5 Best Jurisdictions for Launching Your Perpetual Futures Platform

If you have been watching the crypto markets recently, you know the action isn’t just in spot trading anymore.

The real heat is in derivative; specifically, Perpetual Futures (or “Perps”). These financial instruments, which allow traders to hold leveraged positions without an expiry date, have exploded in volume, with decentralized protocols like GMX and Jupiter generating nearly a billion dollars in fees recently.

Perpetual futures now account for 68% of all Bitcoin trading volume in crypto markets. The average daily trading volume of perpetual futures on major exchanges ranges from $10 billion to $30 billion.

Many cryptocurrency exchanges operate in countries in EU and in offshore jurisdictions, so understanding the regulatory environment is essential.

For example, El Salvador has adopted cryptocurrencies at the national level and became the first country to classify Bitcoin as legal tender, while places like Georgia and Dubai are known for their progressive stance on crypto trading and derivatives.

But here is the billion-dollar rhetorical question: If you are building the next great perp exchange, where do you plant your flag?

Building a financial fortress on regulatory quicksand is a recipe for disaster. At LegalBison, we have seen the landscape shift dramatically. Jurisdictions like the UAE have risen from the ashes to become the new sanctuaries for digital assets.

Derivatives now represent roughly 75% of the overall crypto market, with more than 90% of that activity taking place offshore. Crypto trading, and specifically crypto futures trading, is a key driver for the growth of perpetual futures, highlighting the need for regulatory clarity.

When selecting a country or platform for launching a perps exchange, key factors such as liquidity, fees, leverage, contract types, security, regulatory compliance, and overall platform performance should be carefully considered.

We are going to walk you through the best countries to set up a perpetual futures company, balancing regulatory safety, tax efficiency, and operational speed.

Major exchanges like Binance, Bybit, and OKX account for nearly 70% of open contracts on BTC perpetual futures, underscoring the importance of choosing the right jurisdiction for your platform.

More on this: Perpetual Futures (Perps) Explained

Fast-track Your Perps Company Formation

While perpetual futures are a staple of the crypto market, they are legally classified as derivative financial instruments in most jurisdictions.

Because perps lack an expiry date and often involve high leverage, they are frequently categorized as Contracts for Difference (CFDs) or Securities. This means that a standard “Crypto License” (VASP) may not be enough; depending on your platform’s structure and target audience, you may require a Forex License or an Investment Dealer License to operate legally.

Unsure if your platform falls under crypto or financial instrument regulations? Explore our Forex License solutions to ensure full compliance.

The “Efficient” Jurisdictions: Speed and Tax Neutrality

Sometimes, you need to move fast and keep overheads low. These jurisdictions offer a balance of regulation and operational freedom.

The absence or reduction of capital gains tax in these countries is a major draw for crypto investors seeking tax efficiency.

1. British Virgin Islands (BVI): The VASP Act and Crypto Derivatives

The BVI has long been a favorite for offshore hedge funds, and with the Virtual Assets Service Providers (VASP) Act 2022, it has modernized for crypto.

Why we like it: The BVI defines “virtual asset services” clearly. If you are operating a centralized exchange or a custodial wallet for perp trading, you need to register.

However, there is a crucial nuance: if your entity is solely issuing a token (like a governance token for a DAO), it might not require VASP registration, unlike in the Cayman Islands.

• Benefits: Tax neutrality (no capital gains or corporate tax), including no capital gains tax on cryptocurrencies just like the Cayman Islands, making it highly attractive for crypto businesses and investors. English common law stability, and a massive ecosystem of crypto-savvy lawyers and service providers.
• The Catch: You must appoint an authorized representative and an auditor approved by the Commission. You cannot just open a shell company and disappear; there is real oversight.

Note that if your perp platform is deemed to be dealing in ‘Investment Business’ under the SIBA Act, you may need a specialized Investment Business license in addition to VASP registration.

2. Panama: The Flexible Gateway for Crypto Businesses

Panama is the “wildcard” that is rapidly maturing. As of 2026, it does not have a specific “crypto license” in the traditional sense, but requires registration as a Specialized Financial Institution (SFI) and strict adherence to AML laws.

Why we like it: Speed. You can set up a structure in 4 to 6 weeks. Panama operates on a territorial tax system, meaning income generated outside of Panama (i.e., your global user base trading perps) is generally taxed at 0%.

