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Initial Coin Offering in BVI

Updated on Sunday 20th October 2019

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Initial-Coin-Offering-in-BVI.jpgAn ICO, or initial coin offering, is a manner of raising capital when a form of crypto-currency is sold as a “token”. The capital is raised from third parties and the company that holds the digital currency, which can be a BVI offshore company, organizes the ICO.
 
The British Virgin Islands has a favorable regime for doing business and flexible regulations for cryptocurrency and blockchain companies as well as ICOs. Companies may expect to be able to establish a successful launch in this offshore location.
 
In this article, our team of BVI company formation agents answers some of the most important questions about initial coin offerings organized in this jurisdiction. Investors who wish to know more about the relevant laws for cryptocurrency companies, as well as the regulations that apply in BVI, can reach out to our agents.
 

What are the main laws governing ICO launches in BVI?

 
The British Virgin Islands are already recognized as a top offshore location and investors are also using the BVI business company for the purpose of establishing the type of transaction that is an ICO. However, regardless of the overall flexibility of the regime, investors should be aware of the top laws that regulate the manner in which BVI companies can raise money through an initial coin offering:
 
  • - The Securities and Investment Business Act 2010: it regulates the investment business in BVI and stipulates that all those involved in such activities must hold a license from the Financial Services Commission
  • - The Financing and Money Services Act 2009: will only be relevant for investors who are interested in BVI company formation if, apart from digital tokens and cryptocurrencies that will also engage in currency exchange and other services.
  • - The Anti-Money Laundering and Terrorist Financing Code of Practice 2008: should be taken into consideration in order to include due diligence practice relevant to the cryptocurrencies field.
  • - The Electronic Transactions Act: this is relevant when an ICO is launched and conducted through an electronic platform. 
 
Please remember that these are not all of the laws that are relevant to structuring an ICO in BVI and that investors can reach out to our agents for more information. Some of these laws, such as the Anti-Money Laundering and Terrorist Financing Code and the Foreign Account Tax Compliance Act (FATCA) do no include express provisions for cryptocurrency businesses. nevertheless, investors who open a business in BVI and run it as per the local rules and regulations should be well aware of their provisions. 
 
While it is expected that BVI will introduce a legislation to address initial coin offerings and the digital assets filed in general, it has yet to take steps in this direction. One of our BVI company incorporation agents can provide interested investors with complete details about the regulations in force that may influence their activities.
 

Reasons to launch an ICO in BVI

 
The British Virgin Islands is a favorable location for an initial coin offering and some of these are the same as in the case of BVI company formation. We list these below:
  1. flexibility: the corporate flexibility for which BVI is well known is also an advantage for structuring an ICO.
  2. tax neutrality: BVI is one of the jurisdictions that impose no income tax, no corporate income tax, no capital gains tax; an advantage for the transactions in an ICO launch.
  3. quality transactions: ICO launches in BVI are handled in a professional manner and are fluent as the region enjoys the presence of specialized corporate services providers.
  4. low maintenance requirements: a company that is structured for an ICO launch will enjoy low maintenance costs and founders interested in BVI company set up will not pay a minimum capital upon incorporation. 
 
The British Virgin Islands are developing as a jurisdiction that is fit for an ICO launch. According to the Coin Shares H1 2018 Crypto Asset Report, the British Virgin Islands is the second-largest market by trading volume:
 
  • - the United States had a trading volume of 35.7 billion USD.
  • - the BVI had a trading volume of 16.2 billion USD.
  • - Luxembourg had the third-largest trade volume, at 11.6 billion USD.
  • - they were followed by Japan (8.6 billion USD).
 
Investors who wish to set up an ICO in BVI can contact our British Virgin Islands company formation specialists for more information about the steps and regulations. Entrepreneurs can also reach out to us for any questions regarding the incorporation of a cryptocurrency or blockchain business, including but not limited to a crypto exchange. 

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