Legal structure NFT project - 115M valuation

[anonwhale]

Good day!

Our team recently sold out several NFT projects and our 'imaginary holding' is now valued at 115M.

We have no corporate structure yet, the first sale was October 2020, sold out in minutes. We grew from a team of 3 people to 60+ and never had the time to even think about setting up anything legally.
Now is the time, and we want to do it right. Sold out several NFT projects after that.

Our team is from the EU, but we want the best possible structure to pay out our salaries, having the option of Venture Capitalists to invest and setup shares for some members of the team.
VAT can be a pain, because we didn't charge anyone VAT taxes over the NFT sales, I heard some NFT projects in the Netherlands ended up paying 21% VAT, which very much cuts into the net profits of the founders. We want to avoid this drama.

Does anyone have any tips how to set this up? We found a very trustworthy person in Singapore (relative) that can put it all under his name, acting like he's the owner, but he needs details/help how to set this up. Founders would simply sign a contract with him that we work for him and get paid a monthly salary + bonuses etc. Would something like this work? We are open to anything really, just want to get this done.

Thank you!!

 

[JohnnyDoe]

Good day!

Our team recently sold out several NFT projects and our 'imaginary holding' is now valued at 115M.

We have no corporate structure yet, the first sale was October 2020, sold out in minutes. We grew from a team of 3 people to 60+ and never had the time to even think about setting up anything legally.
Now is the time, and we want to do it right. Sold out several NFT projects after that.

Our team is from the EU, but we want the best possible structure to pay out our salaries, having the option of Venture Capitalists to invest and setup shares for some members of the team.
VAT can be a pain, because we didn't charge anyone VAT taxes over the NFT sales, I heard some NFT projects in the Netherlands ended up paying 21% VAT, which very much cuts into the net profits of the founders. We want to avoid this drama.

Does anyone have any tips how to set this up? We found a very trustworthy person in Singapore (relative) that can put it all under his name, acting like he's the owner, but he needs details/help how to set this up. Founders would simply sign a contract with him that we work for him and get paid a monthly salary + bonuses etc. Would something like this work? We are open to anything really, just want to get this done.

Thank you!!

Congrats!

I would suggest a couple of things:

1. Don’t think that what you did so far is not “right”. You need to carefully think whether it is necessary/advantageous to move from the “metaverse” into a legal structure.
2. Run away from the EU, irrespective of how you decide to continue your business.

Only after you have done the above you should think about a legal structure, which largely depends on whether you follow point 2.

 

[anonwhale]

Great tips, thanks!

Yes, we definitely don't want to do this in the EU. It will only be problems I feel and large taxes.

Do you know anyone who can help us further? Someone that we simply pay an hourly fee that has deep knowledge how to get this done?

 

[JohnnyDoe]

Yes, we definitely don't want to do this in the EU. It will only be problems I feel and large taxes.

I meant that you should physically move out of the EU.

Do you know anyone who can help us further? Someone that we simply pay an hourly fee that has deep knowledge how to get this done?

First you should arrange your personal residence.
I would be happy to help you for no fee in exchange for a piece of your business if I like it The professionals I use charge $400-1200 per hour and I can make introductions.

 

[wellington]

Have an existing BVI company not used that can be sold -transferred (2yrs-3yrs old). If interested.

 

[Martin Everson]

We have no corporate structure yet, the first sale was October 2020, sold out in minutes.

Clients did excellent due diligence I guess. Were investors aware of this at the time? Hope you never took investments from anyone in US.

Does anyone have any tips how to set this up?

Anyway get professional legal advice from a lawyer familiar with NFT's. See firms other NFT projects use already.

We found a very trustworthy person in Singapore (relative) that can put it all under his name, acting like he's the owner, but he needs details/help how to set this up.

Trustworthy but needs help setting it all up sounds like a disaster in making. I would avoid such a route.

Founders would simply sign a contract with him that we work for him and get paid a monthly salary + bonuses etc. Would something like this work?

