Mauritius has positioned itself as a forward-thinking jurisdiction in the regulation of virtual assets and related services. The enactment of the Virtual Asset and Initial Token Offering Services Act 2021 (Act), effective from 7 February 2022, established a comprehensive legal and regulatory framework for the operation of virtual asset service providers (VASPs) and issuers of initial token offerings (ITOs) in or from Mauritius.
Key provisions of the Act, the licensing regime, compliance obligations, and the practical implications for businesses seeking to operate in this developing sector are outlined below.
There are currently 11 VASPs and one ITO licensed in Mauritius.
Defining virtual assets and scope of the Act
Under the Act, a virtual asset is defined as a digital representation of value that can be digitally traded or transferred and may be used for payment or investment purposes. Notably, the definition excludes digital representations of fiat currencies, securities, and other financial assets which are regulated under the Securities Act 2005. The Act applies to any VASP or issuer of ITOs conducting business in or from Mauritius, thereby ensuring a broad regulatory reach.
VASPs: Activities and licensing
VASPs are entities that, as a business, conduct one or more of the following activities:
- exchange between virtual assets and fiat currencies (via exchanges, peer-to-peer platforms, ATMs, debit cards, or over-the-counter trading)
- exchange between different forms of virtual assets
- transfer of virtual assets
- safekeeping or administration of virtual assets or instruments enabling control over them
- participation in, and provision of, financial services related to an issuer’s offer and/or sale of a virtual asset
It is important to note that the licensing requirements under the Act would only be triggered where the VASP carries out any of the above-mentioned activities for and on behalf of another person.
Only companies incorporated in Mauritius are eligible to apply for a VASP licence, which is issued by the Financial Services Commission (FSC). The Act provides for several classes of VASP licences, as follows:
- Class M (Broker–Dealer)
- Class O (Wallet Services)
- Class R (Custodian)
- Class I (Advisory Services)
- Class S (Market Place/Exchange)
Applicants must demonstrate adequate resources, infrastructure, and competent staff, as well as robust risk management and compliance systems. The FSC will also assess the fitness and propriety of controllers, beneficial owners, and officers.
Virtual assets as an asset class in Mauritius
The FSC has issued updated guidance recognising virtual assets as a distinct class for investment, but only for sophisticated and expert investors as defined under the Securities Act 2005 as well as expert funds, specialised collective investment schemes and professional collective investment schemes, as defined under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008.
The FSC emphasises that investments in virtual assets are high-risk due to their price volatility and should only be undertaken by knowledgeable and financially literate investors. Importantly, the FSC warns that virtual assets are not legal tender in Mauritius and investments in them are not protected by any statutory compensation arrangements.
Operational and compliance requirements for VASPs
A VASP must maintain a physical office in Mauritius, with its business activities directed and managed locally. As part of the licensing process, the FSC evaluates the location of strategic decision-making, board meetings, and the residence of key executives to ensure genuine local presence.
VASPs are required to:
- obtain prior FSC approval for the appointment of officers and senior executives (who must be resident in Mauritius)
- maintain segregation of client assets and comply with the Virtual Asset and Initial Token Offerings Services (Custody of Client Assets) Rules 2022
- implement systems to prevent market abuse, ensure business continuity, and manage cybersecurity risks
- adhere to capital requirements and annual reporting obligations as set out in the relevant Rules
- comply with anti-money laundering and counter-financing of terrorism (AML/CFT) obligations, as VASPs are classified as ‘financial institutions’ under the Financial Intelligence and Anti-Money Laundering Act (FIAMLA)
Issuers of ITOs: Registration and disclosure
Only companies may act as issuers of ITOs in Mauritius, and they must be registered with the FSC. An ITO is defined as a public offer for sale of a virtual token in exchange for fiat currency or another virtual asset. A virtual token is defined under the Act as any cryptographically secured digital representation of a set of rights, including smart contracts, provided on a digital platform and issued or to be issued by an issuer of initial token offerings.
