More and more entrepreneurs are taking the plunge and opening a blockchain company. What was a few years ago, an unheard-of technology, is making its transition towards widespread adoption, one node at a time.
Blockchain technology has begun to completely disrupt the way we do things. Banking, currency, transactions, real estate, logistics and shipping, and even education are embracing this technology to help them streamline operations. Blockchain has the power to disrupt almost every industry and sector, bringing with it a whole host of benefits including heightened security, a decrease in human error, automatic execution of tasks, and cost savings across the board.
Blockchain Services for Your Company
Fast Offshore provides a full portfolio of business services for those looking to establish a cryptocurrency company or offer blockchain services.
Regulatory Advice
In terms of regulatory matters, the approach to blockchain varies across jurisdictions. Some have regulated in favour of the industry creating a robust legal framework that supports the development of blockchain-based industry in the country. Ensuring you are compliant with a jurisdiction’s regulatory requirements is important in terms of any licensing you have, the standing of your company, and making sure you do not operate outside of the law. This is a topic which requires regulatory experience and hands-on local knowledge.
Company Incorporation
Company incorporation and knowing which jurisdiction to choose can be difficult with such a new and dynamic sector, so picking the one that supports your vision as well as offers great fiscal incentives is key. You need to consider the capital, incorporation costs and time frames, whether you need additional licensing, due diligence and KYC, directors and shareholders, privacy, and of course taxation and other financial matters. To get a full picture of what each jurisdiction offers and whether it is suitable for your needs, contact Fast Offshore.
Blockchain Strategy Advice
So, you have a great idea, but do you know how to implement it? Do you have years of blockchain experience to help you design a blockchain plan? Are you familiar with all the technical aspects of blockchain? Could you confidently set up and execute a comprehensive blockchain strategy?
To ensure your blockchain company is able to offer blockchain services efficiently and successfully, you need the help of a professional to create a strategy that is easy to implement and makes business sense.
AML & Compliance
The very nature of blockchain and cryptocurrency is that it offers various levels of anonymity and privacy. While this is great, it does present a challenge for anti-money laundering and compliance obligations. Such rules and requirements are not opt-in- rather staying compliant and mitigating risk are things that must be done to ensure blockchain services are offered legally. From customer onboarding to risk management, anti-fraud, and ensuring that funds are legitimate, each business requires a tailor-made approach. We will work to create a flexible and comprehensive solution that is tailored to your needs.
Looking For Block Chain Services? Contact Us!
Fast Offshore has over 23 years (and counting) of business experience including company incorporation, banking, payment providers, and more. In addition to this, we have been working with a number of cryptocurrency and blockchain entrepreneurs and startups over the last decade.
This has included working on setting up cryptocurrency exchanges and crypto gambling sites, to support innovative blockchain projects get off the ground. Based on our extensive experience in corporate matters and our interest in blockchain technology, we are perfectly positioned to help you open your blockchain company in a range of jurisdictions.
What is Blockchain and How Did it Start?
In layman’s terms, Blockchain is a distributed ledger that hosts a continuously growing list of transactions across every node, or computer on its network. The number of nodes can be infinite and each transaction is recorded across each node meaning it is impossible to edit, delete, or tamper with an entry once it has been made.
It started as the system that underpinned the cryptocurrency Bitcoin. Invented by Satoshi Nakamoto in 2008, it initially served as the public ledger that records every unit and transaction created and conducted with Bitcoin. Since then, its use cases have expanded and its design has sparked similar systems that have been adapted for use in other markets. This has huge implications for the banking sector, adding a new and previously unheard-of layer of security for financial institutions.
Benefits of Opening a Blockchain Company
So, what are the benefits of opening a blockchain company or offering blockchain services to your clients? There are a number of reasons why opening a blockchain or cryptocurrency company is a smart move. But what are the core benefits of the technology itself? This section will bring you the key benefits of blockchain in the hope that it will inspire you in your vision and strategy.
Decentralization
DecentralizationOne of the foundations of blockchain technology is the fact that it is decentralised. This means that a blockchain has no central control point and is distributed over each computer or node. Anyone with access to the blockchain can conduct transactions and once they’ve been made, they are instantly replicated across every node. Every bit of data that’s inputted and stored on the blockchain, is owned by everyone on the network. This is a huge shift away from conventional databases or ledgers and has wide-ranging benefits for those that use it.
