How to choose a suitable jurisdiction and where it is better to register a company for the safe realization of an ICO, the question that arises with everyone who wants to raise money for their startup using the new possibilities for collecting money through ICO.
This question seems simple and at the same time it is probably the most difficult question if you want a safe, lawful and effective ICO. Therefore, after reading this article, still we recommend to contact the professionals who will help you to structure your project individually according to your requirements.
You crucially must realize that the main thing for your ICO project is not where your company will be registered but where the investors of your project are. Registration of a company in a crypto loyal jurisdiction does not give you a security guarantee if you violate the rules of the country where your investors are located.
And yet where to register a company for ICO? How to choose the right jurisdiction not only to raise money for ICO but also to continue the activities of your project? After all, collecting money is only the first stage. Next, you need to implement your project, conduct the operations, pay taxes and grow as a business.
While legislation still falling behind the industry, many countries have begun issuing guidelines for ICO investors. Although these recommendations are not ideal, they should be considered as a progress in their own way. It`s important to understand that they are developing taking into account the interests of investors and the desire to make ICO more transparent.
Herewith the rules and guidelines differ significantly between the jurisdictions. They depend on several factors, for example, on what attitudes the authorities have towards cryptocurrencies, what securities laws, consumer and investor protection laws, the KYC/ AML legislative framework do they have, and do the jurisdictions ready to promote innovation in the field of blockchain.
Many jurisdictions are trying to attract progressive entrepreneurs to their territory and are quite open in order to help you succeed.
When choosing the jurisdiction for your project, you need to consider the answers to the following questions:
1. Does the jurisdiction have high quality Securities & commodities?
2. Does the jurisdiction have good proximity to the Regulator?
3. Does the jurisdiction have a well-reasoned policy of licensing and sandboxes?
4. Does the jurisdiction have a сonsumer and investor protection?
5. Does the jurisdiction have a clear definition of a Cryptocurrency?
6. Does the jurisdiction have clear Crowdfunding guidance?
7. Does the jurisdiction have the proper Corporate formations for your needs?
8. Does the jurisdiction have a favourable tax policy?
9. Does the jurisdiction have clear AML and KYC Guidelines?
These are not the only questions for which you need to know the answer when choosing a jurisdiction for your ICO. You also need to know how the jurisdiction chosen by you relates to your technology, do banks are crypto loyal in this jurisdiction, how well-developed infrastructure and access to the talents you will need to hire after the end of the ICO event are.
In the continuation of this article, I will detail what I understand under the questions listed above that will certainly help you decide on the choice of the jurisdiction.
Disclaimer: This article shouldn`t be considered as a legal advice since I`m not a lawyer. There I`m representing only my views, and not the views of my employer, investors, or partners. On top of all, anything written here shouldn`t be construed as an investment advice too. BEFORE IMPLEMENTING ANYTHING FROM THIS ARTICLE YOU SHOULD TALK TO A LAWYER.