This article was first published here in December 2019 https://www.affinity.co.im/category/blogs/
Blockchain – The search for the perfect jurisdiction
Affinity’s Blockchain Consultant, Adam Funnell, shares his experience with the Isle of Man.
Far surpassing just the tech crowd, masses across the globe share the optimistic view that blockchain is the innovation that will revolutionize the world as we know it with endless possibilities, panning every industry imaginable. So how is this achievable? As a start the industry needs to grow up, forge amazing relationships between public and private partners and put in place an organic environment that’s ready to think outside of the box. As Blockchain Advisor to Affinity Management Services, working closely with Affinity and Blockchain Isle of Man, I have experienced what the small Island in the Irish Sea has to offer and why it has established itself as an prominent jurisdiction to nurture any blockchain business.
The search for the perfect jurisdiction
Having been involved in the world of blockchain for the last five years, I have searched for what I hoped would be the perfect jurisdiction to support the projects I have advised on.
Innovative companies need a home, but with so many competing jurisdictions it was difficult to decide where best to do business so to help reach an informed decision I spent time comparing rules and regulations from a number of locations. Looking at each jurisdiction in turn and drawing on what would be the most beneficial attributes for the type of innovative projects in this sector I focussed on the following:
- Is an ICO / STO able to easily liaise with the industry regulators?
- Is there easy access to legal and industry representatives?
- Does the regulation offer protection to the investor and customer?
- How are the legal definitions of cryptocurrencies and ICOs set out?
- Is there an accessible presence of industry groups and support?
- What types of corporate formations are readily available?
Many of the blockchain friendly jurisdictions claim to have these key points covered, some of course shouting louder than others about their ability to deliver, but in practice some fall short of their assurances.
So whilst pondering the ideals above, I also had to consider geography, accessibility and agility of government and not forgetting about the stability of the wider infrastructure in place to ensure that companies did not have an expensive false start!
It could of course be argued that many of these, often self proclaimed blockchain havens, can do what my clients required, as an advisor I always want to find the best place possible to do business, build relationships allowing my clients to flourish.
During May, whilst exploring opportunities for a client, I found the perfect place – The Isle of Man!
Why Isle of Man?
When discussing the Isle of Man a few keywords come up, most associate with the TT, some mention tax and financial services, a few more may mention gaming, but few say blockchain and cryptocurrencies.
But why Isle of Man for this emerging industry? A quick Google search for jurisdictions welcoming Blockchain and Cryptocurrency businesses reveals the usual key players, the ones that everyone thinks of to set up their Blockchain business.
However, the Isle of Man seemed to me to be in stealth mode in comparison to its louder, competitors. If one is to dig a little deeper you will find that Government are showing great enthusiasm for Blockchain and Cryptocurrencies.
Deeper research still will reveal several high profile businesses that have chosen this jurisdiction as their home, and the island has encouraged and welcomed them, albeit without the fanfare of its competitors. In fact, you will often hear the term ‘fast follower’ uttered in the same breath as the island, for me this is key – what has been done before, how can we learn from it and do better?
A home for innovation
The Isle of Man is already known for encouraging innovative businesses to the island and has a fantastic reputation for high quality service in the financial services and e-Gaming industries, so Blockchain seems to be the logical progression to expand and diversify the islands global business offer.
A walk around the capital Douglas, you can almost feel the hype in the air as this beautiful Island, so close to the UK, prepares to become a serious contender for the title of Blockchain Island.
Blockchain Isle of Man
To further understand why the island is such an attractive place to incorporate a blockchain business, perhaps we should start with the launch of the Isle of Man Blockchain Office and Sandbox. This allows businesses to be guided through current (and future) regulatory landscapes. This flagship initiative acts as a one stop shop for businesses coming to the island
The office was set up in February this year, but to help paint the picture of getting to this point we should go back even further to April 2015. This was when the law was amended to bring certain FinTech businesses under the oversight of the Isle of Man Financial Services Authority. The FSA have taken a stance that these businesses should be subject to registration under the Designated Businesses Act 2015.
Affinity, your partners on IOM
At the heart of doing business on the island you will need a Corporate Service Provider (CSP). A CSP is a professional entity who provides business support solutions such as Company Incorporation & Registration. Having visited and met with many CSP’s on the island, it was clear that Affinity were the perfect partner for me.
But why? Firstly, I felt that Affinity’s reputation and professional approach is so often absent from much of this space. It was clear that Affinity were making great strides to build their position as the leading CSP for innovative business on the island. Their commitment, knowledge and professionalism are second to none and saying Affinity go above and beyond for their clients is no exaggeration!
We have already collaborated on some incredible opportunities; from Bitcoin mining, copyright, to mineral mining and exploration, together we have helped present the island to clients as THE place to do business.
With strong links to government, the regulator and building a wide Blockchain network globally, Affinity is in the perfect position to help your business reach its key objective!
Please get in contact with us to start work on this incredible island!