Just like any other business, the ICO project should have an original business model and an appropriate corporate structure.

First of all you need to find solutions to the following problems:

• possibility of using your existing company in IСO,
• elimination of risks for the company and founders associated with a participation in the ICO project,
• right choice of a company and the corporate structure of ICO project,
• to determine business units (firms) that will bear the main tax burden,
• whether it’s worth hiding the beneficiaries (founders) in tax-free offshore zones and what are the best options to do it,
• to choose methods used in modeling the corporate structure (“break of the legal relationships”, “contracts to be signed and registered”, “which company will be the issuer of the token?”, and “which companies will be financial agents, service providers”, etc.)),
• to issue a token with the company’s assets or to create a distributed/ decentralized corporate scheme,
• rules of a jurisdiction choices, a procedure of registration,
• what is your token or coin in terms of financial accounting and how to properly reflect transactions in financial statements,
• how to protect your assets from seizure,
• how to avoid charges of “illegal business activity”, “fraud”, “illegal issue of securities”, “illegal currency transactions”, “illegal use of cryptographic data”, “illegal activities in the field of cryptography”, “tax evasion”, “illegal financial transactions”, “legalization of criminal money “imaginary and invalid transactions”, etc.

At the second stage of your project planning you need to determine what are your target countries and clients. How does it affect payment structure.

You need to decide what ratio of funds you plan to raise in fiat and whether you really need it.

If you want to make transactions in fiat currencies, which bank is ready to accept payments from buyers. It is necessary to solve this issue first of all, even before the issue of registration of the company and the choice of jurisdiction.

Make a decision on economic model of the product as token can be built in different ways-as “security” or as “utility”. Which model is most suitable for your business.

You need to understand the scheme of withdrawal of cryptocurrencies in fiat to finance the development of the company.

Does your business fall under licensing. What licenses you need to obtain for your business and in which countries?

You need to decide whether you want to sell your product or token to the US market. This can greatly influence the resolution of all other issues.

We have listed only the most basic questions to which you should know the correct answers before you decide to start an ICO company. And please note that all these tasks you have to solve simultaneously at the start .

We, Platinum team, have passed the experience of launching successful startup and ICO project ourselves. So we have ratio to support startups and help you make the right decisions.

While deciding which scheme of incorporation, legalization and business running to choose, you need to know the sequence of tasks and the most important moments to pay attention to.

1. Decide for yourself which markets you want to enter in the future with the product you are creating. If you are developing a cool app for IPhone and your goal is to be in the AppStore and in the markets of the USA, Canada and the EU, then there is no point in buying a cheap company offshore and hide the beneficiaries.

Or, if you are the fintech or a serious large-scale investment project and your token can’t be a utility token, then it also doesn’t make sense for you to hide offshore and mask the token.

By publicly announcing on the Pre-Sale that your token is a security token and you intend to apply for its registration as a security paper or an investment contract, you can get impressive cheques from major investment funds, family office and major investors and to no longer worry about the high legalization costs through the SEC US. Do not forget to make a SAFT (according to all the rules of SAFE) and you will not have problems with finding a bank that will accept these payments.

2. Decide a payment structure for yourself. Who is the main audience of your token? Are they professional crypto-investors, classical venture funds, geeks, crowd or all of them? If so, try to test and determine the ratio.

2.1. In case you don’t plan to attract fiat investments, cash or plastic from your fans or official fees from institutional investors, in other words – you accept only the crypto for your tokens, the issue of choosing a jurisdiction become much easier .

If for your product is not further interested in the market of the USA, Canada, Singapore and China, then you can declare loudly and clearly: “Google, choose for me any offshore at a cheaper price.” In this case solve the issue with the confidence of investors in your project, burn up to 80% of the crypto for marketing and so on… Well, also, you can safely send the crypto to the mixer, go bankrupt or simply disappear.

