Registrar Accreditation: Financial Considerations
Before you undertake the registrar accreditation process, please read and consider the following costs to you. This is not an exhaustive list of all costs involved in becoming an accredited registrar, but is meant only as a helpful listing of some of the costs registrar applicants should be prepared to pay in connection with becoming an ICANN-accredited registrar.
What you will pay to ICANN:
- US$3,500 non-refundable application fee. Following an initial review of completed application materials, ICANN will contact applicant with instructions on how to submit payment.
- US$4,000 yearly accreditation fee due upon approval and each year thereafter.
- Variable fee (quarterly) billed once you begin registering domain names or, the first full quarter following your accreditation approval, whichever occurs first. This fee represents a portion of ICANN's operating costs and, because it is divided among all registrars, the amount varies from quarter to quarter.
- Transaction-based gTLD fee (quarterly). This fee is a flat fee charged for each new registration, renewal or transfer. This fee can be billed by the registrar separately on its invoice to the registrant, but is paid by the registrar to ICANN.
- Please refer to http://www.icann.org/general/financial.html for the most recent ICANN budget to find additional details about the quarterly variable and transaction-based fees, including possible options for relief.
- Please refer to http://www.icann.org/financials/payments.htm for instructions on how to submit payments to ICANN.
Other financial considerations:
An applicant must demonstrate that it has adequate working capital available for the operation of the registrar business, given the registration volume reasonably projected by applicant. For applicants seeking initial accreditation, demonstration of the ability to procure liquid capital immediately available in the applicant's name at the commencement of the accreditation period in an amount of US$70,000 or more will be deemed adequate, although a lesser amount will be accepted upon a showing that in the circumstances the applicant has adequate liquid working capital. Evidence of independent verification of the capital (such as by guaranteed bank loan or by a guaranteed credit line or letter of credit from a recognized financial institution) need not accompany the application, but must be presented as a condition of accreditation becoming effective.
In cases where an applicant cannot demonstrate that it has access to at least $70,000 in liquid working capital, the applicant must demonstrate that it has sufficient resources available to meet its business needs in addition to adequate cash reserves, and that its business model does not require US$70,000 in liquid working capital for day-to-day operations.
Factors that may demonstrate this include:
- verifiable and reliable cash flow that is sufficient to maintain ongoing operations; or
- the registrar is an Affiliate (as defined in RAA) of an existing, sufficiently capitalized registrar;
- the registrar's projected registration volume warrants lesser capitalization;
- the registrar's operating costs are projected to be demonstrably less than industry norms, or identifiable circumstances will result in more predictable and stable operating costs;
- reduced projected registrar start-up costs due to current operation of a registrar or reseller business;
- other factors in furtherance of ICANN's underserved regions initiative, such as targeting domain name registration services to an underserved market region where costs might be lower.
Applicants with existing registrar businesses, or proposing to convert their existing domain-name reseller businesses to registrar businesses, must provide with the application an independently verified financial statement (such as by an accountant's audit) demonstrating the amount of working capital available for the registrar business.
What you will pay to Registry Operators:
There are additional financial considerations for registrars to do business with gTLD registries. Please refer to each registry operator's website or contact the registry operator directly for details. A complete listing can be found at http://www.icann.org/registries/listing.html.