In terms of financial applications, one of the benefits of decentralization is that transactions can be made directly from person to person, without the assistance of a third party or intermediary. This makes the process quicker and more efficient and comes with the benefit of not having to engage with, or pay banks. In industries such as shipping and logistics, it means that everyone in the chain can have oversight of the progress of a shipment. This way there is no need for phone calls, emails, or other software.
It also means that users don’t have to put their trust in a single central authority and there is no point of failure should one of the nodes crash. Even if one computer goes down, the blockchain will still function with no issue.
Immutability
Blockchain is completely immutable. This means that it cannot be tampered with, edited, changed, or have any blocks deleted once they have been added to the chain. Because of this feature, the blockchain is completely permanent, indelible, and unalterable. Each transaction is saved and can be viewed whenever, and by whoever has access to the chain. This is a huge benefit, especially when it comes to dealing with fraud, cybersecurity, and financial transactions.
Immutable transactions and records provide unparalleled levels of trust and integrity, even in sectors where perhaps this was not prevalent before. Businesses across the world lose billions and even trillions every year due to manipulated, replaced, or even falsified data. Asides from blockchain, there are very few reliable and efficient mechanisms in place that provide this level of surety.
Blockchain immutability works by assigning each entry or transaction with a cryptographic hash. By their very nature and design, these hashes cannot be changed or reversed. The hash contains an alphanumeric string which is generated by each block and each block contains the hash of the current block and the previous one. This means that the blocks are linked in a chain and cannot be reordered in any way.
Fraud detection
Another key benefit of blockchain technology is the fact that it can be incredibly valuable in the fight against fraud. Blockchain allows the sharing of information in real-time and updates the ledger accordingly. This means that fraud can be prevented at the outset while reducing costs and the time spent.
Blockchain can be very useful in preventing financial fraud. For example, it can simplify matters such as settlement times, currency exchange, and collateral requirements. Multi-staged processes that require human supervision and interaction can be fraught with opportunity for fraudulent activity. Blockchain can help in reducing and detecting such cases within the complex financial system.
It can also be useful in preventing identity fraud– an issue that has increased significantly since the widespread adoption of the internet. Storing a digital ID on the blockchain means that it cannot be tampered with in any way. Furthermore, an individual can keep identifying data in a permission-required framework where verification can be carried out immediately and transactions can be executed quickly.
Transparency
One of the most fascinating but also widely misunderstood benefits of blockchain technology is its transparency. Some people say that blockchain gives privacy, while others prefer to use the term transparent. To be clear, when you use a blockchain, the identity of the user is secure but you can still see the transactions or entries that were executed by their public address.
It is up to the individual or blockchain company that has granted permissions to that blockchain, to ascertain the identity of the individual as per AML and KYC requirements. Once this has been verified, the individual can partake in the blockchain without others knowing their identity.
This level of transparency has never existed in any financial system before. Being able to see every single transaction carried out by an entity while not knowing their identity, but knowing it’s been verified, adds a much-needed level of accountability. It creates a detailed ledger of every activity conducted within an institution’s operations but protects the personal information of those involved. The implications for this on sectors such as finance, trading and investments, shipping, and education are vast.
Cross-Border Payment
Traditionally, making cross-border payments can be a hassle. They take time, they cost money, and you have to grapple with fluctuating exchange rates and then wait for the payment to clear. Even with new kinds of digital payment providers, cross-border payments are still costly and time-consuming. For big businesses or those that make a lot of these payments, it can cause significant issues in operations.
Blockchain and cryptocurrency both provide a much faster and cost-efficient alternative to conventional cross-border payment methods. Some transfer costs for fiat currency can be as much as 20% and take up to a month, the blockchain can execute the same transfer for a fraction of that, in real-time.
Of course, another benefit of using blockchain for cross-border payments is that every payment is recorded on the blockchain and cannot be tampered with. In disputes or issues relating to the issuance of a payment, or the amount transferred, the blockchain provides a useful and completely secure record.
