Looking for the right Jurisdiction to Launch your ICO?

Lately, with the news of Binance choosing Malta as their jurisdiction of choice, everyone is asking, why Malta?  Let us however first look at what you would need to consider when choosing a jurisdiction for your ICO. When looking for the right jurisdiction to Launch your ICO you need to consider several factors. These are not only regulatory, but there are also Reputation, tax, language as well as workforce talent considerations.

Malta as your ICO Jurisdiction – Regulation

Malta is the first country in the world to introduce a clear regulatory framework around ICOs, tokens and cryptocurrencies. This will ensure that as a founder, you will be able to get certainty on the treatment of your token. Malta, as a jurisdiction, does not regulate Utility tokens. A Utility token does not give token holder any rights, nor obligations. So as long as your token is a Utility token, then you you are free to run an ICO through Malta.

A security token that is however not a security as per current legislation, will be subject to disclosure requirements. These disclosure requirements are a standard for serious ICOs. After all, you are giving rights, obligations to token holders. This would usually make your token more attractive then other ICOs, leading contributors to actually expect something in return. With this right, you naturally have more obligations. No genuine ICO wants it’s token holders to contribute without clearly knowing what they are contributing to. Choosing Malta as your ICO jurisdiction, will give comfort to your token buyers.

Plans are in place to set up a new regulator to overview such ICOs in Malta. This will ensure the elimination of Fraudulent ICOs. The objectives of such regulator is simply will be to promote Malta as a fair and transparent ICO jurisdiction.

Malta as your ICO Jurisdiction – Reputation

When selecting your ICO jurisdiction, you should not overlook your reputational risk. It does not say much of your ICO when you decide to launch from some remote offshore Jurisdiction. Malta, is ideal as a jurisdiction, as it is a European Union (EU) country. Also, banks and other institutions refuse to work with ICO companies located in offshore jurisdictions. This means that, even though you could have a very successful ICO, you might not be able to operate efficiently, which is what every ICO Participant would expect from you.

Malta as your ICO Jurisdiction – Incentives

Malta offers various incentives to attract Blockchain companies to Malta. These incentives could include:

  1. Capital contributions: They will match the capital you inject.
  2. Assistance with regards to staff salaries.
  3. Office space.
  4. Tax credits
Malta as your ICO Jurisdiction – Taxes

One element that you might overlook when selecting a Jurisdiction over another is the taxation. Taxation plays a big role in your ICO strategic planning. You need not only consider how the effect of taxation on your raise, but also how profits will be taxed. This is where Malta has a competitive advantage over all onshore jurisdictions. Malta’s very favourable tax system implies that you will not incur tax  on the money you raise from the ICO. Also Malta’s corporate taxation system could mean that you would end up paying as little as 5% tax.

Another consideration when choosing an ICO jurisdiction is the personal tax. Malta has a very favourable personal tax jurisdiction. New incentives introduced will mean that people in top positions, will pay 15% tax on their income. Malta will not tax any income earned outside of it’s Jurisdiction.

Malta as your ICO Jurisdiction – General Pro Crypto / Block chain Sentiment:

It is not often, that you hear a Country’s leader openly show his support and Admiration for Crypto. Malta’s Prime Minister, Joseph Muscat, has recently been very clear in his  said that cryptocurrency will become the “future money”. Prime minister  Muscat asked his audience: “Have any of you ever thought about what gives paper money its value when it’s ultimately just pieces of paper? It is because society attributes value to it. Now some people, who in my opinion are geniuses, are arguing that value can similarly be attributed to virtual currencies.”

With such a mentality, it is no wonder that Big Firms, like Binance, are moving their operations to Malta.

E&S Group are leaders in ICO Legal Services , Tokenomics and general Crytpo and blockchain advisory. Based out of Malta, we have advised on over 30 ICOs.

Contact us directly on +356 20103020 or by mail at [email protected] to find out more.