The 5 most popular jurisdictions for your company's tokenization
Still wondering what jurisdiction to choose to tokenize your company?
Hi, this is Iwo Hachulski from Nextrope. For the Holiday edition of the newsletter, we have prepared a special gift for you - an insight analysis of 5 of the most popular jurisdictions for your company's tokenization. We already helped 17 companies tokenizing their businesses from A to Z and we are more than happy to share with you some advice in that regard. Special attention will be paid to Estonia, one of the leaders in introducing regulations facilitating the tokenization of businesses.
Today we’ll focus on:
❓ What are the legal regulations regarding tokenization in each of the discussed countries?
✅What is the Estonian e-residence program and how it can facilitate the whole process?
🇪🇺Why it might be more beneficial for some of the entrepreneurs to tokenize their business within the EU?
If you have any questions, please don’t hesitate to ask as our team is happy to answer them. Also, if you are working on any fintech or blockchain projects and would like to be featured in our newsletter, please reach out via email at contact@nextrope.com
Not financial advice
We have done our best to ensure that the information provided in the Newsletter and the resources available for download are accurate. However, the information contained in this Newsletter and the resources available for download are not intended as, and shall not be understood or construed as, financial advice.
Tokenization itself is not as demanding a process as many might think, however, experts' assistance at each of its stages may prove to be crucial for long-term project development. Thanks to the cooperation with a team of professionals, at Nextrope we will guide you through all the intricacies of the whole process and ensure avoiding any obstacles encountered. The key to success will be an extensive preliminary analysis - headed by a legal analysis of the project you would like to tokenize, and individual consultations with one of the experts from our team.
Although more and more countries supporting entrepreneurs in the field of ICO and STO can be identified, Estonia is in many ways superior to its competitors. It is worth noting:
the low costs of doing business, including administrative expenses such as company registration costs
no requirement to contribute share capital, thus significantly reducing initial expenses
thanks to the wide application of the Estonian e-residence program, company registration is fast and often takes only one day
Moreover, all formalities can be completed online and the presence of the applicant in Estonia is not required.
In other countries such as Singapore or Switzerland, the company's representative should be within the country at all times. Often, even if this condition is not a necessary element, regulations and extensive bureaucracy prevent or diminish tokenization activities. This is the case in Japan and Malta, among others. In addition, Estonia's membership in the European Union also guarantees transparent regulations and stable prospects for further development.
It should be remembered that the countries' favoritism towards the crypto market and thus the process of tokenization should be perceived primarily through the prism of real regulations, and not through the very attitude and image built by the government. Clear tax regulations related to crypto transactions and a zero-tax rate on capital gains have already encouraged many entrepreneurs to start or move their business to Estonia. Moreover, the Estonian Financial Supervision Authority (EFSA) has ensured that clear rules on ICO are in place. Utility tokens do not have to be registered in EFSA's internal system. The formal supervision of the institution applies to security tokens only. EFSA can also be contacted by entrepreneurs wishing to establish themselves in the Estonian market to ask for a legal opinion on their project before starting the whole process.
Unfortunately, as in other EU countries, obtaining a company bank account for companies operating on the crypto market is hindered by extensive AML regulations. Thanks to cooperation with a number of financial sector specialists, within Nextrope we are able to facilitate the whole process from A to Z. Although many non-European crypto paradises claim that their public institutions support the opening of bank accounts by the tycoons of the crypto market, in reality, the process is often more complicated than in EU countries.
Below is a comparison of jurisdictions popular among crypto entrepreneurs:
If you are interested in the possibility of tokenization of your business or would like to learn more, the Nextrope team is at your disposal.
As of now, we would like to wish you happy holidays and thank all of you for being with us in the unprecedented 2020. We did not expect that our newsletter would be such a great success and we would gain such a huge readership in just a few months. It is a great accomplishment but also a considerable commitment and responsibility. Thus, we would like to assure you that next year we will do our best to keep delivering the content of the highest quality while ensuring that the information presented would potentially also be knowledge applicable for implementation in your business. Please stay safe and healthy and see you in January.