Want to Launch a Token? Here are Some Popular Jurisdictions

Builders • Jul 2, 2024

Navigating the complexities of token issuance requires careful consideration, as there’s no single approach on how to issue tokens and benefits vary greatly across jurisdictions.

At CoinList, we have helped some of the best builders in the crypto ecosystem launch tokens. Below are some of the jurisdictions they have chosen and the criteria they’ve considered.

Popular Jurisdictions for Launching a Token

British Virgin Islands (BVI)

Regulatory regime: In early 2023, the Financial Services Commission (FSC) enacted the Virtual Assets Service Providers Act of 2022, which defines how digital value can be traded, among other things.
Taxation policies: There is 0% taxation for corporations, capital gains, and withholdings.
Availability of professional services: BVI’s crypto-friendly and technology-friendly environment has attracted a robust ecosystem of professionals, such as legal, financial, and consultancy services, which support strategic development of crypto businesses.
Other: Companies can be established in the BVI in several days upon completion of customer due diligence. An additional convenience is that businesses based in the BVI do not have to own bank accounts in the BVI.

Switzerland

Regulatory regime: The Swiss Financial Market Supervisory Authority (FINMA) provides clear regulatory guidelines for crypto businesses, and fosters innovation while maintaining compliance and investor protection. Although Switzerland is not a member of the EU, many Swiss crypto businesses have chosen to align with MiCA standards to facilitate cross-border operations and enhance collaboration with EU investors.
Taxation policies: The Swiss Federal Tax Administration (SFTA) has outlined clear rules regarding how various crypto-related activities are taxed. For instance, businesses may be able to deduct crypto losses to reduce their tax liability.
Availability of professional services: Switzerland is home to a highly-developed professional services sector, with global banking giants like UBS and Credit Suisse in Zurich and the Swiss Crypto Valley Association in Zug.
Other: Since 2016, Switzerland has promoted using crypto as a payment method.

Germany

Regulatory regime: The Markets in Crypto-Assets (MiCA) regulation governs all countries in the EU, providing legal clarity and harmonized rules for crypto businesses. By establishing a clear regulated environment, MiCA enhances consumer protection and encourages innovation. In addition to MiCA rules, crypto businesses in Germany may need to obtain written authorization from the Federal Financial Supervisory Authority (BaFin) to begin operations.
Taxation policies: Profits on cryptocurrency held for more than a year are tax exempt, but businesses must pay corporate income tax on crypto.
Availability of professional services: Due to its strategic location in the EU and well-established financial system, Germany offers robust and highly-developed professional services.
Other: Germany was the first country to adopt a blockchain strategy in 2019, aiming to leverage technology for digital transformation across industries. Additionally, the country’s Fund Location Act promotes crypto investments by allowing institutional investors to allocate up to 20% of their assets to crypto.

Other Notable Jurisdictions

Singapore, the United Arab Emirates (UAE), and the Cayman Islands are three other noteworthy jurisdictions and crypto hubs. While they aren’t as popular for token launches for a variety of reasons, they are quickly attracting non-token based crypto projects:

Singapore

Regulatory regime: The Monetary Authority of Singapore (MAS) oversees crypto activities through comprehensive regulations such as the Payment Services Act (PSA), which requires businesses to obtain appropriate licenses, ensure technology risk management, protect consumer interests, and implement robust AML measures.
Taxation policies: There is 0% capital gains tax on crypto.
Availability of professional services: Singapore has a well-established fintech hub, which has attracted crypto talent and investors from around the world. Its legal system is based on English common law, which provides foreign businesses with greater confidence in contract enforcement and dispute resolution.
Other: Singapore has a history of successful ICOs, including TenX, which witnessed a record $43 million tokens sold in less than 10 minutes in 2017.

United Arab Emirates (UAE)

Regulatory regime: In Dubai, the Virtual Asset Regulatory Authority (VARA) oversees crypto regulation; it established rules for Virtual Asset Service Providers (VASPs) in 2023 and maintains a structured regulatory framework that enhances transparency and investor confidence. In Abu Dhabi, the governing body responsible for regulating crypto is the Abu Dhabi Global Market (ADGM), which introduced the world’s first Distributed Ledger Technology (DLT) Foundations regime in 2023.
Taxation policies: There is 0% tax on personal income and capital gains.
Availability of professional services: Dubai and Abu Dhabi are burgeoning crypto hubs, providing access to emerging markets, and specialized firms offering legal, financial, and advisory services tailored to the needs of the crypto sector.

Cayman Islands

Regulatory regime: The Cayman Islands Monetary Authority (CIMA) provides a supportive framework for the development and operation of crypto businesses.
Taxation policies: There is 0% taxation on income, capital gains, and payroll for individuals and businesses.
Availability of professional services: Due to the Cayman Islands’ history as a leading international financial center — specifically Grand Cayman — it offers a range of specialized professional services, such as legal firms experienced in offshore financial regulations and financial consultants adept at structuring investment vehicle — all of which support the unique needs of crypto businesses operating in the jurisdiction.
Other: Businesses can incorporate in the Cayman Islands within 48 hours if they submit the required paperwork, and the annual fees of maintaining a business are cheaper than in many other similar jurisdictions.

Choosing the Right Jurisdiction for Your Crypto Project

Each of the above jurisdictions has its own unique advantages and challenges that builders should take into consideration before preparing to launch a token. By understanding the relevant financial systems and regulatory landscapes, builders can make informed decisions that align with their project’s goals.

Interested in launching a token? Contact us here.

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