Although if you still have ambitions to bring your token to the exchange and to continue a businessman career, then you should think carefully about whether to hide the beneficiaries and buy a garbage can in the offshore.

2.2. If you need a quick fix and you want to optimize your taxes, but also want to reach the exchanges and sell the product, then the combined option will suit you.

If you accept only crypto on the token sale, but later you want to go to the exchange, then you need to use a scheme of a so-called contract manufacturing for the technical writing of a smart contract, organization of the fundraising company and the release of tokens, where the customer is a company in a prestigious jurisdiction and all rights will be transferred to it, and the proceeds will go to work payments and will be kept in the IT-offshore.

2.3. If you need to accept fiat from investors and minimize taxes or hide the beneficiaries, then note that today banks avoid opening accounts for companies from the Islands, and if you are a company from the Islands that exists for less than a year, which was gathered to trade tokens – you may also forget about fiat…

If you find a bank in the offshore – it is great, but just check its partner banks and correspondent accounts at least in one banking hub abroad. Otherwise, you will stay on the Islands to change your tokens for beads.

Do not fall in despair, use the scheme to raise funds by involving a financial agent incorporated in a prestigious jurisdiction, with a brokerage license and Escrow accounts controlled by banks. And the final beneficiary can rest in tax-free offshore companies in BVI, Saint Vincent Grenadines, Bermuda or Bahamas. This scheme is often used by financial dealers, brokers, providers, bookmakers and online casinos.

2.4. In addition to the choice of the corporate scheme and in which jurisdiction to land it, it is important to think about the business model, activities, models of the main business processes, about the model of further scaling of the business and the taking into account the specifics and the legal nature of the product itself (media, games, software, financial products, etc.). This is connected to the choice of the form of the company and the model of activity.

For example, if you have a Charitable Foundation, a purely scientific startup, a consumer or an industrial cooperative, a venture fund or educational products, you can register as a foundation and choose jurisdictions that are friendly for them or even innovation centers and free economic zones. The most famous example is the Crypto Valley Zug in Switzerland.

PS: At the moment there are no ready-made universal solutions for the choice of jurisdiction, and in each case, you need to find an agent who will convince particular banks that your token is not security, is not a cryptocurrency and has not been listed on the exchanges yet, and during the sale you will follow all necessary procedures of KYC and AML. And you, in your turn, make sure that the Bank will not be dead in a week, and the owner is not wanted by Interpol.

Thus, the choice of jurisdiction should begin with choosing a model of the tokenomica, determining the legal nature and qualifications of the token as Utility or Security, calculating the audience of potential investors and setting the structure of payments.

In the matter of jurisdiction choice, start from a choice of the right bank and its requirements to the address, type, duration of activity and beneficiaries.

Further, obviously, it does not make sense to set up a company where the ICO is prohibited, strict currency, tax regulation and strict financial supervision, and the authorities and regulators are generally unfriendly to business. Further it is necessary to take into account the regulation and the position of the authorities: licensing of the operations with crypto assets, any mention of bitcoin and crypto in the legislation and the context is also important… the absence of any regulation can be an advantage.

In addition to the legislation, pay attention to the practice of law enforcement, the popularity of jurisdiction among existing ICO companies, positions about the protection of the rights of ICO investors and the requirements for registration of the token’s issue as a security paper and etc.

From all other sides, the algorithm of jurisdiction selection for the ICO of the company is not different from the choice of jurisdiction for any other business related to wild world sales. These are issues of tax minimization schemes, simplicity and terms of company registration, the need for personal presence or distance registration, requirements for the presence of nominee directors and shareholders, quotas for employment of the local population, the presence of the office and the secretary, the structure of business and the company (holding, group, joint stock company, etc.), the order of disclosure and financial and other reporting rules. Including whether your founders like downhill skiing or kitesurfing.

