems in place.
- Payment of registration and annual renewal fees.
Step 1: Evaluation
Estimated 1 - 2 weeks
We'll assess your business plan, advise on licensing (BSP vs DASP), organisational structure, and outline requirements, costs, and timelines.
Step 2: Fit & Proper
Estimated 1 - 2 weeks
We ensure your team's qualifications, experience, and readiness for El Salvador's compliance standards.
Step 3: Company Formation
Estimated 1 week
We set up an SRL entity in El Salvador and secure necessary registrations.
Step 4: Documentation & Preparation
Estimated 4 - 6 weeks
We prepare your licence application (to BCR for BSP or CNAD for DASP), including AML/KYC policies, and handle any translations.
Step 5: Submission & Approval
(Estimated: 8 weeks)
We submit your application, manage communication with the regulator, and address any follow-up questions.
Step 6: Post-Approval Support
ongoing
We offer ongoing compliance support, assisting with reporting, potential audits, and maintaining your licence.
Step 7: Banking & Payments
Estimated: 4 - 8 weeks
We leverage our network to help you find crypto-friendly banking solutions in El Salvador, including card issuing options.
- Costs: Expect application fees, company registration, AML/KYC solutions, and professional support (like translations). Contact us for a clear breakdown.
- Timeline: Based on our experience, the process can take 3-4 months. We’ll aim for the fastest outcome, leveraging our experience and local connections.
1. Why choose El Salvador for my crypto business?
El Salvador is leading the way in the adoption of cryptocurrency as legal tender, positioning itself as a global crypto hub. You’ll enjoy tax exemptions on Bitcoin profits and easier access to banking.
2. Is cryptocurrency activity legal in El Salvador?
Yes, cryptocurrency activity is permitted in El Salvador but requires a licence. There are two types of licences: one is Bitcoin-specific and issued by the Central Bank of Reserve (BSP licence). The other is complete authorisation and is managed by the National Commission of Digital Assets (DASP licence).
3.BSP vs. DASP – what's the difference?
A BSP licence focuses on Bitcoin-related services, while a DASP licence covers other cryptocurrencies. We'll help you choose the right one(s) for your business.
4. How long does the application process take?
Based on our experience, the process can take 4 months for a single licence application and 6-7 months for applications for both licences. Delays can occur due to regulatory backlogs or if information requests from authorities arise. We'll proactively communicate to minimise any potential setbacks.
5. Do I need a full team based in El Salvador?
No, El Salvador offers flexibility in where you base your core team. While a local legal entity and office address are required, you don't need a local director, MLRO, or a physical office (though these are recommended). You can leverage talent from your existing subsidiaries or outsource certain functions, allowing for a streamlined approach.
6. What qualifications does my team need?
El Salvador emphasises financial, compliance, and IT experience. We can help you identify potential gaps and offer solutions, whether that's connecting you with local talent, leveraging your existing expertise, or recommending suitable outsourcing partners.
7. With an El Salvador licence, can I operate in other countries?
El Salvador's licences primarily allow operations within the country, but there are no limitations imposed to the locality of the customers you can serve, which is implied permission for a global reach. We can help if you require a local licence when tapping into specific markets.
8. How difficult is it to find crypto-friendly banking in El Salvador?
El Salvador's Bitcoin-friendly landscape may offer a significant advantage in securing banking relationships compared to some other jurisdictions. We'll tap into our local network to make introductions.
9. Are there hidden costs in getting a crypto licence in El Salvador?
Along with official fees, expect costs for legal support, company setup, ongoing compliance and potential translation expenses. We provide transparent breakdowns to eliminate surprises.
10. What are the ongoing compliance requirements?
Expect regular AML/KYC, reporting, and audits. We offer ongoing compliance support to keep you on track.
11. Why choose your company?
We have a proven track record and a client-focused, streamlined project management approach for licensing applications. We're experts in navigating global regulations, aiming to be your long-term expansion partner.
12. Can you help with the entire licence application process?
Absolutely! From company formation to application preparation, submission, and communication with regulators, we'll guide you every step of the way.
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