Registration of a company in Singapore for an ICO is by no means as risky as some other “experts” are trying to demonstrate. The project may well be successful even taking into account the fact that cryptocurrencies have massively subsided and issuing companies are suffering losses as a result. The situation with the latter is not as obvious as the victims themselves try to picture. If a company is registered for an ICO in the wrong jurisdiction and the bank to open an account was selected on a random basis, it is hardly surprising that the project failed.
In fact, the cryptocurrency market (and the business with cryptocurrencies as well) is an extremely promising area that gained momentum back in 2017. At that time, experts observed more and more cases of attracting investments for ICO, cryptocurrency companies were growing like mushrooms after the rain, and each project seemed to be profitable and promising. However, market fluctuations coupled with a lack of strategy for further action have taken their toll. Cryptocurrencies were declared a dead-end branch of development and projects were closing one after another, and banks that used to welcome the opening of corporate accounts for companies and startups took to turning down the aspiring cryptocurrency businessmen.
We tried to single out some objective reasons why the company’s registration for ICO followed by opening a corporate bank account may fail rather than lead to further development of the project:
- Errors at the preplanning stage
- Wrong choice of the jurisdiction where you incorporate a company with a view to ICO or open an account with a bank. It is extremely rare that laws change for the worse (and this is a fact!), but such a situation is an exception to the rules.
- Excessive pressure on BTC and ETH cryptocurrencies (as the main and most popular tokens) and withdrawal of fiat assets
- Explosive growth in the number of fake projects (cryptocurrencies are exposed to the risk of fraud no less than fiat assets)
- Companies working with cryptocurrencies get more frequent refusals from banks when they intend to open a corporate account
- The global financial crisis, the COVID-19 pandemic, and the deterioration of the situation in Ukraine. The last point, as we see it, is from the evil one. Personal miscalculations in the cryptocurrency project implementation can be explained by anything, including the “wrong” phases of the moon. This is the easiest thing to do to relieve your tension, but we will not resort to it as we are in for success.
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on which jurisdiction is best for
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on which jurisdiction is best for your business, preferred tax regime, company structure.
Points to Consider for Successful Cryptocurrency Business and Company/Startup Registration for the ICO
We cannot reasonably guarantee the success of any ICO project even if the company is incorporated in Singapore and the account is opened with a carefully selected bank in a third-party jurisdiction. The truth is that any undertaking, especially cryptocurrency business, is always a risk. However, the probability of reaching the desired goals will definitely increase if we carefully make all the calculations for the project, take into account all the pitfalls and, last but not least, elaborate a clear action plan.
Our experts suggest that you consider the following points to help you do your best for a successful ICO in the current circumstances:
- Identify and record the unique features of the cryptocurrency project
- Carefully study its economic component
- Calculate the issuance of cryptocurrencies taking into account the legal requirements of a particular country
- Develop a suitable corporate structure, but do so before (!) registering a company in Singapore and opening a corporate account for it
- Try to combine the ICO procedure and the search for funding sources
- Test the corporate/banking infrastructure of the cryptocurrency project in the “playground” BEFORE (!) launching the ICO
It is really hard to cope with all these tasks on your own, so we do recommend addressing the Offshore Pro Group specialists for help before things get too complicated. We can truly say that company incorporation in Singapore is something you cannot do on your own. As for the bank account, the mission is not absolutely impossible but rather hard to accomplish.
The fact is that the success of a cryptocurrency project is based on technological and structural factors.
The first one is clear. Working out the project, building an attractive investment model, searching for partners, calculating investments and payback periods, analyzing the cryptocurrency market – all this has to be done, but you will manage it on your own. We are always ready to help our customers, but the cobbler should stick to his last. Cryptocurrencies and business with them and the registration of companies to launch an ICO are not the same things.
The second factor of the project’s success is just as (or even more!) important as the first one, and it includes registration of a cryptocurrency company for the ICO, opening a corporate account with a bank, choosing a suitable jurisdiction for these tasks, accounting, and taxation matters. All these items are directly related to the business which is, in fact, the framework of the cryptocurrency project, and that’s where we can help you! Note that working solutions should be customized and an ICO project that relies on standard solutions is highly likely to fail.
Choosing a Country of Incorporation for the ICO
The jurisdiction of incorporation is the most important factor that determines the success of an ICO-based cryptocurrency project (the choice of a bank is just as important, though). The significance of this step is often underestimated, and jurisdiction for a company and a corporate account is selected at random. The projects that held the ICO in early 2017 were in no hurry and left this issue to be resolved at least until the end of pre-ICO, to the date when the project got its first money. There were also those who were not at all puzzled by the creation of a company for the ICO and believed that this is not required in a non-regulated market.
However, it became clear quite quickly that the cryptocurrency business will be regulated by even tougher laws than the world of traditional financial services. As a result, the ICO projects where the jurisdiction was chosen as luck would have it were struggling to survive or even disappeared from the cryptocurrency horizon. We would like to emphasize that there is no talk about lame ducks here: those were promising, potentially profitable and interesting projects. If such prospects are not what you are looking for (which would be extremely strange), the choice of jurisdiction to incorporate your company for further ICO and open an account for the project (and these may be two different countries!) should be made with utmost care.
