Best Countries for Setting Up Your Cryptocurrency Fund

Updated on Tuesday 27th November 2018

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The use of cryptocurrency has become popular all over the world and it represents more than just a means of payment used by natural persons. Cryptocurrencies are also used as commodities which can be traded on the stock markets and investors use them for establishing cryptocurrency investment funds

Investment fund managers have also noticed the rapid expansion of cryptocurrencies and have attracted many investors willing to award impressive amounts of money to funds issuing various types of virtual coins. The ICOs (Initial Coin Offerings) can be used in countries where the investment funds industry is very developed and which benefit from a suitable legal framework
 

Top 4 countries for opening cryptocurrency funds

Investors who are interested in how to start a fund operating in the cryptocurrency sector can set up their vehicle in one of the top destinations that can accommodate the needs of this type of activity, which are currently represented by Switzerland, Malta, Singapore and Luxembourg. Our local partners can assist them in the process of setting up their crypto funds in the below mentioned countries:   
 

 1.Switzerland With its Zug Crypto ValleySwitzerland is definitely one of the most popular countries for setting up a    cryptocurrency fund and our team of Swiss specialists can advise on the main regulations available here;
 2. Malta Another popular European destination for businessmen who want to start cryptocurrency funds, the country represents a hub of the cryptocurrency world and our team of specialists in Malta assist on the registration procedure;
 3. Singapore Asian investors can choose to set up cryptocurrency funds in Singapore, one of the most powerful economies in Southeast Asia; for professional help, please contact our Singapore company incorporation experts;
4.Luxembourg  It represents one of the most developed investment markets, being the first country which established an investment fund


Regulations related to cryptocurrency funds all over the world

 

When choosing a country to start a fund in a certain jurisdiction, the legislation is one of the most important factors determining the decision to invest. However, when it comes to cryptocurrency funds, there are numerous aspects that need to be considered, because even if the use of cryptocurrency is legal, there are countries that do not have specific laws related to the establishment of this type of investment fund.

When referring to the issuance of ICOs through investment funds, some of the top investment destinations are represented by Luxembourg, Switzerland, the Netherlands and Liechtenstein. However, foreign investors may also choose to register a cryptocurrency fund in other countries, located outside Europe, such as China and Singapore. For those interested in setting up an investment fund, our affiliates can explain the requirements and procedures.

The following video offers a short presentation on the best jurisdictions for starting a cryptocurrency fund

 

Why start a cryptocurrency fund in Switzerland?  
 

Switzerland is one of the countries that has one of the most solid legislations regarding the usage of cryptocurrencies and this creates a favorable investment climate. Under the Swiss legislation, virtual coins are seen as legal assets; furthermore, the country provides a clear tax regime addressed to virtual coins, and those using this type of currency have to complete annual tax returns (as prescribed by the Swiss Federal Tax Administration). Investors should also know the following: 
 
  • cryptocurrency exchange operators have to obtain a license issued by the Swiss Financial Market Supervisory Authority (FINMA);
  • Switzerland provides a clear legislation concerning the usage of ICOs, issued in February 2018;
  • ICOs in Switzerland are divided into three categories – payment ICOs, utility ICOs and asset ICOs;
  • payment ICOs are required to respect the national legislation concerning the anti-money laundering regulations
 

What are the best countries for ICOs?

Foreign investors in search for the best country to set up a cryptocurrency fund in should know that Switzerland, with its Zug Crypto Valley region, is currently one of the most popular destinations for starting a hedge fund for ICOs. With one of the lowest taxation systems at local level and with the support of the Crypto Valley Association, the Canton of Zug is definitely worth taking into consideration by those willing to invest in cryptocurrency funds in Switzerland.

Next to it, Liechtenstein has also created the first Crypto Country Association which cooperates with the Zug Crypto Valley Association, which should encourage the creation of cryptocurrency funds in the Principality. One of the main advantages of setting up a hedge fund startup operating in the field of cryptocurrency is given by the low corporate tax scheme applicable to this investment sector

Luxembourg is also one of the best investment destinations for those interested in setting up an investment fund through which they can issue cryptocurrencies. Luxembourg is the “home” of the European Union, therefore all major decisions and directives to be implemented at EU level will first be enabled here.

Being one of the most important financial centers in the world, Luxembourg was one of the first countries to allow the use of ICOs. Also, it is important to know that the country is the first jurisdiction in which an investment fund was set up, having a long history in this sense. Another reason to choose Luxembourg as a home to cryptocurrency fund is the reduction of the corporate tax rate from 19% to 18% starting with 2018.
 

Why set up an investment fund in Luxembourg?  


Luxembourg can be seen as one of the top destinations for registering an investment fund, an aspect that is also applicable to the cryptocurrency sector. As mentioned earlier, Luxembourg was one of the first European jurisdictions that have created various regulations related to the usage of cryptocurrency.

Its rules of law date back to 2014, when the main financial regulator of the investment companies and investment funds, the Commission de Surveillance du Secteur Financier (CSSF), issued the Bitcoin Communique 2014, being the first country, member of the European Union (EU), that enabled specific provisions for those investing in this sector. More importantly, the first EU cryptocurrency company was licensed in this country, by the CSSF

Investors who are interested in opening a cryptocurrency fund in one of the above mentioned jurisdictions are invited to contact our specialists, who can offer detailed information concerning the available rules of law. Our partners can provide in-depth advice on other top investment jurisdictions available in our investment magazine, such as Hong Kong or Ireland.