The ICO market is evolving rapidly, offering startups an innovative way of fundraising. Entrepreneurs and companies from various sectors are looking at token sales to fund their projects. But before you jump right in and launch an ICO, it’s important to understand regulatory implications and make an informed decision. The jurisdiction you choose would impact the form your company takes, the taxes that apply and how complex or costly compliance would be.
Top ICO Regions of 2017
Around a fifth of the ICOs launched in 2017 were in the US. The US and the Russian Federation each accounted for around 10% of the total. Around 6-7% of the ICOs originated in Switzerland and Singapore, with Australia, Estonia, Gibraltar, Germany, Canada and France accounting for about 2-3%.
Top 5 Regions for ICOs
Going by the current regulatory, political and economic environment, here are the best regions to launch an ICO and the advantages they offer.
- Known for its economic and political stability
- Home to the Crypto Valley
- Government has taken initiatives to develop the blockchain ecosystem and encourages crypto startups
- Makes policy recommendations and organizes crypto and blockchain events
- High GDP per capita
- Stable government
- MAS (Monetary Authority of Singapore), which is the country’s financial regulatory authority, maintains neutral position towards cryptocurrencies
- MAS actively supports new developments in the fintech space and encourages innovation
- Actively encourages the creation of a digital economy
- First country to offer e-residency, whereby it’s possible to establish a company online and manage it remotely
- Open attitude towards blockchain technologies and the cryptocurrency space
- Absence of specific regulations or announcements by the country’s Financial Supervision Authority (FSA) vis-à-vis ICOs, although startups are required to register a prospectus with the FSA before launching a token sale
- Freedom from taxation
- Mature economy
- FCA (Financial Conduct Authority), which is the country’s financial regulatory body, has taken a neutral position to ICOs
- The FCA has stated that ICOs may be regulated as securities depending on certain parameters, like the rights of token holders
- Upcoming destination for ICOs
- Government actively attracts ICO startups
- GFSC (Gibraltar Financial Service Commission), the country’s financial regulatory body, makes a distinction between crypto coins that are classified as securities and those that are not, based on certain parameters
- Favorable business environment
- Tax haven
Other regions that are gaining popularity as ICO destinations are The Russian Federation, Lithuania, Sweden, Australia, Germany, Canada, Israel, Ukraine, France, Spain, Poland and Argentina.
While the popularity of ICOs and cryptocurrencies has soared, they’re still new kids on the block. Regulators have only just begun outlining the rules; and these will continue to evolve. So, the best jurisdictions for ICOs could change frequently and it’s important to seek professional advice before deciding where to register your startup.
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