• Regulation: It is not the “Wild West.” You must comply with the Financial Analysis Unit (UAF) regarding AML/KYC. Panama’s evolving legal framework is increasingly supportive of cryptocurrency transactions, provided compliance with AML/KYC requirements is maintained. However, the barrier to entry is significantly lower than in Liechtenstein or Singapore.
• Currency: The economy is dollarized, which simplifies accounting and reduces currency risk.

While Panama is crypto-friendly, platforms offering leveraged derivatives should evaluate if they fall under the scope of ‘Specialized Financial Institutions’.

Also read: Best Countries to Establish a Crypto Proprietary Trading Company

The “Gold Standard” Jurisdictions: High Reputation, High Clarity

If your goal is institutional trust and banking access, you need a jurisdiction that treats crypto assets with the same legal weight as traditional finance. These countries are not the cheapest, but they are the most secure.

Switzerland stands out because it does not impose capital gains tax on cryptocurrencies, making it highly attractive for investors. Germany is notable for its regulations that allow businesses to issue crypto shares, supporting innovation in digital securities.

They are especially attractive due to strong government support for crypto businesses and blockchain projects, which helps foster innovation and compliance. In these jurisdictions, perpetual futures can also be applied to equities, including tokenized stocks, expanding trading opportunities and integrating with regulated markets.

These countries also provide a secure environment for crypto investors through clear legal frameworks and active encouragement of blockchain projects.

3. United Arab Emirates (UAE): The New World Leader

The UAE has taken the top spot for crypto-friendliness. With regulators like VARA (Virtual Assets Regulatory Authority) in Dubai and the ADGM (Abu Dhabi Global Market), the UAE offers bespoke rulebooks for virtual assets.

The UAE is widely recognized as one of the most prominent crypto friendly countries, thanks to its supportive legal framework and progressive approach to digital assets.

Why we like it: The ecosystem is built for volume. The UAE has zero personal income tax and allows for 100% foreign ownership in free zones. For a perps company, this means you can attract top global talent who want to keep their earnings, while operating in a timezone that bridges Asia and Europe.

The UAE’s regulatory and tax environment also makes it an attractive destination for investment and investing in crypto businesses and futures.

4. Liechtenstein: The Token Container Model

Liechtenstein is not just a tiny principality; it is a regulatory giant. Since January 2020, the Token and Trustworthy Technology Service Provider Act (TVTG), often called the Blockchain Act, has provided one of the world’s most comprehensive frameworks.

Why we like it: Liechtenstein uses a concept called the “Token Container Model.” Imagine a digital box (the token) that can hold anything from Bitcoin to gold rights or software patents.

This legal definition is technologically neutral, meaning it doesn’t matter if you are running a centralized order book or a DeFi Automated Market Maker (AMM); the law focuses on the service provided.

Liechtenstein’s regulatory clarity has attracted numerous blockchain projects and supports the growth of compliant crypto businesses.

• The Setup: You must register as a TT Service Provider. For a perp exchange, you would likely fall under the definitions requiring registration with the Financial Market Authority (FMA).
• The Cost: Capital requirements vary. Token issuers need between 50,000 and 250,000 CHF, while exchange service providers need roughly 30,000 to 100,000 CHF.
• Tax: Corporate income tax is a flat 12.5%, which is reasonable for Europe, and VAT is a low 7.7%.

It is rigorous, requiring local directors and physical offices, but a license here is a badge of honor globally.

5. Singapore: The Calibrated Choice

Singapore is a heavyweight, but we need to be honest about its stance on retail speculation.

Why we like it (with caveats): Singapore’s Monetary Authority (MAS) employs a “calibrated approach”. They are highly supportive of blockchain technology and recognize blockchain projects as legitimate, fostering a pro-crypto legal framework.

Singapore does not impose a capital gains tax on cryptocurrencies, which is especially favorable for institutional investors. They differentiate between “payment tokens” (like Bitcoin) and securities.

If your perpetual futures product targets institutional investors, Singapore is fantastic. However, for retail-facing apps, it is tough.

The MAS discourages retail participation in cryptocurrencies due to volatility and lack of intrinsic value. They have restricted marketing and advertising for retail crypto products.

Furthermore, unless you are on an Approved Exchange, your derivatives might be unregulated, which sounds good until you try to get a bank account. Singapore is strictly for the serious, well-capitalized players who want to serve accredited investors.