Smart Contract
Smart contracts are perhaps one of the most powerful applications of blockchain technology. These contracts are miniature computer programmes that record, define, and oversee every clause, provision, and part of an agreement. From facilitation to execution, the smart contract is both self-enforcing and self-executing. An entire contract with multiple steps can be executed automatically upon the completion of each chronological provision and its recording on the blockchain.
Take, for example, the purchase of a house. A house purchase smart contract would oversee each step including surveys, bids, offers, deposits, legal agreements, and signatures. After one step is complete, the smart contract moves onto the next and does not proceed until all predefined criteria and actions have been satisfied.
These tools provide a highly-efficient and secure way of managing a range of cycles including legal contracts, purchases and sales, wills, loans, job applications, education, and more. With no need to rely on humans to enact the next step, and eliminating human error, processes can be significantly streamlined.
Identity Management
Blockchain is already being used to transform the way online identities are managed. It offers an incredible level of security as well as privacy and transparency. Through the blockchain, an individual can be verified and then assigned a digital identity that can then be used for a variety of purposes. This means that all kinds of transactions can be carried out without having to expose their identity.
Additionally, the digital identity which is verified and stored can include all kinds of data such as birth certificate, biometric data, previous addresses, and qualifications. Through a permission-based network, the user can grant access to this identity to those that need it, without putting their security at risk.
Blockchain identity management can be used in a variety of ways from identity verification, to blockchain passports, and verifying transaction blocks before they are applied to the blockchain.
Crypto-Friendly Locations to Incorporate your Blockchain Business
Where you will incorporate your business depends on the nature of your blockchain services. If you want to operate in a highly-regulated sector, you need to evaluate the various licensing requirements on offer. If you are more flexible on this, you need to pay more attention to corporate benefits and obligations. In addition to this, you should also consider where your target market is located and whether the jurisdiction you want to operate in will allow you to work with them.
Here are some of our recommendations for jurisdictions to incorporate a cryptocurrency company in.
Curacao
The island nation of Curacao is famed for its welcoming approach to blockchain and cryptocurrency. In 2018, authorities issued their very first blockchain license and since then the industry has grown exponentially.
Benefits for cryptocurrency companies in Curacao include the ability to offer cryptocurrency gambling sites, short licensing and incorporation times, cost efficiency, minimal red tape, low tax rates, and no VAT.
There are also no additional taxes on Bitcoin or other cryptocurrencies meaning that revenue generated in this way is not subject to additional fiscal measures.
Costa Rica
The Costa Rican government are well known for their favourable approach to cryptocurrency. Under local law, you can even pay your staff in cryptocurrency as long as a certain amount is paid in fiat as well.
In terms of setting up a cryptocurrency business, Costa Rica is a great choice as the applicable framework is free from excessive bureaucracy. For crypto gaming, there is no gaming license required, rather the owner must just specify the nature of the business when incorporating the company. Furthermore, there is no tax payable on any revenue generated outside of Costa Rica and this includes both fiat currency and cryptocurrency such as Bitcoin.
British Virgin Islands
The government in BVI has chosen to take a relaxed approach to cryptocurrency and associated businesses. It has not created any regulatory framework for the sector, nor has it prohibited it.
In terms of operating a cryptocurrency exchange, if you plan to trade utility tokens for utility tokens, or fiat currency with stable coins, you do not need to be regulated. It is only in cases where a token has the characteristics of a security or investment that regulation could be required. BVI is also home to the second-largest cryptocurrency market in the world, after the USA. There is also no tax payable on any activities, cryptocurrency or otherwise, outside the BVI.
Gibraltar
Gibraltar is a leader in cryptocurrency regulation but crypto is not considered as legal tender within the jurisdiction. Crypto exchanges and crypto gambling companies are allowed to operate in a well-regulated yet flexible legal and corporate framework.
There are no capital gains or dividend taxes payable on cryptocurrencies such as Bitcoin and exchanges are only subject to a 10% corporate tax rate.
While it is no longer a part of the EU, Gibraltar has a solid reputation that gives good standing to any blockchain company or crypto services business operating from there.
