Crypto has been around for over a decade, yet crypto founders still face challenges when choosing the right jurisdiction. In this guide, we explore the most common jurisdictions favored by crypto startups and the key reasons behind these choices.
While comprehensive statistical data is still limited, our experience working with crypto startups provides valuable insights into market best practices.
Historically, the U.S. has been viewed as a challenging jurisdiction for crypto startups. While the regulatory landscape 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.
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 the date of this guide, more than 1,000 entities with “DAO LLC” in their name are registered in the Wyoming business registry.
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 incorporated as Wyoming DUNA.
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.
Foundations have become a popular legal structure for crypto startups, starting with Ethereum, which was initially established as a Swiss foundation.
Foundations are typically used for two purposes:
Panama offers its own version of foundations, known as Panama Private Interest Foundations (PIFs). Like Panama companies, Panama PIFs are favored by crypto startups due to the lack of crypto-specific regulation and a zero-tax environment.
That said, foundations are best suited for large, mature crypto projects. In our experience, 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 once a top jurisdiction for crypto startups. However, in 2020, the introduction of the Virtual Asset Service Providers (VASP) regime changed the landscape. The new framework requires all token issuers and other virtual asset businesses to obtain licenses, making the jurisdiction less attractive for many crypto projects focused on token issuance.
While Cayman is no longer the first choice for token issuance, it remains relevant due its Foundation Companies that are used by projects that require a foundation-like entity for governance and ecosystem management.
Notable examples: ENS, Index Coop, api3.
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.
If your crypto startup does not specifically target the European market, the EU is usually not the first choice for incorporation. Among the reasons is that setting up a company in Europe often requires physical presence, making it less convenient for fully remote teams.
However, the regulatory landscape is changing. In 2024, the EU introduced the most comprehensive legal framework for the crypto industry, known as the Markets in Crypto-Assets Regulation (MiCA). This framework provides clearer regulatory guidelines, making the EU a more attractive option for compliance-focused crypto businesses.
As a result, several major crypto companies, including Coinbase and Kraken, have established their European headquarters in Ireland, primarily due to its favorable tax environment and the advantage of English as a native language.
You may notice that this guide does not include jurisdictions like Malta, the Marshall Islands, St. Vincent and the Grenadines, or other so-called exotic options. While these jurisdictions are often discussed in the crypto community, we find that there is no compelling reason to choose them in today’s regulatory environment.
