Written by: Mankiw x Appleby
With the rapid development of Web3 and blockchain technology, more and more companies are beginning to pay attention to how to find suitable offshore locations for company registration around the world. For entrepreneurs and investors who seek flexibility, tax optimization and legal protection, choosing a suitable offshore location is not only about saving costs, but also about establishing a solid legal foundation for future business activities.
This article will take an in-depth look at popular offshore registration locations such as the BVI (British Virgin Islands), Cayman Islands, Isle of Man, Jersey, Guernsey, Bermuda, and Mauritius, and analyze the regulatory policies, registration requirements, and successful business examples for blockchain and Web3 companies in various regions to help you make informed decisions in a global business environment.
Offshore locations available
Cayman Islands
Brief description
The Cayman Islands has a set of specialized fintech laws and regulations, such as the Virtual Asset Service Provider Law (VASP Law), to promote digital asset-related businesses. The Cayman Islands offers flexible corporate structures, including special purpose companies (SPCs), which are suitable for the needs of blockchain projects.
Advantageous business and examples
Crypto Funds
The Cayman Islands Monetary Authority (CIMA) Mutual Funds Law and Private Funds Law provide flexible fund structures. Coupled with the tax advantages of the Cayman Islands, the Cayman Islands has become one of the main registration places for crypto funds. In addition, the Cayman Islands has special regulations and guidelines to support the establishment and operation of crypto funds. Therefore, the Cayman Islands is the preferred registration place for many crypto hedge funds, such as Polychain Capital.
Example: Polychain Capital is one of the world’s largest cryptocurrency hedge funds, registered in the Cayman Islands. Polychain uses Cayman’s flexible fund structure and tax advantages to manage its crypto asset investments.
Blockchain technology service provider
The Cayman Islands' Special Purpose Companies (SPC) structure is well suited for blockchain technology projects, providing a highly flexible corporate structure.
Example: Block.one, the company behind the EOS blockchain, is registered in the Cayman Islands. This structure enables them to take advantage of Cayman’s favorable blockchain technology and special purpose company (SPC) regulations.
Main company types and main establishment requirements
SPC is a special form of exempted company (EC) with the following main establishment requirements:
At least one shareholder
At least one director
Appoint a registered agent
Provide the registered office address
Submit Articles of Association and Bylaws
Establishment time
The fastest is 1-2 working days
British Virgin Islands (BVI)
Brief description
BVI’s company registration process is simple and efficient, which has attracted a large number of blockchain startups. In addition, BVI has strong privacy protection for corporate ownership, which is attractive to some privacy-focused digital asset companies.
Advantageous business and examples
NFT Enterprise
BVI has attracted many NFT companies due to its simple company registration process and privacy protection policy. The BVI's Business Companies Act (BCA) provides a fast and low-cost way to set up a company, which is very suitable for the needs of NFT companies.
Example: Larva Labs, the developer of the famous CryptoPunks NFTs, chose BVI as its place of registration to take advantage of its favorable company registration and privacy protection policies. This enables them to manage their NFT business efficiently and securely.
Cryptocurrency trading
The Financial Services Commission (FSC) of BVI has an open attitude towards virtual currency trading business and provides certain regulatory guidance, such as Regulation of Virtual Assets Service Providers.
Example: Bitfinex is one of the world’s largest cryptocurrency exchanges and is registered in the BVI. The regulatory environment in this jurisdiction supports virtual currency trading and provides a favorable foundation for its operations.
Main company types and main establishment requirements
The main requirements for setting up a Business Company (BC) are:
At least one shareholder
At least one director
Appoint a registered agent
Provide the registered office address
Submit Articles of Association and Bylaws
Establishment
3-5 working days at the earliest
Isle of Man
Brief description
The Isle of Man has clear regulatory policies on virtual currency businesses to ensure market stability and investor protection; and the Isle of Man provides a high level of technical infrastructure support suitable for the development of blockchain projects.
Advantageous business and examples
Cryptocurrency trading
The Isle of Man Financial Services Commission’s (IOMFSC) Designated Businesses (Registration and Oversight) Act 2015 sets out the regulatory framework for virtual currency transactions, ensuring market stability and investor protection.
Example: CoinCorner is a cryptocurrency exchange headquartered in the Isle of Man. The Isle of Man’s regulatory framework supports virtual currency trading and ensures market stability and investor protection.
Blockchain technology service provider
The Isle of Man offers a high level of technical infrastructure suitable for the development of blockchain technology projects. For example, companies such as CoinCorner have set up blockchain technology service businesses in the Isle of Man.
Example: Quanta is a blockchain-based gaming company operating in the Isle of Man, which provides strong technical infrastructure and regulatory support for blockchain services.
Main company types and main establishment requirements
The main requirements for setting up a private company (Private Company, Ltd):
At least one shareholder
At least one director
Appoint a company secretary
Provide the registered office address
Submit Articles of Association and Bylaws
Establishment
The fastest is 5-7 working days
Bermuda
Brief description
Bermuda has developed a comprehensive regulatory framework for digital asset businesses, including the Digital Asset Business Act, to ensure the legality of all types of digital asset businesses. The Bermuda government actively supports the development of the digital asset and blockchain industries, providing various policies and resource support.
