US Resident - Need Advice for Starting NFT/Crypto Company Offshore

[lootlabs]

Hello everybody,
I am starting a company that will accept crypto currency as payment, as well as transfer crypto and NFTs to users. Functionally similar to a NFT market, but an entirely different business model.
When looking at payment processing solutions for this business like alfa pay, coingate and nowpayments, it seems that US companies are heavily restricted if not outright prohibited from using these platforms.

Is there an offshore corporate structure that would allow us to operate as a non-US entity with the key staff residing in the US? We do have one of our team members located in New Zealand.
Also, we would like to keep this as attractive as possible for venture investors.

A final note: We are not primarily concerned with minimizing our tax obligations, but I am interested to understand how different jurisdictions can potentially help with that.

Thanks in advanced!! Look forward to hearing from you all.

 

[Sols]

If you want VC/PE funding, the typical set up would be Delaware C corp holding company which owns the operating company. In your case, having the operating entity in US does not appear to be the ideal choice. Incorporating in New Zealand with the local person as director would be a convenient set up. The other members of the team can be consultants to the NZ company and hold C-suite positions without being directors. Just make sure there is nothing about NZ law that makes your business model not work as intended.

Depends on how onerous the payment processors are in weeding out US persons. The set up described above usually works for most processors, but check with your preferred ones if they would accept it.

 

[lootlabs]

If you want VC/PE funding, the typical set up would be Delaware C corp holding company which owns the operating company. In your case, having the operating entity in US does not appear to be the ideal choice. Incorporating in New Zealand with the local person as director would be a convenient set up. The other members of the team can be consultants to the NZ company and hold C-suite positions without being directors. Just make sure there is nothing about NZ law that makes your business model not work as intended.

Depends on how onerous the payment processors are in weeding out US persons. The set up described above usually works for most processors, but check with your preferred ones if they would accept it.

So what you are suggesting is the delaware c corp would be a parent company to the NZ company? That seems simple enough. Would it be worth it to look into offshore jurisdictions rather than NZ? Or is that more pain than it's worth?

Thank you for the info!

 

[Sols]

So what you are suggesting is the delaware c corp would be a parent company to the NZ company?

Correct.

Would it be worth it to look into offshore jurisdictions rather than NZ? Or is that more pain than it's worth?

Only worth it if you find NZ has laws that make your business unworkable.

 

[lootlabs]

Correct.


Only worth it if you find NZ has laws that make your business unworkable.

It seems like the laws in NZ aren't bad, but the UK is more favorable. My NZ team member has UK citizenship. Is operating a UK business remotely a viable option? what kind of costs are associated with this?

 

[menzu]

I would disagree, NFT are not as restricted as cryptos.

Stripe, Checkout and major card players in the US are comfortable working with your industry, even banking is relaxed on the matter.

 

[lootlabs]

I would disagree, NFT are not as restricted as cryptos.

Stripe, Checkout and major card players in the US are comfortable working with your industry, even banking is relaxed on the matter.

we plan to except and to send crypto to users (as well as NFTs)

 

[menzu]

So what's the issue with incorporating and operating from USA ? You have advantages : Banking, Payment, Raise money from VC if successful, and more.

 

[Sols]

It seems like the laws in NZ aren't bad, but the UK is more favorable. My NZ team member has UK citizenship. Is operating a UK business remotely a viable option? what kind of costs are associated with this?

You're introducing headaches around tax residence. Is the UK company tax resident in UK? Yes, unless treaty non-resident. But is it tax resident also in NZ (where the director lives)? Or US (where the ownership is)? Or a little bit of everything? Compare that to a NZ company of which it would be a lot harder to question the tax residence.

Costs are low in the UK. The company itself won't cost much. If you outsource accounting and paperwork to a local firm, you're looking at a few thousand GBP per year for a completely hands off experience.

In your case, I'd try to make US work before going with UK. And double check whether US really is off the menu.