Specialized Legal Consultation for Securing Offshore Crypto License

Offshore crypto licenses advantages

When joining the cryptocurrency industry or reinforcing your presence, it is only natural to seek the most advantageous and optimal set-up for your crypto venture.

The offshore crypto licenses advantages are significant, and the crypto industry continues to trust the offshore zone to provide relevant regulations, while the USA or the EU (with MiCA) are unrolling stricter regulations.

• Tax benefits, with low or zero corporate income and capital gains tax;
• Facilitate better relationships with banks and financial institutions, easing up the opening of a corporate bank account;
• Data privacy is typically enhanced in offshore jurisdictions, better data protection for the company and its clients. It also helps to protect assets from liability;
• Legally operate worldwide with international clients, run an international cryptocurrency business at the crossroad of financial transactions;
• Simpler legal framework, in comparison to the stricter regulations of major economies.

Comparison of popular offshore crypto licenses

The crypto sector is by definition directed toward the global market. But a cryptocurrency exchange business may wonder what is the most optimal choice among all the offshore limited liability company that permits to obtain a crypto license. Below is a table based on our experience working with crypto exchanges and cryptocurrency businesses in various offshore jurisdictions.

We encourage you to contact our team for a refined, personalized assessment of your project.

Costs and fees of an offshore cryptocurrency license

As underlined in the advantages of going for an offshore crypto license, lower costs and fees are a major attraction for the crypto market.

Reduced startup costs compared to similar procedures in stricter jurisdictions allow for a ease up entry into business. As the regulatory requirements are more connected to the real life of businesses, digital asset exchanges and other blockchain technology companies will therefore not see their overheads skyrocket due to gruesome requirements.

Most offshore jurisdictions ask for a licensing fee, sometimes an annual fee, which is a way for them to gain a financial benefit from the crypto market. These fees do not scale, making them significantly more affordable for growing digital asset exchanges, as they replace the need for taxation found in non-offshore regulatory environments. The application for an offshore crypto license usually requires the payment of government fees, which can vary by jurisdiction.

Typical process for an offshore VASP license

With the assistance of a legal partner such as LegalBison, the process takes from several weeks to a few months, from consultation to beginning your crypto operations.

• Prepare the required documents;
• Often requires a business plan;
• Often requires detailed policy for regulatory compliances (AML-KYC);
• Often requires appointing a compliance officer;
• Application to the regulatory authorities and payment of the applicable fees.

Some jurisdictions require audits and compliance reviews, financial statements and the likes. This can surprise some readers, used to think that offshore countries are very lenient on such obligations. It is however true that most of them have lighter requirements in that regard. Regular audits and compliance reviews are necessary to maintain the validity of the cryptocurrency license after obtaining it.

Crypto and blockchain offshore – licensing, registration and regulation

Registering an offshore cryptocurrency company could be your best business choice.

How is that? There are many good reasons to set your crypto legal entity in an offshore country: the taxation is notoriously low (often 0%) and the authorities are very permissive. This allows you to grow your project with a minimum of constraints.

Not all the countries displayed here are offering an offshore VASP license. Some of these countries are simply tolerating any form of business, as long as you do not engage in transactions with the residents of this country. This kind of set-up may flag you as untrustworthy because people will notice that nobody is monitoring what you are doing with their assets.

Also, in some of the best offshore jurisdictions for crypto, the legal compliance requirements are still lighter than more important regulatory environments. An offshore cryptocurrency license usually comes with more reasonable regulatory requirements and the licensing process is more straightforward, not just faster. The licensing process duration varies, typically taking from several weeks to a few months depending on the jurisdiction and application complexity. Key personnel, including compliance and technology officers, must be appointed to ensure adherence to regulatory standards.

Getting a license for digital asset businesses in offshore jurisdictions is often simpler than in traditional countries. You provide the authorities with a detailed business plan and with carefully prepared compliance documents and procedures (LegalBison can assist you with that) and you will be granted a successful crypto company registration.

Which crypto offshore license to choose for my company?

As for any financial service, many offshore jurisdictions are developing regulations that are clear and simple, in order to attract entrepreneurs. This is why the licenses provided there are often simpler to get than in North America, the European Union or Asia.

There are different types of crypto activities and licensing may differ: crypto broker license, crypto wallet license, crypto custody license, etc. The regulatory requirements may vary accordingly. A broker license facilitates buy and sell orders for clients in the cryptocurrency trading process.

A fantastic example is the “virtual asset services provider” license in the Cayman Islands. Interested in the many possibilities offered by the blockchain, the Cayman Islands have taken a regulatory stance that encourages innovative and ambitious projects, while providing them with a standardized and worldwide-recognized compliance rulebook.

Any kind of crypto business is possible in the Cayman Islands: blockchain trust, DAO, DeFi protocols, peer-to-peer crypto exchange, DApps, NFTs, etc. There are solid alternatives to the Cayman Islands: the BVI VASP permit, the SVG crypto license, and more. Depending on your business model, our experts will advise you on the best suitable offshore country to start up your crypto company.

Such a license would allow companies engaged in digital assets businesses to provide custody services, token issuance (with the required documentation by local laws), exchange operations and various crypto services.

However, experience shows that the best and cheapest offshore license for virtual asset service providers is no less than the Costa Rica crypto license. This offshore crypto license has everything one would expect to find: low price, fast set-up, no taxes, low requirements, business-friendly environment… No wonder why it is a favorite of LegalBison’s numerous clients, especially in the spheres of crypto gaming (along with a gaming license) and DeFi.

Managing an offshore company from anywhere in the world

One of the advantages of registering a crypto business offshore is that you don’t need to reside in the place of establishment.

Some jurisdictions like the Seychelles do not require any presence at all for your blockchain startup. Singapore and other bigger frameworks also allow you to work from your home country but with the condition of renting a local office and hiring personnel. The Singapore blockchain license asks for substance, and so do more classical offshore countries, such as the British Virgin Islands or Saint Vincent and Grenadines, or more Western ones such as the Gibraltar Financial Services Commission.

The process of registering a crypto company offshore is simple. Once you have been duly advised on your choice of jurisdiction, you only need to provide a set of documents and LegalBison will take care of your company formation. If the authorities require, or if you want to gain trust among your clients, a complete set of AML-KYC documents and procedures will be delivered for you to easily implement them into your business model. Obtaining an offshore license increases the trust and credibility of a business in the eyes of clients and investors.

This way, you are making sure that neither your company nor your clients will be at risk of wrongdoing.