Advantageous business and examples
Stablecoins
Bermuda’s Digital Asset Business Act provides a comprehensive regulatory framework.
Example: Circle is a leading digital currency company registered in Bermuda. The Digital Asset Business Act provides a comprehensive regulatory framework for managing its crypto assets and operations.
Crypto-related cross-border payments
The Bermuda government actively supports crypto payments and other fintech innovations, such as the relevant policy and resource support documents issued by the Bermuda Monetary Authority (BMA).
Example: Signature Bank, known for its blockchain-based payment solutions, operates in Bermuda. Government support for fintech innovation and favorable regulations help their cross-border payment services.
Main company types and main establishment requirements
The main requirements for setting up an exempted company (EC) are:
At least one shareholder
At least two directors
Appoint a company secretary
Provide the registered office address
Submit Articles of Association and Bylaws
Licensed by the Bermuda Monetary Authority (BMA)
Establishment
The fastest is 4-6 working days
Mauritius
Brief description
The Financial Services Commission (FSC) of Mauritius has a fintech innovation sandbox to provide a trial and development platform for blockchain and digital asset companies. Mauritius has signed double taxation avoidance agreements with many countries, which helps optimize the tax structure.
Advantageous business and examples
Crypto-related cross-border payments
The Mauritius Financial Services Commission’s (FSC) Fintech and Innovation-driven Financial Services Regulatory Sandbox allows crypto payment businesses to experiment in a controlled environment.
Example: SALT Lending is a blockchain-based lending platform operating in Mauritius. The Financial Services Commission’s sandbox environment allows them to test and implement cross-border payment solutions safely and efficiently.
Main company types and main establishment requirements
The main requirements for setting up a Global Business Company (GBC) are:
At least one shareholder
At least two directors, at least one of whom must be a resident of Mauritius
Appoint a company secretary
Provide the registered office address
Submit Articles of Association and Bylaws
Licensed by the Mauritius Financial Services Commission (FSC)
Establishment
3-5 working days at the earliest
Jersey
Brief description
Jersey has advantages in setting up and managing digital asset funds, which has attracted a large number of digital asset fund management companies. The Jersey Financial Services Commission (JFSC) has developed a detailed regulatory framework for digital asset businesses to ensure legal compliance.
Advantageous business and examples
Crypto Funds
The Guidance Note on the Regulation of Crypto-Assets of the Jersey Financial Services Commission (JFSC) provides a clear regulatory framework, and its fund management legal framework allows crypto assets as investment targets and supports the establishment of crypto funds. Jersey has attracted many crypto funds, such as CoinShares.
Example: CoinShares is a major digital asset manager operating in Jersey. The island’s crypto asset regulatory framework enables CoinShares to efficiently structure and manage crypto investment funds.
Blockchain technology service provider
Jersey is actively promoting the use of blockchain technology in financial services, and the JFSC has provided detailed regulatory guidance for this purpose.
Example: Global Advisors is a blockchain-focused asset management firm headquartered in Jersey, which provides a supportive environment for developing blockchain technology services.
Main company types and main establishment requirements
The main requirements for setting up a private company (Private Company, Ltd):
At least one shareholder
At least one director
Appoint a company secretary
Provide the registered office address
Submit Articles of Association and Bylaws
Establishment
5-7 working days at the earliest
Guernsey
Brief description
Guernsey encourages the application of blockchain technology in financial services, supply chain management and other fields. Guernsey's regulators are open to new fintech and digital asset businesses and constantly update regulations to adapt to market needs.
Advantageous business and examples
Blockchain Games
Guernsey's Digital Greenhouse program supports the application of blockchain technology in different fields, including the gaming industry. Guernsey encourages technological innovation and provides legal and policy support for this.
Example: Traktion is a blockchain-based game development company registered in Guernsey. The island’s supportive environment for technological innovation helps companies like Traktion develop and launch blockchain games.
NFT Enterprise
Regulatory guidance on digital assets issued by Guernsey’s Financial Services Commission supports the development and trading of NFT projects.
Example: KnownOrigin is an NFT marketplace that has found a solid foundation for its operations due to Guernsey’s favorable regulatory stance towards digital assets.
Main company types and main establishment requirements
The main requirements for setting up a private company (Private Company, Ltd):
At least one shareholder
At least one director
Appoint a company secretary
Provide the registered office address
Submit Articles of Association and Bylaws
Establishment
The fastest is 3-5 working days
How to choose an offshore location?
Choosing the right offshore location to register a company is an important step for Web3 companies to succeed. Each offshore location has its own unique regulatory framework, tax policy and legal advantages. Companies should make the best choice based on their development needs, business models and compliance requirements. Whether seeking tax incentives, reducing legal risks, or pursuing greater market access, each major offshore location has advantages and potential challenges worth pondering. Faced with a wide range of offshore locations, how to make a better choice? For details, please consult Mankiw.
