Registering a company for ICO

ICO (Initial coin offering) is a form of investment attraction for startups, which consists of selling a predetermined number of units of issued cryptocurrency. The created tokens are offered to partners and sponsors at a symbolic price in order to accumulate enough funds for a marketing program and business development.

For investors, an ICO is a great way to purchase a new cryptocurrency at a reduced cost at the start of the sale. In the long run, these monetary non-fiat units can grow significantly in value, providing a profit to the owners. For example, Ethereum could initially be purchased for a few cents, but now its value exceeds 2500 USD. The campaign for the initial public offering of crypto coins is also called crowd-sale.

Registration of a separate company for ICO provides an opportunity to:

• organize the ICO in accordance with the laws of a particular state;
• legally convert the funds received from the sale of tokens and cash them into fiat currencies if necessary;
• work with cryptocurrency banks and exchanges, which have strict requirements for companies;
• increase investor confidence in the project through official activities in a prestigious jurisdiction.

Choosing a jurisdiction for registration

The key to the success of an ICO and the amount of funding received is the reliability of the company that offers tokens. Potential investors assess the risks and prospects for the development of a particular cryptocurrency, so it is important to take care of registration and other legal aspects of work in advance.

Since the issuance of tokens may be regulated by local legislation, you should choose a state with loyal conditions for crypto trading. It is also important to consider the current taxation system and the availability of preferential treatment for non-residents of the country.

Until recently, most states allowed to register a company for ICO without special conditions, but with the development of the cryptocurrency market, restrictions appeared. For example, China has completely banned ICO as a method of attracting investments. The US legislation allows to register such companies, but the sale of tokens falls into the category of securities and is subject to taxation.

The competent selection of the legal field for organizing the work of a legal entity plays a key role in the success of a crowd-sale. The most promising jurisdictions for ICOs:

• Singapore.
  The state is loyal to blockchain business, and local companies enjoy an excellent reputation on international cryptocurrency exchanges. Registration of a legal entity in Singapore will cost the founders less than 10 thousand USD. At the same time, the country’s legislation requires foreigners to have a real corporate address and at least one resident of the state among the shareholders.
• Switzerland (canton of Zug).
  The state has a so-called “crypto-valley” in a separate region, which offers favorable conditions for the registration and operation of companies in the field of cryptocurrencies. Firms operating in the Swiss jurisdiction enjoy an impeccable reputation in their field.
• Estonia.
  The state offers low tax rates for companies that work with crypto coins. The cost of registering a company for ICO is from 3000 EUR, so this jurisdiction is often chosen by startups with a small budget. At the same time, the procedure of opening a company is quite simple and fast.
• Australia.
  The state offers favorable tax conditions to foreign investors who plan to work in blockchain business. For the first two years, entrepreneurs are exempt from the need to obtain a license. Bitcoin and other non-fiat currencies are accepted as payment for a range of services in Fintech, stores and service establishments.

To select a particular jurisdiction, company owners should seek professional assistance from Altindustry’s practicing lawyers. Our specialists understand the nuances of company registration in foreign countries and will form an optimal proposal based on the current business project and the tasks set.

Stages of company registration for ICO

The specifics of opening a legal entity for the purpose of a subsequent ICO campaign depend on the legislation of the chosen country and the current regulation of cryptocurrency exchange in a particular legal field. The standard registration process consists of several stages:

1. Choosing a state with regard to tax planning, ease of operation and ease of registration.
2. Selection of legal entity form and collection of documents for registration of the firm in accordance with local requirements.
3. Submitting the application for opening a company to the responsible government agency online or in person.
4. Opening a bank account to store start-up capital and accept payments from clients and partners.
5. Organizing the work of the office at the real legal address in the state of registration, as well as staffing.
6. Obtaining a tax number and registering the firm on cryptocurrency exchanges.