Crypto Startup - Offshore Business Formation

[Carl]

Hi Everyone,

I am new to posting on here, but I have been lurching on this forum without an account for some time now. Tons of great information, but I can't seem to get an answer regarding what I am really looking for. I am looking to incorporate my crypto start-up, which will not need a bank account.

• The company is a platform (or tool-kit) that will never be responsible for, or hold, any user's funds
• Our fee's (revenue) will be collected in ETH
• Our employees will be paid in ETH
• The entire team is remote

Therefore, we do not believe that we need a bank account.

The two main reasons we are incorporating our business...

1. We can split up equity among the founders and future employees
2. Our NDA's and employment contracts will hold legal weight

Additionally, we would prefer a jurisdiction that lets us be hands off, I.e. no serious annual reporting (this is the main reason we are not incorporating in Delaware), as well as being fairly easy to understand. English is the preferred primary language.

My two questions:

1. What jurisdiction would you recommend based on the criteria above?
2. We assume that our employees will just file their income taxes on the ETH they exchanged for USD as "self-employed", is this the route you recommend?

Thank you so much everyone!

 

[Carl]

I also wanted to mention that I have taken a look at Panama, Belize, and the Cayman Islands. It seems like the Cayman Islands have the easiest jurisdiction to understand (I am not a law-guy at all), while coming off as more legitimate. We are willing to pay to make the process easy and understandable, without going overboard. We are targeting "not the cheapest, but not the most expensive).

 

[negon]

Register the company as a software develeoper company and make a websites matching this description so you won't have any difficulties to get a bank or EMI account for this company!

 

[Carl]

Register the company as a software develeoper company and make a websites matching this description so you won't have any difficulties to get a bank or EMI account for this company!

Hi auric, when you say this, you aren't referring to a different type of business in general right? This company will be a software development company, and the website will match this, but the process is no different than another IBC in an offshore country, right?

 

[JohnLocke]

the process is no different than another IBC in an offshore country, right?

That's true, it's the same way to setup the company no difference. Just the name and business description will indicate the activity of the company.

 

[Spinat]

Hi auric, when you say this, you aren't referring to a different type of business in general right? This company will be a software development company, and the website will match this, but the process is no different than another IBC in an offshore country, right?

Title says Crypto and you say software company ???

 

[maxmoney]

Hi auric, when you say this, you aren't referring to a different type of business in general right? This company will be a software development company, and the website will match this, but the process is no different than another IBC in an offshore country, right?

What's your business actually. Should it be simply software development and you want to reach out to different markets in Europe then you may want to setup a EU company. If it is the entire world and you just sell through Internet you can setup something in Belize.

Should want to setup a crypto company to handle 3rd party crypto funds I would look into a jurisdiction that provide cheap financial license and try to comply to these.

 

[Stefano3323]

It seems that you are looking to set up a classic software house that is related to the blockchain space more than cryptos.

Seychelles and Cayman are two jurisdictions I know handle a lot of these companies type. If everything happens via ETH you probably don't need a bank account.

Regarding the taxes for the employees it depends on the country where they live. If they are employed legally by the company they need to pay taxes on the amount set in the employment contract. If they act like freelancer they should send invoices to the company each time and they should pay taxes on that amount.

 

[NS Corp]

Hi Carl,

• We can split up equity among the founders and future employees

The equity sharing portion of this I understand. It's somewhat more difficult for you to value the shares if the funds your company generates are based on ETH. The price of the asset / income (ETH) fluctuates extensively which means it's hard to price the shares but it's doable.

Our NDA's and employment contracts will hold legal weight

They unfortunately will not. Using your own explanation, you state that the "employees" would be filing their taxes as "self-employed"! They are not employees, strictly speaking. The NDAs will need to be added into the contracts (freelance work contract) - make sure you adapt the NDAs for the jurisdiction in which the freelancers reside in. An NDA is a blanket term, but each jurisdiction has their own interpretation for a valid NDA which they are able to enforce.

None of the things I mentioned would be difficult to overcome, just food for thought.