No, not if he needs help setting it all up. Get someone with some understanding of NFT's and risks to themselves or company.

 

[Nomad POV]

There are three aspects you have to consider. First, direct corporate taxation (corporate income tax), second – VAT, third – taxation of individuals (salaries or any other payments).



Legal set up depends on many factors. Mainly, tax residency countries of beneficiaries, place of effective management of the company (as regards potential application of permanent establishment rule).



One of the possible alternatives: operation center in EU (company which is employer for staff, which run office and does most of the functions) and sales company in Dubai. So Dubai company is selling NFTs and paying to EU “service center” for services. It helps with VAT question (for NFT customers outside Gulf countries VAT is not applied, for customers in Gulf (if any)– 5%). Also you can pay to EU operation center only a part of the profits which is required to pay salaries, etc. and leave significant profit margin in Dubai (zero corporate income tax). Eventually ultimate beneficial owners might change tax residency to Dubai and receive dividends from Dubai company with 0% personal income tax.



On the other hand the real tax outcome of the above depends on how much substance you can create in Dubai. Tax authorities of concerned countries (where effective management is locate, where UBO reside) might apply such anti tax-avoidance rules as PE or CFC. Plus such structure is subject to transfer pricing regulations (basically remuneration of EU entity should correspond market price which eventually depends on functions of both companies).



There are other potential set ups as well.

 

[SoNewToAllShit]

Have an existing BVI company not used that can be sold -transferred (2yrs-3yrs old). If interested.

what's the cost?

 

[sergeylim88]

Can the original poster send me a private message, I have some questions for him.

 

[clemens]

You have assets for 115M but you have no structure....well well well

Anyway get professional legal advice from a lawyer familiar with NFT's. See firms other NFT projects use already.

 

[JohnnyDoe]

You have assets for 115M but you have no structure....well well well

The assets are “valued” 115m. We don’t know who and how performed this evaluation.

 

[clemens]

True, personally I would have guarded myself with a nice offshore setup before I started with this venture. I mean, someone that can do this must have money.

 

[Ashley94]

Good day!

Our team recently sold out several NFT projects and our 'imaginary holding' is now valued at 115M.

We have no corporate structure yet, the first sale was October 2020, sold out in minutes. We grew from a team of 3 people to 60+ and never had the time to even think about setting up anything legally.
Now is the time, and we want to do it right. Sold out several NFT projects after that.

Our team is from the EU, but we want the best possible structure to pay out our salaries, having the option of Venture Capitalists to invest and setup shares for some members of the team.
VAT can be a pain, because we didn't charge anyone VAT taxes over the NFT sales, I heard some NFT projects in the Netherlands ended up paying 21% VAT, which very much cuts into the net profits of the founders. We want to avoid this drama.

Does anyone have any tips how to set this up? We found a very trustworthy person in Singapore (relative) that can put it all under his name, acting like he's the owner, but he needs details/help how to set this up. Founders would simply sign a contract with him that we work for him and get paid a monthly salary + bonuses etc. Would something like this work? We are open to anything really, just want to get this done.

Thank you!!

Selling NFTs is fine to form an offshore company, but it’s required a license to register a company in Singapore or Cayman Islands. If u want to issue shares to your members, you must become the shareholders of this company, and all allotted shares must be recorded/registered. I think Singapore is a good option in your case, if the NFT projects are sold to Singapore companies/residents, it is subject to GST (VAT).

But, here are some problems that you (the owner) might face when you set up a company using another person’s name (likely a nominee):
+ That person will involve in all operational activities of the company, even the bank account, which is a big problem/risk to the company’s real owner. That person can appoint/grant power of attorney to the real owner to involve in the company operations as well, but there are some risks regarding the ownership.
+ In case that person acts as a nominee to set up a company only (defined as a nominee), and will not involve in any operational activities, I can say it’s difficult to open a bank account with this nominee structure.

 

[Peachs]

NFT now is a very good investment especially if promoted