We offer Singapore to our clients who want to incorporate a company and further launch an ICO as the jurisdiction offers the best conditions according to several criteria:
- Ease of doing business (and we mean any business, not just cryptocurrency projects!)
- Maximum degree of economic freedom
- Favorable legislation
- The possibility of further cryptocurrency project development after the ICO
We have developed two basic options for company incorporation in Singapore and opening a bank account for it with a view to subsequently launching an ICO and further development of the cryptocurrency project. It should be noted that these are basic schemes which can be adjusted to a specific situation and market conditions.
Option No 1. Company Registration in Singapore – Token Issuer
This is the most affordable offer which is naturally selected if the ICO project is underfunded. In no case does it mean that you are offered a “second class” product – in fact, quite the opposite is true. The incorporation of a company in Singapore for the subsequent ICO is a very promising proposal with the only “disadvantage” of relatively modest costs. Such an ICO project is the best choice when the overall balance of characteristics is a priority rather than some individual features.
- High overall attractiveness for investors due to the company incorporation in Singapore (which is a jurisdiction with an extremely high reputation)
- Cryptocurrencies are growing in price, so the business that relies on them is becoming more promising.
- Cryptocurrency issuance via ICO is not subject to possible MAS/SEC restrictions. Consequently, the ICO makes it possible to offer tokens to US and Singapore residents.
- Registration of a company for the ICO in Singapore removes many restrictions and widens the choice (not every bank agrees to cooperate with an ICO company, so opening a corporate account may be a bit of a challenge).
- If you open an account with a bank outside Singapore, the project will receive additional tax efficiency.
- A Singapore company (especially if you have an account with the “right” bank) will easily get accreditation on any cryptocurrency exchange.
- The actual management of the ICO project and all financial flows (both fiat and cryptocurrency assets) is concentrated in the founders’ hands.
- A company that has been incorporated in Singapore and has become its tax resident will get access to numerous tax benefits and privileges. Consequently, the ICO project in Singapore will reduce the tax base on perfectly legal grounds if you take care to open an account under the “right” jurisdiction with the “right” bank.
- A Singapore-based company can take advantage of attractive tax conditions, namely the absence of tax at the source of dividend payment and capital gains (which enables you to register subsidiary operating companies). Also, it should be kept in mind that a company in Singapore (which will become the core of a cryptocurrency project under the ICO) enjoys all the benefits of a one-tier taxation system which means that the tax is payable by the recipient of dividends.
Here are detailed costs of company incorporation in Singapore as the issuer of tokens that intends to launch an ICO (the total amount starts from EUR 21,890, * – the service duration is 1 year, and annual renewal is required):
- Registration of a Private Company Limited by Shares for the ICO in Singapore – EUR 590
- The registered office in Singapore for the ICO company* – EUR 430
- Local secretary in Singapore for the ICO company* – EUR 590
- Local director in Singapore for the ICO company* – EUR 2,180
- Opening a corporate account in two banks outside Singapore – EUR 6,000
- Accreditation on three cryptocurrency exchanges, testing of fiat I/O channels – EUR 7,500
- Security deposit for ICO company maintenance in Singapore – EUR 4,600
Option No. 2. Registration of a Company in Singapore as an Agent for Offering Tokens that Transfer Rights
The structure consists of two companies – an issuing company (which is not just a Singapore-based one but rather a company from any jurisdiction, including the home jurisdiction of the project founders) and a company in Singapore that will act as an agent for the issuance of cryptocurrencies. Such a solution is essentially the gold standard for any cryptocurrency project related to ICO and token issuance. Your costs will be slightly higher (registration of another company and opening a second corporate account with the bank), but they will pay off completely in the short term.
- Increased attractiveness of the ICO project for investors (at least thanks to an agent from a respectable jurisdiction)
- The issuance of cryptocurrencies is not subject to MAS/SEC restrictions on the issuance prospectus registration (the issuing company is not a resident of Singapore or the United States).
- We can also open a corporate account for an agent company in a Singapore bank upon the client’s request.
- Taxes in Singapore are payable on agency fees (therefore, they will be minimal).
- Singapore companies are easily accredited on cryptocurrency exchanges.
- The issuer receives only fiat money in the amount required to finance the project, which reduces the risks associated with the issuer’s bank.
- You have full control over both corporate accounts, so the financial flows (cryptocurrency and fiat) are concentrated in your hands.
- There is no tax at the source of dividend payment.
- There is no capital gains tax.
- Single-tier taxation system for the recipient of dividends.
