This guide explores a wide range of jurisdictions, from well-established choices like Delaware to emerging alternatives such as Wyoming, Nevada, and Texas, as well as offshore options.
Whether you are raising venture capital, managing tax exposure, or protecting intellectual property, each option offers distinct benefits and challenges for different business models.
Important Note: We intentionally keep this guide brief but broad to help you form a holistic understanding of key jurisdictions and legal entities. For deeper insights, you can always explore dedicated pages covering each country or entity in more detail.
If we look at all startups registered in a given year, around 80% are incorporated in the U.S., with the remaining 20% spread across various jurisdictions.
The main reason for the U.S.’s dominance as the preferred incorporation jurisdiction is the availability of venture capital, which is crucial for early-stage startups.
The distribution may vary across specific industries. Crypto and GameDev startups are more likely to explore offshore options due to regulatory and operational considerations. However, for general tech and SaaS startups, the U.S. remains the go-to choice for incorporation.
Delaware remains the primary state for the venture-backed startups. Well known to institutional investors, its C-Corp structure allows companies to raise funds through SAFEs and priced rounds with ease.
Learn more about C-corp taxation in Delaware and formation timeline here.
Wyoming stands out for its anonymous ownership, meaning shareholders and directors are not disclosed in public filings. With low maintenance costs and strong privacy protections, it is an attractive choice for bootstrapped teams looking for a cost-effective and discreet incorporation option.
Recently, Nevada and Texas have gained traction as corporate-friendly states. Both offer slightly lower state-level taxes and, more importantly, a more predictable judiciary and corporate regulatory framework.
Learn more about taxation and formation timelines for Nevada and Texas companies here. Check out a detailed legal comparison here.
Crypto startups often face a tough choice when selecting a jurisdiction. The main challenge is the regulatory uncertainty surrounding crypto in many countries.
While we strongly recommend consulting a competent lawyer, such as those from the Crypto Practice at Buzko Krasnov, here’s a look at some of the most popular jurisdictions for crypto startups.
Historically, the U.S. has been viewed as a challenging jurisdiction for crypto startups. While the regulatory landscape in 2025 is shifting under the new administration, it’s still too early to declare the U.S. the best home for crypto businesses.
That said, Delaware C-Corps remain the standard for DevCo or LabsCo structures. These entities are responsible for developing the underlying protocol and provide the necessary legal framework to raise funding via SAFE or Token Warrants, open bank accounts, and issue stock options to key individuals.
However, Delaware C-Corps are never used for token issuance or for operating regulated or high-risk business models, such as prediction markets.
In the crypto space, BVI entities are commonly used to issue a project's native tokens. This is primarily due to two factors:
Notable examples: Many CoinList projects are set up in the BVI.
As of the date of this guide, Panama has no specific crypto regulation. This makes it a popular jurisdiction for crypto companies looking to establish operating entities. Additionally, Panama does not tax income derived from outside the country, meaning proceeds from token sales are generally not taxable.
Also worth noting, in October 2023, Panama was removed from the FATF gray list. The decision came after significant efforts by Panama to strengthen anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
Notable examples: Polymarket, SushiSwap.
While Skala does not yet offer the registration of Panama Private Interest Foundations (PIFs), it’s worth understanding their role in crypto.
Foundations are typically used for two purposes:
In our experience, foundations are best suited for large, mature crypto projects. If your project isn’t in the Top 200 on CoinMarketCap, you probably don’t need to add a foundation to the already complex life of a crypto founder.
The Cayman Islands were a top crypto jurisdiction until 2020, when the Virtual Asset Service Providers (VASP) regime was introduced, requiring token issuers to obtain licenses.
Today, Cayman is primarily used for Foundation Companies, which function similarly to Panama PIFs in structuring and purpose.
Wyoming has always been at the forefront of corporate innovation. It was the first to adapt its LLC law for DAOs in 2021 (see the Wyoming DAO Supplement) and later introduced a special framework for Decentralized Unincorporated Nonprofit Associations (DUNAs) in 2024.
Wyoming DAO LLCs are typically used for for-profit activities with decentralized decision-making enabled by smart contracts. Members benefit from limited liability protection, shielding their personal assets from the organization's debts and obligations.
