The blockchain technology industry has grown exponentially over the last decade and is now booming into mainstream popularity with applications in various sectors: cryptocurrency, financial services, healthcare, IoT, supply chain management, etc. For the last years, there has seen a rapid increase in the number of crypto businesses looking to innovate and profit. However, because the technology is so new and its global implications so vast, many governments have not adapted yet, creating a lack of supervision and regulation in this constant evolving space. Similar to governments, many banks make it difficult to get a bank account that will permit cryptocurrency operations.
The Virtual Asset and Initial Token Offering Services Act 2021 (the “Act” or “VAITOS Act 2021”), has come into force on the 7th of February 2022 in Mauritius to provide for a regulatory framework for new and developing activities regarding Virtual Assets (“VAs”) and Initial Token Offerings (“ITOs”), as well as to safeguard against money laundering and financing of terrorism associated with VAs.
Complementing the VAITOS framework, the FSC Mauritius has also issued numerous rules to further enhance regulatory measures within Mauritius in relation to
- Capital and other Financial Requirements,
- Client Disclosure,
- Custody of Client Assets,
- Cybersecurity,
- Publication of Advertisements,
- Risk Management,
- Statutory Returns and
- Travel.
The Act and the VAITOS Rules empower the Financial Services Commission (the “FSC”) to regulate and supervise Virtual Asset Service Providers (“VASPs”) and issuers of ITOs within the non-bank financial services sector in Mauritius.
Following the Mauritius National Budget 2024/2025, gains on sale of Virtual Asset and Virtual Token are tax exempt.