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Author Topic: Most Bitcoin friendly country for founding a company  (Read 5417 times)
el_rlee
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September 22, 2012, 12:07:18 PM
 #1

Hi all,

 which country is most suited to found a Bitcoin based company out there? Looking for:

  • Easy and cheap incorporation of a limited liability company
  • Low tax
  • Easy AML and KYC law

Isle of Man? Panama? Macao? Hong Kong?
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cbeast
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September 22, 2012, 01:16:15 PM
 #2

It depends on what kind of business you intend to create. If you stay with a completely decentralized model, anywhere is fine.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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September 22, 2012, 02:04:30 PM
 #3

Take SatoshiDICE for instance:
According to my (I'm not a lawyer) knowledge the following is at least highly questionable in the EU:

  • no company details on the website
  • no sign of a gambling license
  • you would need to pay ~25% tax for your earnings every month
  • anti money laundering should be okay, but "know your customer" is definitely not

I don't think a SatoshiDICE Co., Ltd. would live long when sued in the EU.
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September 22, 2012, 02:12:28 PM
 #4

So far the only country that has declared Bitcoin as legal (as if) is Finland.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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September 22, 2012, 02:26:21 PM
 #5

Take SatoshiDICE for instance:
According to my (I'm not a lawyer) knowledge the following is at least highly questionable in the EU:

  • no company details on the website
  • no sign of a gambling license
  • you would need to pay ~25% tax for your earnings every month
  • anti money laundering should be okay, but "know your customer" is definitely not

I don't think a SatoshiDICE Co., Ltd. would live long when sued in the EU.

It depends on where SatoshiDICE can be considered to be domiciled. The site is a US controlled domain, and the guy who runs it is in the US, I think if the US authorities so wanted they could probably arrest him.

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TheKoziTwo
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September 22, 2012, 07:56:30 PM
Last edit: September 22, 2012, 08:20:04 PM by TheKoziTwo
 #6

The first thing to keep in mind, you must block and refuse all business with US clients. I recommend using some GeoIP blocking on your websites to simply drop all US traffic and make sure you don't have any servers in US or US owned domain TLD. Do not use paypal or other US located businesses, nor e-mail providers (or anything else) located in USA.

Quote
FIN-2012-A001
Issued: February 15, 2012
Subject: Foreign-Located Money Services Businesses

On July 21, 2011, the Financial Crimes Enforcement Network (FinCEN) published in the Federal Register a final rule on definitions and other regulations relating to money services businesses (Final Rule).1 The Final Rule amended the definition of "money services business" at 31 CFR 1010.100(ff). An entity may now qualify as a money services business (MSB) under the Bank Secrecy Act (BSA) regulations based on its activities within the United States, even if none of its agents, agencies, branches or offices are physically located in the United States. The Final Rule arose in part from the recognition that the Internet and other technological advances make it increasingly possible for persons to offer MSB services in the United States from foreign locations.2 FinCEN seeks to ensure that the BSA rules apply to all persons engaging in covered activities within the United States, regardless of the person's physical location.

FinCEN is issuing this Advisory to advise financial institutions of their obligations under the BSA when providing financial services to foreign-located MSBs. Financial institutions should note the following:

To qualify as an MSB, a person, wherever located, must do business, wholly or in substantial part within the United States , in one or more of the capacities listed in 31 CFR 1010.100(ff).3 Relevant factors include whether the foreign-located person, whether or not on a regular basis or as an organized or licensed business concern, is providing services to customers located in the United States.

Foreign-located MSBs are financial institutions under the BSA. With respect to their activities in the United States, foreign-located MSBs must comply with recordkeeping, reporting, and anti-money laundering (AML) program requirements under the BSA. They must also register with FinCEN.4

Foreign-located MSBs are subject to the same civil and criminal penalties for violations of the BSA and its implementing regulations as MSBs with a physical presence in the United States.

The Final Rule requires each foreign-located MSB to appoint a person residing in the United States as an agent for service of legal process with respect to compliance with the BSA and its implementing regulations.

The Final Rule became effective on September 19, 2011. Reporting, recordkeeping and AML program requirements under the BSA now apply to foreign-located MSBs. However, registration and the appointment of an agent for service of legal process will not be required until the revised registration form is available, which is currently planned for release in early March 2012.