As of February 18, 2025, more than 1,000 entities with “DAO LLC” in their name are registered in the Wyoming business registry.
At this time, Skala does not offer Wyoming DAO LLC registrations.
The Wyoming DUNA is the latest step in adapting traditional corporate structures to meet the needs and challenges of the crypto community. Unlike Wyoming DAO LLCs, a DUNA is designed as a non-profit entity and requires at least 100 members.
For more details, check out the background and overview here. For a more in-depth legal analysis, see this overview.
In summary, while both Wyoming structures cater to decentralized organizations, Wyoming DAO LLCs are more suitable for for-profit ventures, while Wyoming DUNAs are specifically designed for nonprofit DAOs with a larger membership base and a focus on charitable or community-oriented purposes.
For reference, see Charter of Nani DAO incorporates as Wyoming DUNA.
Currently, we don’t offer Wyoming DUNAs on Skala.
The UAE has historically been considered a crypto-friendly jurisdiction. However, with the introduction of crypto regulations in certain emirates, its popularity among crypto startups has declined. That said, if your project is targeting the Middle East market, the UAE remains one of the best options.
While Skala offers UAE Free Zone Company registrations, these entities are not specifically designed for crypto-related activities.
With no centralized federal regulation of the AI industry in the U.S. and minimal state-level regulations in major incorporation hubs, the choice of jurisdiction should primarily depend on growth strategy and tax considerations.
Given the AI boom, some states, like Nevada and Texas, are trying to position themselves as go-to states for AI startups. However, Delaware remains the gold standard for both commercial AI startups and non-profit AI institutions focused on delivering broad social benefits.
The standard choice for AI startups seeking venture funding and contemplating an IPO one day is Delaware, as 80% of public companies are incorporated there.
Learn more about C-corp taxation in Delaware and formation timeline here.
Unlike traditional corporations that are solely driven by maximizing shareholder profit, PBCs allow directors to consider the company’s public benefit alongside financial returns. This means AI companies can facilitate the attraction of necessary capital for advancing artificial intelligence while adhering to the foundational goal of benefiting humanity.
Notable examples: Anthropic, founded by former OpenAI researchers. In November 2024, OpenAI announced the restructuring of its for-profit division into a Delaware PBC.
Learn more about PBC taxation in Delaware and formation timeline here.
With the recent shift in case law regarding the treatment of major shareholders in Delaware, along with endorsements from public figures like Elon Musk, Nevada and Texas have emerged as more appealing states for AI startups.
Notable examples: Elon Musk’s x.AI is incorporated in Nevada.
Solopreneurs have existed for centuries, but in the digital age, they have become a category of their own. These businesses are typically run by a single individual or a small team, operating in a lean and efficient manner while maintaining full control, often without raising outside venture capital.
Another common characteristic of many solopreneurs is their location independence. As digital nomads, their personal tax residence is often different from the jurisdiction where their company is registered, making tax structuring a crucial consideration.
LLCs in the US are known for their pass-through taxation, which means that the company itself does not pay federal income tax; instead, profits and losses are reported on the owner’s personal tax return.
For solopreneurs, this means that they can benefit from simplified tax filing and potentially lower overall tax liability, depending on their personal tax residency and income structure.
For this reason, many solopreneurs prefer pass-through entities, such as Delaware LLCs, for their businesses.
Delaware C-Corps are suitable for solopreneurs who plan to raise venture capital or issue equity through employee stock option plans (ESOPs) for key individuals.
If you are not a big fan of the US as your base jurisdiction (which may be the case for many legitimate reasons, such as strict regulations or a changing political environment), Hong Kong can be a great alternative.
Hong Kong has a territorial tax system. Only income sourced within the jurisdiction is taxed. If your business earns revenue outside Hong Kong, you may qualify for a 0% tax rate. This is somewhat similar to pass-through taxation for Delaware LLCs, where tax obligations depend on the owner’s personal tax situation.
Game development startups developers may create virtual worlds, but they still need a legal base in the real one. Below is a short breakdown of the most popular jurisdictions and what they offer, depending on the specific needs of different GameDev sectors.
