Where Should I Bring My Crypto or Fintech Project?
I personally think, there is no universal answer, but there are some questions that you would want to consider.
For example, if all your customers are in Germany and your team members live in Germany, it makes sense for your business to be established in Germany.
If, however, you are an international business and you would like to offer your services world-wide and your team members are flexible in terms of where they would need to work, you obviously have options.
Other important questions to ask yourself:
- Do I need and do I have local language skills within my team and how important it for me to be able to do everything in English?
- What are the tax implications? Do I have investors who have a preference where they can and cannot receive dividends from?
- How easy it is to hire and bring in international talent into this country, are there specific employment or visa restrictions?
- Do I have an existing banking relationship or financial partnership and does my banking or financial partner have local presence?
In my personal experience, Luxembourg, UK, Liechtenstein, and Switzerland score quite high in all of the above.
Here are some personal observations I am happy to share.
Luxembourg is hosting European hubs of Amazon, PayPal, Rakuten, BitFlyer and Bitstamp. It is an interesting jurisdiction from tax standpoint and regulator is quite approachable. At the same time, many cryptocurrency-related projects have not been able to secure banking relationships in Luxembourg and, to the best of my knowledge, Luxembourg has not hosted any ICO project yet. From the lifestyle perspective, families with children usually like living in Luxembourg, but it is possible that some millennials may find living in Luxembourg a little boring and uneventful. Comparing to London, Zug/Zurich, Berlin or Paris, the startup ecosystem with its benefits of sharing ideas and getting inspired is somewhat limited.
Liechtenstein is totally upcoming and reinventing itself in FinTech and blockchain. This country has hosted multiple high profile blockchain projects developed a framework and ecosystem for assessing and evaluating new projects. Lawyers, accountants, trustees, regulators and even bankers 🙂 do have practical experience working with cryptocurrency projects. It is literally possible to meet with anyone you need, present your project and get feedback. However, you are expected to have many official documents in German and the location is a little remote if you need to be close to a major international airport.
UK is a little controversial due to Brexit, high level of taxation and unwillingness of the British banks to work with cryptocurrency operators (with some exceptions). At the same time, I really like the level of automation and standartization within FCA, where you can submit your documents online, pay online refer to online guides and templates. If you follow the process online, you do not need to spend time on scheduling and rescheduling face-to-face meetings and being dependent on availability of a certain person. I also have an impression that FCA tries their best to respect regulatory deadlines and make decisions within a reasonable timeframe.
Switzerland is truly amazing with all the important selection criteria, except for one big BUT: it cannot offer passporting of financial licenses into EU countries. Essentially it means that it is a great idea to bring tech, R&D, IP as well as trading and some other B2B projects to Switzerland (despite high cost of living), however, there are serious regulatory limitations in terms of what you could do out of Switzerland if you are in consumer-facing business and you’d like to go global.
