The question of where to establish your start-up for which you will make an Initial Coin Offering (ICO) is important. It can make or break your organizational framework, regardless of the technological, legal and marketing skills of your organization. So that, for start-up a new company you should need to know about ICO top list.
The aspiring entrepreneurs and the new companies prepared to do ICO know that this question is cautious and that it generates many questions. This issue has become even more worrisome after the widespread collapse of the values of all cryptocurrencies after China and South Korea banned ICOs in 2017. Cryptocurrency enthusiasts are concerned that bans have established a precedent portentous. At present, companies must be increasingly cautious about where they are installed or where they market their ICOs so as not to break the law.
For example, the scope of competence of the Securities and Exchange Commission of the United States extends beyond the jurisdiction of the country. The sale of tokens classified as securities not registered by the SEC to a citizen of the United States may trigger SEC sanctions as heavy fines. Therefore, in this case, it would make sense to create tokens that bypass the regulatory definition of values or to design tokens that fully comply with SEC standards.
When deciding the possible location of your ICO, what factors constitute the most important considerations? These considerations border on the following:
Some countries have a special tax on ICO (India, for example). Will the additional taxes be unfavorable for the financial well-being of the ICO of the company?
Laws on values
When tokens are issued that could be considered equivalent to assets or financial values, it is important to place the company in a place where the regulators look more favorably to the ICO.
In certain jurisdictions, liability laws are more favorable to debtors than to creditors. For example, Wyoming is highly protective, while Florida is not. Nevis is highly protective, Singapore does not.
A common norm that is used more and more is the so-called “dual structure”. The dual structure comprises the issuing company ICO (ICOCO) and the operating company (OPCO).
The dual structure addresses the considerations of the ICO listed above in the following ways:
In fiscal matters, the activities of the entities will determine the effective tax rate.
In the case of legal responsibility, it makes sense to have two entities, so that at no time should the entire business structure face a liability risk from a legal point of view. It should be noted that some jurisdictions have laws that are more favorable for a company with a debt liability than those with that liability.
Compliance with securities laws
The question of compliance with securities laws must also be resolved. A company can be located in a country where these laws are lax, but taking into account if the location of the company will allow the marketing of ICO to prospects in a given country.
It is increasingly difficult to open fiduciary bank accounts for companies in the cryptocurrency business. This will affect things such as payments to staff and daily business transactions of the company. The separation of entities can help to circumvent the restrictions on the operation of the accounts in trust currency in the banks by the cryptography companies. For example, the OPCO component can be located in countries that allow them to operate fiduciary bank accounts to allow for the payment of personnel and the financing of operations.
The segmentation option
This minimizes the chances of miscalculating taxes and liabilities. This strategy could be plausible, given that even the ideal business profiles for ICOs, such as trusts and foundations, can no longer be used beyond the issuance of the ICO. However, by separating the two entities, activities can be coordinated to take advantage of the tax advantages and avoid prohibitive security regulations in certain jurisdictions. With many OPCOs spread across several countries, it is easier to collect the tokens generated in sales and to reimburse your staff with FIAT.
The operating structures of companies, such as foundations, have been very useful in the issuance of ICO. Some ICOs work better by establishing foundations and trusts, separate from the operating components of the business. The ICOs of companies like Ethereum were managed by the Foundations created by these companies to manage their ICOs and tokens.