If you need a simple solution we are ready to help to you develop an economic model according to the structure of your business and company . And, on the contrary, we will build the structure of the company in accordance with the structure of your business model. Or do all turnkey including structuring the business model of the token as Utility or Security, removing all legal risks and completing enterprise model of your business, identifying for each particular business model the most appropriate jurisdiction, the scheme of incorporation, banks and financial schemes of the token sale using both cryptocurrency and fiat payments, and schemes for further legalization of the crypto in fiat. We will provide a reliable legal cover and advise the best places for kitesurfing or ski slopes despite the time of the year and the global political crisis.

Escrow agent is an intermediary between the investor and the issuer – startup or ICO project.

The purpose of Escrow agent is to guarantee the conditions of execution of the transaction or roadmap of the issuer/ seller of tokens (assets) and the investor.

The investor pays not to the ICO project directly, risking being deceived, but to a certain intermediary. The essence of this is that values from the account of the agent transferred in favor of one of the parties only if it fulfilled its obligations to the other party. Therefore, the use of Escrow allows the seller and the buyer to enforce the obligations and to minimize the risk of disruption to the transaction or the possibility of fraud by one of its parties.

Nevertheless, the main risks for the investor are not in the possibility that tokens won’t be sent to his e-Wallet, this problem was solved by blockchain technology and the Ethereum platform. They are in the conditions stated by the issuer, for example, to make a-testing of the MVP product before an exact date or to return the money to investors if the required amount of funds is not collected, etc.

Tripartite Agreement Investor-Escrow-Issuer may include more complex conditions for the control process of the startup implementation, for example, control of targeting and effective control of the funds when Escrow agent performs the role of a Treasury. Escrow agent may exercise the financing of the project on behalf of the Management of a startup, directly sending funds to the contractors, the contragents, paying for the work of the members of the project team, in accordance with the public financial plan, schedule, and checking the purpose of payments and by publishing reports to investors. In this case, the ICO startup itself does not receive investor’s funds to their accounts, so there is no risk of fraud.

However, Escrow agent is also bound by the terms of the agreement with the investor, which may provide a very limited functionality and control of powers. It is always important for the investor to check this kind of an agreement. It is not excluded that the Escrow agent itself might be involved in a fraudulent scheme. So, check all documents carefully.

If you make your ICO startup, you meet with the problems of opening bank accounts, selection of the e-Wallet and of the personal account, passing KYC and AML procedures, holding and processing payments in fiat. Stricter requirements and regulations for the ICO startups and the complexity of these procedures distract the team from product development and consume time. It’s unnerving and usually requires large financial costs. Not to mention the lack of experience, mistakes, losses as well as fraud risks.

In addition to the described classic scheme of cooperation with the Escrow agent, he can also solve the problem of processing and making payments.

In this case Escrow agent solves the problem of performing the role of the financial agent and the provider. As usual, such organization can take over all the administration and project management issues:

– providing their own accounts in partner banks for receiving and processing fiat payments from investors, – exchange of the received cryptocurrency into fiat, – accounting, storage and management of project funds, – conversion of received funds into a suitable currency, – financing and cost management of ICO startup, – optimization of expenses and tax payments, – reducing the risk of seizure of funds, closing Bank accounts, banning the company and so on, – reduction of transaction and transaction costs, – maintenance of financial, tax and accounting records, – interaction with the community of investors, publication of reports, performing the function of a mediator and arbitrator of disputes, – placement of funds on deposit and increase of the profitability of the project, – currency and exchange rate risk management.

This is not a full list of advantages of working with Escrow agent.

The main advantage is that working through Escrow agent increases confidence of the investors in the project and brings you closer to the hard cap.

The choice of the Escrow agent depends on the jurisdiction of its activities, regulatory rules and restrictions, the legality of its institutional and financial model, the availability of appropriate licenses for crypto-brokerage activities or Central Bank’s permits, etc.

We will help you choose the right Escrow agent, draw up or check all the necessary agreements and documents, or we can just advise and offer a financial and legal scheme of work for your ICO project or startup.