Are you looking to launch a Crypto or Blockchain focussed Enterprise?
If so, straight up, you’ll be pleased to know, that Offshore Companies are widely used in the Cryptosphere including for:
- Bitcoin Mining
- Trading Cryptocurrencies
- Investing in Cryptocurrencies
- ICO Launches
- Cryptocurrency Exchanges
- Trading/Manufacturing NFTs
- Launching DAOs
- Crypto Token generation/sale
- And more
Crypto Business License Options
What kind of Crypto business do you intend to do?
Would your prospective/targetmarket dictate (eg in terms of market credibility) that you come to market as a Licensed Organisation?
(if so) firstly you will need to work out what kind of Crypto license you could or should apply for.
There are a number of Licenses you could potentially apply for “Offshore” for Crypto/Blockchain related Enterprises including:
- A Gibraltar DLT License
- An Estonian Cryptocurrency Exchange (and/or Crypto Wallet Provider) License
- A Malta Crypto business license
- A Mauritius VASP License
- An Isle of Man ICO License
- A Swiss ICO license
- A Lithuanian Cryptocurrency Exchange/Wallet Provider License
- A Caymans VASP License
- A BVI VASP License
- A UAE Crypto business license
The cost to incorporate and apply for a License for businesses of the kind described above typically ranges from $US20,000 to circa $50,00 depending on which jurisdiction you choose.
Decentralized Autonomous Organizations (DAOs)
If you’d prefer to not have to go down the VASP Licensing road you might want to consider setting up as a DAO.
A DAO is a Blockchain structure (like a secure database), that any member can leverage to self-govern through participation; A DAO sets rules – baked into code – and permits voting through digital tokens (a form of cryptocurrency) — all while leveraging smart contracts. Only that DAO’s Token holders have the power to vote.
In essence, a DAO allows groups of participants to create organizational forms beyond the hierarchical, top-down corporate firm (which must be responsive to the needs of a board and shareholders). DAOs essentially eliminate or minimize the roles of executives and managers in the organization, relying instead on transparent rules that apply to all members and participants.
The primary aim behind the creation of a DAO is to create a virtual entity to replace the central management of previous forms of organization. A decentralized autonomous organization (DAO), is an organization, particularized by rules encoded as a computer program, that is transparent, and controlled by the organization members. In terms of decision making a DAO is, in effect, unable to be influenced by any outside party including any central government.
DAOs are particularly prevalent in the Ethereum blockchain ecosystem, combining ideas about organizational forms, coordination, network effects, blockchain, and smart contract technology. A DAO allows a group to organize around a mission or goal and to coordinate the mission via smart contracts, enforced immutably and autonomously on the blockchain. DAOs represent an evolution in how people coordinate with one another, as the organization itself is autonomous from any third party intermediary’s influence and goals.
The main reason a DAO is formed is to decentralize and automate the governance of an organization. The rules by which a DAO operates are encoded as a computer program that is accessible via the blockchain, and controlled by all of the organizing members, rather than by a central governing board. Since the blockchain is essentially a public record, the DAO seeks to provide total transparency, requiring that all of its financial transaction records be recorded by a public facing blockchain. There is no top-down hierarchal structure to a DAO; A DAO depends almost entirely on the operation of autonomous smart contracts to enliven the rules and carry out the decisions made by/within the organization. In terms of where you might incorporate a DAO in a low or nil tax environment:
- You could set up a Marshall Islands DAO LLC
- You could set up a Wyoming DAO LLC
- You could set up a Panama Foundation DAO
You could also potentially set up a Caymans Foundation Company to act as a DAO. However, you’d need to be able to satisfy the Compliance people in the Caymans that what you’re proposing is a not a licenseable under the Caymans VASP Legislation.
Non Licensed Options??
If you’re a typical start up you’ll probably find it hard to find the 20-50k needed to apply for a Crypto Business License.
If you’d prefer to go down the non-licensing road you could incorporate a Crypto Token Manufacturing/Marketing business as a Company in St Vincent (which has passed a VASP Bill but which has not come into existence) or (ideally) in Panama…. Panama tried to pass a VASP law but it was struck down as unconstitutional by the Supreme Court. Hence there is no risk, if you incorporate in Panama, of a law being passed subsequent to your incorporation requiring you to either migrate/redomicile out of the jurisdiction or apply for a VASP license.
Samoa also has not passed VASP Legislation (and has not publicly stated an intention to do so).
Samoa is attractive in that it has rather minimal annual compliance requirements (eg there is no requirement to prepare formal accounts or to file a return)
For details in regards to Samoa Company formations check this Link: https://offshoreincorporate.com/samoa-international-business-companies/
For details in regards to Panama Company formations check this Link: https://offshoreincorporate.com/panama-offshore-companies/
Would you like to know more? Then please Contact Us:
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.