The registration process requires submission of:
- certificate of incorporation
- a comprehensive white paper (including a legal opinion on compliance with the Act)
- AML/CFT policies and measures
- application fee
The white paper must provide full and accurate disclosure, enabling potential purchasers to make informed decisions. It must detail the class of tokens offered, business plan, use of proceeds, rights attached to tokens, risk factors, technical specifications, and more. Any material changes or new information must be promptly disclosed to the FSC and the public.
Offer period and purchaser protections
The offer period for ITOs is capped at six months. Purchasers are afforded significant protections, including the rights to:
- rescind or claim damages if the white paper contains material misrepresentations
- withdraw from a purchase within 72 hours of agreement, with refunds to be processed within five working days
Advertising and professional conduct
All advertisements relating to ITOs must be accurate, clearly identifiable, and consistent with the white paper. Both VASPs and issuers of ITOs are required to act honestly, fairly, and with due skill, care, and diligence, maintaining high standards of professional conduct and robust corporate governance.
Additionally, VASPs are required to demonstrate compliance with the following FSC rules:
- Virtual Asset and Initial Token Offerings Services (Risk Management) Rules 2022: VASPs must implement sound, effective, and comprehensive risk management systems to address all risks to which they may be exposed.
- Virtual Asset and Initial Token Offerings Services (Cybersecurity) Rules 2022: VASPs are required to establish and maintain robust cybersecurity and operational risk management systems.
- Virtual Asset and Initial Token Offerings Services (Custody of Client Assets) Rules 2022: VASPs holding client assets must segregate client accounts and ensure client assets are protected and not subject to claims by the VASP’s creditors.
- Virtual Asset and Initial Token Offerings Services (Capital and Other Financial Requirements) Rules 2022: VASPs must meet minimum capital requirements, which vary by licence class.
- Virtual Asset and Initial Token Offerings Services (Statutory Returns) Rules 2022: VASPs must submit statutory returns to the FSC within four months after the close of their financial year.
- Virtual Asset and Initial Token Offerings Services (Publication of Advertisements) Rules 2022: VASPs and any issuer of ITOs that carry out business in or from Mauritius as well as any VASP, or any ITO that intends to advertise and market relevant products/ services in or from Mauritius need to comply with these rules. These rules require advertisements for virtual assets and initial token offerings to be fair, clear, and not misleading, with appropriate risk disclosures. VASPs must ensure all marketing materials are accurate, avoid exaggerated claims, and target only suitable audiences. Advertisements targeting the general public must be filed with the FSC before publication and records kept for the longer of seven years after the advertisement ceases to be available to consumers, or such other period which the FSC may request.
- Virtual Asset and Initial Token Offerings Services (Travel) Rules 2022: These rules provide for additional obligations to be complied with by VASPs, intermediary VASPs and financial institutions when, inter alia, involved with cross-border wire transfer or batch file transfer of virtual assets, on behalf of customers.
- Virtual Asset and Initial Token Offerings Services (Client Disclosure) Rules 2022: VASPs need to ensure that their clients are sent information that is clear, fair and not misleading. These rules apply to all VASPs that carry out business in or from Mauritius as well as all VASPs that sell relevant products/ services in Mauritius.
Conclusion
Mauritius operates a dedicated virtual-assets legal framework that combines VASP licensing and issuer registration with integrated anti-money laundering regulations that are aligned to the Financial Action Task Force recommendations, making it a clear and workable onshore/ offshore regime for virtual assets related services.
A dozen of the G20 and OECD countries now have dedicated or near-comprehensive virtual asset frameworks (including the European Union, United States of America United Kingdom, Japan and Singapore). While legal frameworks differ in design, the unifying theme is alignment with international AML/CFT standards and increasing oversight of virtual asset service providers and token issuers. For businesses, the key question is no longer whether regulation applies, but which jurisdiction offers the right balance of accessibility, credibility, and operational efficiency.
The regulatory framework established by the Act positions Mauritius as a leading jurisdiction for virtual asset activities, balancing innovation with investor protection and market integrity. Businesses seeking to operate as VASPs or issuers of ITOs must navigate a rigorous licensing and compliance landscape, but in return, benefit from a clear and supportive legal environment. As the virtual asset sector continues to evolve, Mauritius remains committed to upholding international standards and fostering a secure, transparent, and dynamic marketplace.