The standard choice for GameDev startups looking to raise venture funding and scale operations. Delaware allows flexible structuring of complex equity rounds, making it easier to secure investment from institutional investors.
Notable examples: Electronic Arts, Activision Blizzard.
Panama is a go-to jurisdiction for game developers experimenting with web3 or crypto mechanics, such as the issuance of tokens. For example, many of the games (mini apps) from the Telegram ecosystem rely on such mechanics.
If a game involves token issuance or distribution, including for in-app activities, Panama allows multiple issuances of tokens with minimal regulatory restrictions. Additionally, Panama’s territorial tax system exempts corporate income tax and capital gains tax on revenue generated outside the country, making it a tax-efficient choice for international Mini Apps development studios.
Perhaps one day, space startups will be based on the Moon or Mars, but for now, they need a legal home on Earth. Let’s take a look at some of the key jurisdictions for space startups.
Space startups need significant outside capital. The US has the most developed space infrastructure and the largest pool of venture capital for space companies. If you plan to raise funding from US investors, a Delaware C-Corp is the most common choice.
While Delaware C-Corps remain the standard for space startups raising US venture capital, recent events, such as the Delaware court ruling against Elon Musk’s Tesla compensation package, have raised concerns about predictability and business-friendliness in the state.
For space entrepreneurs who want C-Corp benefits but prefer a different legal environment, Nevada and Texas are solid alternatives.
The US isn't the only player in the space industry. Several other countries see huge potential in space exploration and are willing to invest in the sector. One of them is the UAE. If your project has ties to the UAE or plans to raise capital from local investors, it makes sense to establish your legal entity there.
Special Purpose Vehicles (SPVs) are used for a variety of purposes, from structuring investments to holding assets, managing risks, and facilitating joint ventures. Below are some common types of SPVs used by both emerging entrepreneurs and experienced investors.
For SPVs, the choice of jurisdiction is usually straightforward. What requires more attention is the structuring and drafting of the charter (operating) documents, which define the relationships among shareholders. This is where you should spend more time to ensure the SPV aligns with your specific needs.
At Skala, we help you register legal entities suitable for SPVs, but you’ll still need a lawyer to customize your SPV’s structure to fit your specific needs.
An LLC in Delaware remains the gold standard for SPVs. It benefits from pass-through taxation, meaning the SPV itself is not taxed, and shareholders typically, but not always, pay taxes based on their own tax residency and applicable tax rates.
Moreover, Delaware offers a highly flexible and well-established corporate framework, which has been successfully used for SPV structures for decades.
A relatively recent development in corporate law is the concept of Series LLCs.
A Series LLC is a special type of limited liability company that allows for the creation of multiple series (or sub-entities) within a single LLC, each with separate rights, obligations, and liabilities. This structure ensures that the debts and liabilities of one series do not affect the others, providing internal asset protection while maintaining the simplicity of a single legal entity.
The main use cases for Series LLCs include:
Just like regular LLCs in Delaware, Series LLCs can benefit from pass-through taxation, meaning the entity itself is not taxed, and income or losses flow directly to the owners, who report them on their personal tax returns.
If for any reason you don’t favor the US as a jurisdiction for your SPV, consider BVI as an alternative.
The British Virgin Islands (BVI) is a popular jurisdiction for SPVs, offering flexibility, privacy, and tax efficiency. BVI does not impose corporate income tax, making it attractive for investment vehicles and asset-holding structures.
Shielding assets from liability and minimizing tax exposure are top priorities for many businesses and investors. Some jurisdictions go a step further by offering complete anonymity and zero state taxes, making them ideal for those seeking privacy and financial efficiency.
For Wyoming-domiciled businesses holding high-value assets like real estate or intellectual property, the absence of state income, estate, or inheritance taxes allows to retain more capital for asset management or reinvestment. Additionally, Wyoming does not require public disclosure of members or managers while providing strong liability protections to shield personal assets of the owners from potential claims.
Nevada also provides strong liability protection, safeguarding personal assets from business-related claims while keeping the company’s owners anonymous. Furthermore, Nevada is the only state that does not have a state-level information-sharing agreement with the Internal Revenue Service.
BVI companies are a popular choice for proprietary trading, allowing individuals to use a separate legal entity to manage and trade securities and crypto.
