On-shore VASP in Grenada
Locally-incorporated VASP that operates under full local jurisdiction, holding all required licenses and registrations.
On-shore VASP is conditionally permitted in Grenada with a local entity, subject to AML obligations and medium licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- Medium
- Last updated
- 2026-07-13
AML Obligations
- Licensees are designated 'reporting entities' under the Proceeds of Crime Act (gd.licensing.virtual-asset-businesses-are-designated)
- Must implement Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) under KYC procedures (gd.licensing.customer-due-diligence-cdd-and)
- Must adopt a risk-based approach to assessing and mitigating ML/TF risks (gd.licensing.risk-based-approach-to-assessing-and)
- Must keep records of transactions and customer identification data (gd.licensing.record-keeping-of-transactions-and-customer)
- Must monitor transactions for suspicious activity and report STRs to the FIU (gd.licensing.monitoring-of-transactions-for-suspicious, gd.licensing.reporting-of-suspicious-transactions-strs)
- Must appoint a designated AML/CFT Compliance Officer (gd.licensing.appointment-of-a-designated-amlcft)
- Must provide ongoing employee training (gd.licensing.ongoing-training-for-employees)
- Travel Rule applies: for transfers above USD/EUR 1,000, full originator and beneficiary info must be collected and transmitted; below that threshold, names and account/transaction references must be collected and held (gd.travel-rule.all-transfers-above-usdeur-1000, gd.travel-rule.all-transfers-below-usdeur-1000)
- Information collected under the Travel Rule must be retained for at least 7 years from the date of transfer (gd.travel-rule.information-retention-section-162-mandates)
- Must register with the FIU and/or notify the FIU of operations under the AML/CFT regime (gd.aml.registrationnotification-vasps-are-generally-required)
Key Restrictions
- Must be a company incorporated in Grenada (gd.licensing.an-applicant-must-be-a)
- Must have directors or senior officers ordinarily resident in Grenada, or other arrangements acceptable to the Authority (gd.licensing.while-the-act-does-not)
- Applicants and key personnel must pass a Fit and Proper Test (gd.licensing.fit-and-proper-test)
- Must maintain sufficient capital to carry on virtual asset business — specific minimum capital to be prescribed by the FSA via regulations; applicant should consult the FSA directly (gd.licensing.the-act-mandates-that-a, gd.licensing.the-specific-minimum-capital-requirements)
- If unable to comply with Travel Rule obligations, the VASP must decline the transfer and report to the FIU (gd.travel-rule.declining-transfers-section-164-states)
Key Risks
- Specific minimum capital requirements are not yet published in regulations — uncertainty during application process (gd.licensing.the-specific-minimum-capital-requirements)
- Limited public enforcement history — no significant public crypto enforcement actions reported, creating ambiguity in how penalties are applied (gd.enforcement.such-actions-have-not-occurred, gd.enforcement.any-enforcement-has-been-handled)
- No explicit regulatory mandate for asset segregation or insurance/bonding for custodians, creating counterparty risk exposure (gd.aml.not-explicitly-detailed-in-vasp, gd.aml.no-explicit-mandate-grenadas-current)
- Tax classification risk — profits from crypto activities could be reclassified as business income (taxed at 28% corporate rate or progressive personal rates) vs. tax-exempt capital gains (gd.tax.important-distinction-this-exemption-typically)
- VAT obligations may apply to fee-based crypto services, adding compliance overhead (gd.tax.services-provided-for-a-fee)
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Grenada Financial Services Authority (FSA): The competent authority responsible for licensing, supervision, and enforcement of the Virtual Asset Business Act.
Grenada Financial Intelligence Unit (FIU): Responsible for anti-money laundering and combating the financing of terrorism (AML/CFT) supervision of virtual asset businesses.
Exchange between virtual assets and fiat currencies.
Exchange between one or more forms of virtual assets.
Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
Provision of virtual asset payment services.
Transfer of virtual assets.
Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
The Act mandates that a licensee must, at all times, maintain sufficient capital to carry on its virtual asset business.
The specific minimum capital requirements are to be prescribed by the Authority (FSA) through regulations or directives. Applicants should consult the FSA directly or its published guidelines for the exact amounts, which may vary depending on the scope of activities.
Virtual asset businesses are designated as "reporting entities" under Grenada's Proceeds of Crime Act and other AML/CFT legislation.
Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures (Know Your Customer - KYC).
Risk-based approach to assessing and mitigating money laundering and terrorism financing risks.
Record-keeping of transactions and customer identification data.
Monitoring of transactions for suspicious activities.
Reporting of suspicious transactions (STRs) to the FIU.
Appointment of a designated AML/CFT Compliance Officer.
Ongoing training for employees.
An applicant must be a company incorporated or established in Grenada. This requires a legal entity registered within the jurisdiction.