Here are the costs of the token offering agent company establishment in Singapore (the total amount starts from EUR 29,700, * – the service period is 1 year, with annual renewal required):
- Registration of a company limited by shares in Singapore – EUR 590
- Legal address of the company in Singapore* – EUR 880
- Local company secretary in Singapore* – EUR 590
- Local company director in Singapore* – EUR 2,180
- Local shareholder (Singapore resident)* – EUR 2,180
- Opening a current account with a bank in Singapore – EUR 6,000
- Opening an account with a bank outside Singapore – EUR 3,000
- Accreditation on three cryptocurrency exchanges, testing of fiat I/O channels – EUR 7,500
- Security deposit for company service in Singapore – EUR 6,780
- Initial deposit to the account in the Singapore bank – from EUR 3,000
Company Establishment in Singapore
All organizational issues are well described on the regulator’s official website. However, this does not mean that you can easily incorporate a company in Singapore with a view to the ICO and simultaneously (!) open a corporate account on your own. This task is often beyond the power of some intermediaries, so we strongly recommend learning from others’ mistakes and entrusting the business to professionals!
Minimum requirements for company registration in Singapore (ask our experts for details on each condition):
- Company name in Singapore. We recommend thinking of 2-3 backup options if the main one is rejected during registration.
- The amount of the company’s share capital in Singapore + the number of shares.
- Data on foreign directors, shareholders and beneficiaries (natural persons) of the Singapore company.
- KYC documentation. The minimum set is a copy of passports and a confirmed address for each director, shareholder and beneficiary.
- Payment of the invoice. There are different payment options, including cryptocurrency.
Additional information on the timelines for corporate infrastructure creation (company registration in Singapore) which enables the project to enter the ICO:
- The standard period for company incorporation is up to 5 business days.
- The incorporation process starts with the preparation of the company’s documents, including the original Certificate of Incorporation and the company’s seals (secretarial and main ones).
- The company is registered in Singapore and its details are received within 1 day.
- The standard term for opening a corporate account for an ICO company is up to 1 month.
- The procedure for opening a corporate account for a project/company with a view to the ICO can be started the day after the company has been incorporated.
- The account(s) will be registered on cryptocurrency exchanges within 5 business days from the date of company incorporation.
- User identification and I/O channel testing take from 3 weeks to 2 months.
Our popular services in Singapore:
- Company registration in Singapore + opening an account with a Hong Kong bank.
- Remote opening of a corporate account with a bank in Singapore.
- Open an Account for a Singapore Company with the Curacao Bank.
- Open a Trust in Singapore with a Bank Account in Saint Lucia.
- Open a Corporate Bank Account in Singapore.
Annual Renewal of the Company’s Business in Singapore
Projects related to ICOs and cryptocurrencies are often categorized as “short-lived”. However, if the project is really promising and the ICO is only the first step, the business may well turn out to be “long-lasting”. In this case, the company in Singapore requires an annual extension.
Annual company maintenance in Singapore (it is provided not only to ICO companies, and some services are optional) – from EUR 4,600:
- Legal address of a cryptocurrency company in Singapore
- Local secretary of a cryptocurrency company in Singapore
- Local director of a cryptocurrency company in Singapore
- Local shareholder of a cryptocurrency company in Singapore
- Preparing and filing financial statements for a cryptocurrency company in Singapore
- Preparing and filing tax returns for a cryptocurrency company in Singapore
Thus, the company’s registration in Singapore for an Initial Coin Offering is an effective and promising project that can be practically implemented (rather than remain just a plan). You can always get more information from our experts (email@example.com) to proceed!
What basic information about the ICO in Singapore must be available in 2022?
First of all, the word “must” is not quite correct in this case. Legislation in this area is not yet established, so we recommend that you give attention to every project detail in the company of our experts. In general, we advise you to prepare the following specific information:
2) Schedule and scheme of coins sale
3) Current and planned restrictions
4) Provisions protecting the issuer’s rights (roughly speaking, a disclaimer)
5) The scheme of buying and receiving tokens
6) Guarantees from investors
7) Details and nuances disclosing the applicable commercial terms
We would like to remind you that official ICO documents are in fact the investor’s only protection in the event of litigation.
What types of tokens are officially allowed in Singapore?
The current legislation (which is constantly being amended) defines 4 types of tokens. We would like to emphasize that only one type is a digital currency, therefore it is not absolutely correct to call all tokens like that. They are:
1) Security tokens. They certify ownership and, in fact, are a digital (virtual) analog of traditional securities – shares, bonds, debentures, etc.
2) Digital currency. You can use it as a basis for exchange, any transactions, storage and accounting limits.
3) Secured tokens. They are secured by any real assets (securities, fiat money, gold, etc.).
4) Service tokens. These are designed to work with projects based on distributed registry technologies (blockchain).
What is the basis for the legal regulation of ICOs in Singapore in 2022?
The legal framework is being elaborated by MAS, and here is a brief outline of what was going on in this sphere:
At the start of 2014, officials announced that cryptocurrency was not subject to regulation if it could not be classified as a financial instrument. At the same time, special rules were introduced for intermediaries.
Two years later (August 2016), the agency seemed to “come to its senses” and introduced a set of regulatory rules, while offering all interested persons a special consultation document (which, however, is not mandatory).
Additional clarifications (including those relating to the ICO) were given a year later due to a large number of requests. At the same time, the agency “linked” digital tokens and measures to counter money laundering.
In November 2017, MAS finally (?) decided on how to regulate digital assets.
In December 2018, the ICO rules were also stated more or less clearly.
Opening a company in Singapore — fill out the form