Guidance

Financial institutions may find it necessary to update their AML programs if they provide financial services to foreign-located MSBs or engage in financial transactions with these entities.5 Financial institutions may find previously issued Guidance and Advisories helpful when incorporating foreign-located MSBs into their AML policies and procedures. In 2005, FinCEN and the federal banking agencies issued guidance (Joint Guidance) on providing financial services to MSBs operating in the United States.6 Additionally, financial institutions may find FinCEN's 2010 Advisory on informal value transfer systems (IVTS) to be useful in determining if their customers are operating as unregistered money transmitters.7

Suspicious Activity Reporting

Consistent with the standard for reporting suspicious activity under the BSA, if a financial institution knows, suspects, or has reason to suspect that a transaction conducted or attempted by, at, or through the financial institution involves funds derived from illegal activity or appears to be indicative of money laundering, terrorist financing, or other violation of law or regulation, the financial institution should file a suspicious activity report (SAR).8 As noted in the Joint Guidance, financial institutions that provide banking services to MSBs should file a SAR if they become aware that their customers are operating as unregistered or unlicensed MSBs.9

Questions or comments regarding the contents of this Advisory should be addressed to the FinCEN Regulatory Helpline at 800-949-2732. Financial institutions wanting to report suspicious transactions that may relate to terrorist activity should call the Financial Institutions Toll-Free Hotline at (866) 556-3974 (7 days a week, 24 hours a day). The purpose of the hotline is to expedite the delivery of this information to law enforcement. Financial institutions should immediately report any imminent threat to local-area law enforcement officials.
More: http://issuu.com/dgcmagazine/docs/digital-gold-currency-mag-november-2011?mode=window&pageNumber=9

I remind you that the man behind Liberty Dollar was described as a "domestic terrorist" trying to undermine the entire U.S. financial system. Who knows, maybe you'll be considered a terrorist too..

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September 23, 2012, 04:16:24 AM
 #7

Ah, I know now why there you need to confirm that you are not a US citizen for all European online stock trading sites.

Bitcoinica was a registered financial service provider under New Zealand law. Anybody knows how that worked for them?
Are there any other experiences with setting up such a company in another country?
Torland seams the most Bitcoin friendly, unfortunately that scares off a big part of the user base an endangers you of Mtgox freezing your assets.
But I get a feeling now why Bitcoinica is offline for such a long time and nobody came up with a successor so far. It's not the programming work which prevents it happening I guess.

Nefario
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September 23, 2012, 04:22:18 AM
 #8

Ah, I know now why there you need to confirm that you are not a US citizen for all European online stock trading sites.

Bitcoinica was a registered financial service provider under New Zealand law. Anybody knows how that worked for them?
Are there any other experiences with setting up such a company in another country?
Torland seams the most Bitcoin friendly, unfortunately that scares off a big part of the user base an endangers you of Mtgox freezing your assets.
But I get a feeling now why Bitcoinica is offline for such a long time and nobody came up with a successor so far. It's not the programming work which prevents it happening I guess.



It has never been the programming side of things which has kept any of these sites back. It is the legal risk in running such an operation. It's not possible to run one anonymously (mybitcoins.com as an example of what happens).

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el_rlee
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September 23, 2012, 04:32:40 AM
Last edit: September 23, 2012, 10:07:32 AM by el_rlee
 #9

Ah, I know now why there you need to confirm that you are not a US citizen for all European online stock trading sites.

Bitcoinica was a registered financial service provider under New Zealand law. Anybody knows how that worked for them?
Are there any other experiences with setting up such a company in another country?
Torland seams the most Bitcoin friendly, unfortunately that scares off a big part of the user base an endangers you of Mtgox freezing your assets.
But I get a feeling now why Bitcoinica is offline for such a long time and nobody came up with a successor so far. It's not the programming work which prevents it happening I guess.



It has never been the programming side of things which has kept any of these sites back. It is the legal risk in running such an operation. It's not possible to run one anonymously (mybitcoins.com as an example of what happens).

forgot ICBIT, but it doesn't seam so popular so far...

Nefario, would you like to share some of your legal structure behind GLBSE and experiences you made?

Edit: Okay, didn't do my homework, found the interview with you here http://bitcoinweekly.com/articles/interview-with-nefario-founder-of-bitcoin-global
although it seams you changed your mind since then...
TheKoziTwo
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September 23, 2012, 11:45:36 AM
 #10

Ah, I know now why there you need to confirm that you are not a US citizen for all European online stock trading sites.

Bitcoinica was a registered financial service provider under New Zealand law. Anybody knows how that worked for them?
Are there any other experiences with setting up such a company in another country?
Torland seams the most Bitcoin friendly, unfortunately that scares off a big part of the user base an endangers you of Mtgox freezing your assets.
But I get a feeling now why Bitcoinica is offline for such a long time and nobody came up with a successor so far. It's not the programming work which prevents it happening I guess.


It's not possible to run one anonymously (mybitcoins.com as an example of what happens).
E-gold is an example of what happens when you run something non-anonymous. What makes you think running an anonymous business is impossible? As long as the operator behind it is honest and perhaps well paid through fees I don't see why he would want to, nor have any incentive to scam people.