Seychelles
Seychelles is a popular offshore jurisdiction that has historically been home to forex exchanges and brokers. Now, it has started to move into the cryptocurrency market, and crypto-to-fiat and crypto-to-crypto exchanges can be established there with little regulatory oversight.
There are no laws nor regulations forthcoming from the authorities, therefore the crypto exchange is expected to continue under a self-regulatory approach for the time being at least. There are also no taxes payable on crypto or Bitcoin revenue generated outside of Seychelles.
Cayman Islands
The Cayman Islands are another popular hub for various kinds of cryptocurrency businesses.
In May 2020, the government adopted a regulatory framework consisting of five cryptocurrency laws which require exchanges and other crypto service providers to apply for a license.
While there are obligations in place, the industry in the country remains fluid and accessible to those looking to set up an exchange or even launch their own currency.
They are a tax neutral jurisdiction meaning there is no tax payable on income, be it fiat or cryptocurrency.
Get in Touch with Us to Get Blockchain Services
The services that we offer are broad-reaching and complex and are tailored to the exact needs of every client. We treat each customer as an individual and conduct a thorough review of their needs, vision, plan, and ideas before proposing a jurisdiction and a package of solutions that will enable them to reach their goal. From banking to company incorporation and licensing, compliance to regulatory matters, and technical strategy assistance, Fast Offshore has got you covered.
The Potential for Blockchain Start-Ups: Limitless!
Blockchain services are fueling an increase in startups and the capital they have to build their businesses. In the EU, Asia, and the Middle East, blockchain is a priority and there are numerous initiatives to encourage blockchain start-ups and adoption into mature companies. Policymakers have actively legislated in support of the market and things are expected to expand over the coming years.
It is predicted that blockchain adoption will grow exponentially and we’ll see applications in all areas but mainly digital identity, compliance, finance, governance, and logistics.
Requirements When Opening a Blockchain Company
If you open a blockchain company, you will need to prepare yourself to meet a number of requirements. What these requirements are will depend on which jurisdiction you choose and what the nature of your business is. There are differing obligations for cryptocurrency exchanges when compared with a blockchain app for example.
The most basic requirements that will apply to any company, anywhere include Know Your Customer information such as your passport and ID, proof of address, and source of funds, a background check and details of your history and qualifications, and a full description of the nature of the business.
Cost of Opening a Blockchain Company
How much setting up a blockchain company will cost, depends a lot on the jurisdiction and sector you will operate in. It could be that you just have to pay for company incorporation costs. Alternatively, you could have to pay for a license that needs to be renewed periodically as well as compliance costs.
The cost of setting up a cryptocurrency exchange or crypto casino will be significantly different from a company offering blockchain solutions to SMEs.
To understand which is the best jurisdiction for you and whether there are other licenses or specific requirements that you need to be concerned with, contact Fast Offshore to find out more. We will assess your individual situation and prepare a quote for you with a detailed list of everything that is required.
How to Open Your Blockchain Company
Opening a blockchain business or crypto company can be a somewhat complex procedure. There are several key steps you need to take including making an informed choice on the jurisdiction, considering licensing, preparing documents, and ensuring you are compliant with all financial and corporate requirements.
The best way to start a blockchain company is to engage with a professional. In this section, you can learn about the whole process from start to finish, including the obligations that you, as the founder has.
Blockchain Business Ideas
So, you want to set up a blockchain company but you haven’t quite finalised your idea? There are countless applications of blockchain and crypto in business, some of which haven’t been conceptualised yet. Almost every sector needs blockchain technology to disrupt it, you just need to find your niche.
In this section, we’ll take a look at some of the leading business ideas relating to blockchain companies and services.
Contact Us to Open Your Blockchain Company
The first step on the way to set up a successful blockchain company is contacting Fast Offshore. With our decades of experience in corporate services as well as working with innovative startups and entrepreneurs we are perfectly placed to take on an advisory as well as a service provider role. With demonstrated success and experience in both blockchain and cryptocurrency as well, we have hands-on experience in the leading jurisdictions.
Contact us today to share your vision and ask all the difficult questions. Together, we can create a plan that will see your blockchain dream become a reality.
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