Free: Consult with LegalBison Crypto Experts

Setting Up a Platform: From Incorporation to Go-Live

Launching a perpetual futures trading platform is a multi-stage process that demands careful planning, regulatory awareness, and technical expertise. Here’s how to take your idea from incorporation to a live, thriving exchange in the crypto industry.

1. Incorporation and Regulatory Approval

The journey begins with choosing the right jurisdiction and incorporating your company. This step is critical, as your legal entity must align with the requirements of local regulators whether that’s the Commodity Futures Trading Commission (CFTC) in the U.S. or a crypto-friendly authority in the Cayman Islands or Dubai.

Securing the appropriate crypto license type for futures trading and perpetual futures contracts is essential to ensure compliance and build trust with both retail and institutional investors.

2. Building the Trading Infrastructure

Next, you’ll need to develop a robust trading infrastructure capable of supporting high-frequency trading, perpetual swaps, and a wide range of crypto assets.

Unlike traditional futures, perpetual futures contracts have no expiration date and rely on a funding rate mechanism to keep prices in line with the underlying asset’s spot market. Your platform must be engineered to handle extreme volatility, manage liquidation risks, and provide real-time data on price movements and funding rates.

3. Compliance and Security

Regulatory compliance is non-negotiable. Implement comprehensive anti-money laundering (AML) and know-your-customer (KYC) protocols to protect your platform and its users.

Security should be at the forefront; deploy advanced measures to safeguard user funds and prevent unauthorized access, especially given the high leverage and rapid price swings common in derivatives markets.

4. Liquidity and Partnerships

To attract active traders and ensure greater liquidity, establish partnerships with major financial institutions, liquidity providers, and other crypto exchanges.

Listing a diverse array of perpetual futures contracts and perpetual swaps will help your platform stand out and offer traders more opportunities to speculate on various crypto assets.

5. User Experience and Education

Retail investors are drawn to platforms that are intuitive and transparent. Offer a user-friendly interface, clear explanations of leverage options (which can vary depending on market conditions), and educational resources that demystify the risks and rewards of trading perpetual futures.

Help users understand how funding rates work, the implications of high volatility, and how to manage their existing positions to avoid unnecessary liquidation.

6. Tax Considerations and Guidance

Tax treatment of perpetual futures trading can be complex and varies by jurisdiction. Provide guidance and resources to help your users understand capital gains tax obligations and the benefits of operating in crypto-friendly countries.

This transparency will help your platform attract global crypto investors seeking both compliance and efficiency.

7. Ongoing Market Monitoring and Adaptation

The crypto market is dynamic, with funding rates, leverage limits, and market structure shifting rapidly. Continuously monitor market conditions, adjust your risk management strategies, and update your platform’s features to stay ahead of regulatory changes and trader needs.

Proactive management of funding rates and liquidation protocols will help maintain market integrity and user trust.

Launching a perpetual futures platform requires more than just a high-speed matching engine; it demands a regulatory fortress. With the derivatives market commanding trillions in monthly volume, the difference between a protocol that dominates and one that faces enforcement is often its jurisdictional foundation.

Whether you require the institutional prestige of Liechtenstein’s Token Container Model or the tax efficiency and speed of Panama, the wrong choice can act as a brake on your liquidity.

At LegalBison, we do not just file paperwork as in the crypto license only; we engineer the compliant infrastructure you need to secure banking access, mitigate complex AML risks, and capture the institutional flows defining the market.

Navigating the Mechanics: Why Jurisdiction Impacts Product Design

You might be wondering, “Why does the regulator care if I run a Perpetual Demand Lending Pool (PDLP) or a standard order book?”

Here is the reality: The mechanics of perps are inherently risky and are deeply influenced by the structure of derivatives markets and their relationship to spot markets.

Perpetual contracts are not limited to cryptocurrencies; they can also be used for commodities and equities, expanding the scope of perp trades beyond just digital assets.

In a PDLP model (used by GMX or Jupiter), liquidity providers (LPs) deposit assets to facilitate trades. Perpetual futures are among the most liquid instruments in the crypto space, enabling high-leverage trading and attracting active traders.

Leverage allows traders to control larger positions, increasing both potential profits and risks. If the market moves violently, LPs can suffer “losses-versus-rebalancing” (LVR).