While the Act does not explicitly mandate all directors or senior officers to be Grenadian residents, it does require that the applicant "has directors or senior officers that are ordinarily resident in Grenada or other arrangements in respect of directors or senior officers that the Authority considers appropriate." This indicates a strong preference for or requirement of local management or significant operational presence.
Evidence fact gd.licensing.fit-and-proper-test not found (may have been renamed).
Financial Intelligence Unit (FIU) Grenada: This is the primary authority responsible for supervising and enforcing AML/CFT compliance for VASPs.
Proceeds of Crime Act, Cap. 254: This act defines money laundering offenses and establishes the framework for combating financial crime.
Financial Intelligence Unit Act, Cap. 109A: Establishes the FIU and its powers, including oversight of financial institutions and designated non-financial businesses and professions (DNFBPs), which now explicitly include VASPs.
Guidance for Virtual Asset Service Providers (VASPs): The FIU has issued guidance notes to clarify the application of AML/CFT requirements to VASPs, in line with Financial Action Task Force (FATF) recommendations. This guidance is the most relevant document for crypto businesses.
Registration/Notification: VASPs are generally required to register with the FIU and/or notify the FIU of their operations, ensuring compliance with AML/CFT obligations. This is not a specific "license" but a requirement to operate legally under the AML/CFT regime.
Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) for high-risk customers.
Suspicious Transaction Reporting (STR) to the FIU.
Not explicitly detailed in VASP AML/CFT Guidance: While general AML/CFT guidance focuses on identifying clients, monitoring transactions, and reporting, it typically does not go into the specifics of prudential requirements like asset segregation.
No explicit mandate: Grenada's current AML/CFT framework for VASPs does not explicitly require custodians to carry specific insurance or bonding to cover potential losses of client digital assets.
All transfers above USD/EUR 1,000 (or equivalent): Both originator and beneficiary information must be collected, held, and transmitted.
All transfers below USD/EUR 1,000 (or equivalent): Originator name and account number (or unique transaction reference) and beneficiary name and account number (or unique transaction reference) must be collected and held. This information should be readily available and immediately provided to authorities upon request. Full Travel Rule data is required if there are suspicions of money laundering or terrorist financing, irrespective of the threshold.
Information Collection: VASPs must "obtain and hold the originator information and beneficiary information" as per FATF R.16. This includes names, physical addresses, unique transaction identifiers, and virtual asset wallet addresses for both originator and beneficiary.
Information Retention: Section 16(2) mandates that VASPs must "store the information obtained and held under subsection (1) for a period of not less than seven years from the date of the virtual asset transfer."
Declining Transfers: Section 16(4) states that "Where a virtual asset service provider is unable to comply with subsection (1), the virtual asset service provider shall decline the virtual asset transfer and make a report to the Financial Intelligence Unit."
Virtual Asset Business Act, 2023 (Act No. 36 of 2023):
General Rule: Grenada does not impose a general capital gains tax on individuals or companies.
Important Distinction: This exemption typically applies to long-term passive investments. If the activities are deemed to be a "trade or business," the profits would then be treated as income and subject to income tax (see below). The distinction depends on factors like frequency of trades, intent, organization, and scale of activity.
Profits from crypto trading or other crypto-related business activities would be aggregated with other income and taxed at progressive rates.
Companies legally registered in Grenada and engaged in crypto-related activities (e.g., operating an exchange, a mining farm, a blockchain development firm) will have their net profits taxed at the corporate income tax rate.
Rate: The standard corporate income tax rate in Grenada is 28%.
Services provided for a fee related to cryptocurrency are generally subject to VAT if the provider is VAT-registered and the services are rendered in Grenada. Examples include:
Virtual Asset Business Act (VABA), 2020: This Act provides the framework for the regulation of virtual asset businesses in Grenada, requiring them to be licensed by GARFIN and comply with AML/CFT requirements.
Require Registration/Licensing: All entities operating as Virtual Asset Service Providers (VASPs) in Grenada are legally required to be licensed by GARFIN and comply with AML/CFT regulations enforced by both GARFIN and the FIU.
Such actions have not occurred at a level deemed "significant" for public reporting.
Any enforcement has been handled privately, or through warnings and cease-and-desist orders without public financial penalties.
Virtual Asset Business Act, 2020 (Grenada):
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — on-shore VASPs are permitted in Grenada under the Virtual Asset Business Act (VABA), requiring a company incorporated locally, a license from the FSA/GARFIN, FIU registration, comprehensive AML/CFT programs including the Travel Rule, and fit-and-proper directors; specific minimum capital amounts are still to be prescribed by regulation.
Questions this verdict aims to answer
- What license(s) are required to operate locally?
- What capital, governance, and reporting obligations apply?
- What is the application process and timeline?