What happened to your believe in anonymity anyways? If I recall you seemed to be quite big on being anonymous on this forum back in the day.

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September 23, 2012, 04:52:33 PM
 #11

I would trust anonymous business, but only when it has a really solid business model and has been running for a long time.

For example, lately I spotted that torwallet operators had run with the money as well. Guess they didn't make enough money, and decided it was better to take the money and run.

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September 23, 2012, 04:57:32 PM
 #12

There was an e-gold type of place once upon a time that was anyonymous too. Ran for years I think it was before eventually running with the gold.

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September 23, 2012, 05:08:05 PM
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http://www.foxnews.com/world/2012/09/11/private-city-in-honduras-will-have-minimal-taxes-government/
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September 23, 2012, 07:24:14 PM
 #14

For legal aspects maybe Finland is a good choice.

"the secretary of the Central Bank of Finland publicizing that bitcoin is legal to use in Finland"

https://bitcointalk.org/index.php?topic=108845.0

 

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September 23, 2012, 07:32:16 PM
 #15

I'd look to online poker rooms for inspiration. I think Malta might be a good country, the Caribbean Islands or Chile perhaps?

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September 24, 2012, 12:20:02 AM
Last edit: September 24, 2012, 02:12:08 AM by marcus_of_augustus
 #16

On-line casinos have chosen Gibraltar or is it Malta(?).

Iceland has an MP that spoke at bitcoin conference.

Panama has interesting privacy, incorporation, etc laws.

New Zealand, Singapore and Hong Kong (and others) have laws making it easy to set-up a company.

Finland had declared bitcoin legal (only in passing I might note).

Basically it is a whole cornucopia ... I've even noticed some operations are basing the machines that store identifying customer data in places that have hard private data laws, and the servers that do transacting, processing (whatever service the business it is actually performing) in other jurisdictions that just refer to the customers as non-identifiable numbers.

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September 24, 2012, 01:30:22 AM
 #17

Hi all,

 which country is most suited to found a Bitcoin based company out there? Looking for:

  • Easy and cheap incorporation of a limited liability company
  • Low tax
  • Easy AML and KYC law

Isle of Man? Panama? Macao? Hong Kong?

When we colonize the moon and become like the people in The Moon is a Harsh Mistress.

Introducing constraints to the economy only serves to limit what can be economical.
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September 24, 2012, 04:10:09 AM
Last edit: September 24, 2012, 10:06:54 AM by el_rlee
 #18

On-line casinos have chosen Gibraltar or is it Malta(?).

Iceland has an MP that spoke at bitcoin conference.

Panama has interesting privacy, incorporation, etc laws.

New Zealand, Singapore and Hong Kong (and others) have laws making it easy to set-up a company.

Finland had declared bitcoin legal (only in passing I might note).

Basically it is a whole cornucopia ... I've even noticed some operations are basing the machines that store identifying customer data in places that have hard private data laws, and the servers that do transacting, processing (whatever service the business it is actually performing) in other jurisdictions that just refer to the customers as non-identifiable numbers.

It is both for online Casinos - Gibraltar & Malta, but I guess that has something to do with wanting to be in an European Country.

What's an MP?

Yes, there is a shitload of tax havens on this planet - I doubt that Finland and New Zealand are really easy to run a bitcoin company. Anybody watching how New Zealand treated the Megaupload case? Bitcoin being "legal" might not even be an advantage...
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September 24, 2012, 10:29:09 AM
 #19

On-line casinos have chosen Gibraltar or is it Malta(?).

Iceland has an MP that spoke at bitcoin conference.

Panama has interesting privacy, incorporation, etc laws.

New Zealand, Singapore and Hong Kong (and others) have laws making it easy to set-up a company.

Finland had declared bitcoin legal (only in passing I might note).

Basically it is a whole cornucopia ... I've even noticed some operations are basing the machines that store identifying customer data in places that have hard private data laws, and the servers that do transacting, processing (whatever service the business it is actually performing) in other jurisdictions that just refer to the customers as non-identifiable numbers.

It is both for online Casinos - Gibraltar & Malta, but I guess that has something to do with wanting to be in an European Country.

What's an MP?

Yes, there is a shitload of tax havens on this planet - I doubt that Finland and New Zealand are really easy to run a bitcoin company. Anybody watching how New Zealand treated the Megaupload case? Bitcoin being "legal" might not even be an advantage...

I think its more due to the fact that Megaupload servers were mostly US based.
In any case one of the best jurisdiction for online casinos is Costa Rica.
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September 24, 2012, 11:10:03 AM
 #20

SEALAND
https://www.google.com/search?sugexp=chrome,mod=0&sourceid=chrome&ie=UTF-8&q=sealand
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