Regulators in top-tier jurisdictions like Bermuda or Liechtenstein understand these nuances. They have frameworks that differentiate between a custodian holding funds and a smart contract executing a swap.

The mechanism called the funding rate is used in perpetual futures to keep prices aligned with the spot market by incentivizing traders to take offsetting positions. The funding rate is typically calculated and applied every eight hours on most exchanges, but this can vary by platform.

Traders often take the opposite side of trades to maintain market balance, which is crucial for the funding rate mechanism and overall liquidity stability.

In the BVI, the VASP Act specifically includes “safekeeping or administration” of virtual assets. If your protocol is non-custodial (users keep their keys), you might have a lighter regulatory footprint compared to a centralized exchange holding user funds.

Perpetual futures are settled in cash, meaning no physical delivery of the underlying asset is required. Perpetual contracts can be used to hedge an existing position in the underlying asset by taking an opposite trade, helping manage risk and protect against price fluctuations.

Because trading futures with leverage can amplify both profit and loss, the risk of liquidation is increased. Traders speculate on price movements using perp trades, often without owning the underlying asset.

The unique structure of perp trades, including their funding mechanisms, contributes to market stability and creates arbitrage opportunities.

The size of the perps account market and the prevalence of trading futures make regulatory clarity essential for platform operators.

Also check: Understanding the Difference Between DeFi, CeFi, and TradFi

Conclusion: Making the Strategic Move

Choosing a jurisdiction is not just about checking a box; it is about defining your business model.

Are you building a decentralized protocol where users keep custody?

Or a centralized powerhouse with high-speed matching engines?

1. For tax efficiency and speed: Panama or the BVI remain the top contenders for agile startups. Puerto Rico also offers low tax rates for crypto investors, but this benefit is limited to permanent residents.
2. For the total package: The UAE is currently the world heavyweight champion for crypto-friendliness.

The evolving crypto space requires businesses to adapt to changing regulations and market conditions. It is crucial to choose jurisdictions that foster the growth of compliant crypto businesses, ensuring both legitimacy and long-term success.

At LegalBison, we know that the best country for perps is the one that aligns with your specific roadmap. Don’t build your castle on sand. Choose a jurisdiction that offers the legal certainty your investors demand and the flexibility your developers need.

Book a Free Consultation to Obtain Your Crypto License

FAQ

Can I operate a Perpetual Futures company without a license if it is fully decentralized (DeFi)?

It is becoming increasingly difficult. While some jurisdictions differentiate between software developers and financial intermediaries, global standards are tightening. For instance, the BVI VASP Act excludes software developers only if they don’t engage in the business of facilitating transactions for others.

However, as the UAE and FATF guidelines evolve, even DeFi interfaces and governance token issuers are coming under scrutiny. Operating without a legal wrapper is a high-risk strategy in 2026.

Why is the UK considered a bad jurisdiction for crypto derivatives?

The UK has explicitly banned the sale, marketing, and distribution of crypto-derivatives (like CFDs, options, and futures) to retail consumers.

The Financial Conduct Authority (FCA) believes retail traders cannot reliably value these assets and are at risk of sudden losses. If your target market includes everyday traders, the UK is legally off-limits.

What is the “Travel Rule” and how does it affect my perps exchange?

The Travel Rule is a global standard (FATF Recommendation 16) requiring Virtual Asset Service Providers (VASPs) to share originator and beneficiary information for transactions over a certain threshold (usually $1,000).

Whether you are in Liechtenstein, Singapore, or the UAE, you will likely need to implement technology to comply with this. It is a major operational challenge, involving interoperability between different VASP systems.

Can I use a Panama company to offer derivatives to Europeans?

This is risky. While Panama has a territorial tax system and allows offshore operations, offering services to EU citizens triggers EU regulations.

Under MiCA (Markets in Crypto-Assets), non-EU firms soliciting EU clients will face strict requirements. You cannot simply “reverse solicit” indefinitely. You need to check if your Panama entity is compliant with the laws of the customer’s location, not just Panama’s laws.

What is the difference between a Class T and Class F license in Bermuda?

Bermuda’s Digital Asset Business Act offers tiered licensing. A Class T (Test) license is for piloting a novel business model (like a new perp AMM) for a limited time to evaluate risks. A Class F (Full) license is for established businesses operating indefinitely.

This tiered system allows startups to enter the market with lower initial compliance burdens while they prove their technology works.