How to register an ICO fund in the Netherlands?

How to register a fund in Holland for an ICO

Initial Coin Offering or ICO has become a significant phenomenon in the world of cryptocurrencies, providing companies with an opportunity to raise capital by selling tokens to investors. With the rapid development of digital technologies and growing interest in cryptocurrencies, ICOs have become a popular tool for financing new projects.

In this context, the Netherlands stands out as a captivating jurisdiction for enrolling ICO funds. A propitious juridical milieu, constancy of the fiscal system and endorsement for novelty render Netherlands an intriguing preference for cryptographic entrepreneurs and stakeholders.

The intent of this manuscript is to furnish a synopsis of the procedure of enrolling a pool in the Netherlands to conduct an ICO. We will look at the main steps, required documents, as well as the specifics of regulation, taxation and investor attraction in the context of the Dutch jurisdiction.

ICO and fund basics

Before delving into the features and procedure of registering a fund in Holland under an ICO, it is important to understand the basics of this financial mechanism.

What is an ICO?

ICO stands for Initial Coin Offering, i.e. initial coin (token) offering

In an ICO, a company issues new tokens and offers them for sale to investors in exchange for cryptocurrency (typically bitcoins or ethers) or fiat money. These tokens, or sometimes referred to as coins, are digital assets that can have various functions within a project or platform, such as accessing services, voting, participating in staking, or receiving dividends.

It is important to note that the term ICO is often associated with cryptocurrencies and blockchain technology. During an ICO, a company usually publishes a white paper (whitepaper) that describes the project idea, its technical details, business model, ICO terms and conditions, and other information that may be of interest to potential investors.

ICOs allow companies to quickly raise funds in the early stages of their development without having to approach traditional investors such as venture capital funds or banks.

Definition of a fund in the context of the ICO

In the context of an ICO, a fund is an organisational structure created for the purpose of managing the funds raised and directing them to various projects or assets. The fund can act as an intermediary between investors and projects, ensuring transparency and efficient investment management.

• Governance structureThe fund can be organised as a trust, investment fund, legal entity, etc. The key participants in the fund are usually the manager, investors and administrators.
• Purpose of the fundsThe fund determines the objectives and investment strategies of the collected funds. This may be the development of its own project, investing in other ICOs, funding startups or technology initiatives.
• Transparency and reportingThe Fund should ensure transparency of its activities and provide investors with regular reports on the status of funds and their use.
• Protection of investors' interests The Fund must comply with laws and regulations, ensuring that the interests of its investors are protected and ethical standards are maintained.
• Risk ManagementThe fund must develop and implement strategies to manage the risks associated with investments in cryptocurrencies and ICOs to minimise potential losses to investors.

In general, a fund in the context of ICOs plays an important role in ensuring the safety and performance of investments and in maintaining the confidence of investors and the market as a whole.

Why Holland?

In today's world of cryptocurrencies and blockchain technology, choosing the right jurisdiction to register an ICO fund is one of the key decisions that determine the success of a project. Holland, due to its economic and legal climate, as well as a number of other factors, is becoming an increasingly attractive location for cryptocurrency startups and ICOs. Let's take a look at the main reasons why Holland may be an ideal choice for registering an ICO fund.

Overview of Holland's economic and legal climate

Holland is one of the largest economies in Europe and the world. Its economy is characterised by a high level of development, innovation potential and openness to international trade. Despite the country's small size, it has a high GDP per capita and significant export volumes.

Holland is renowned for its developed infrastructure, high quality education and scientific research. These factors contribute to a favourable environment for innovation and the development of technology startups, including those working in the field of cryptocurrencies and blockchain.

Holland is characterised by a stable legal climate and a high level of legal protection. The country's legal system is based on the principles of legality and fairness, which provides predictability and reliability for businesses.

In addition, Holland is a member of the European Union (EU), which provides companies with access to the single market and the ability to freely move capital, services and goods within the EU. This creates additional advantages for cryptocurrency startups that can quickly scale their businesses across the European market.

All of the above factors make Holland an attractive destination for cryptocurrency startups and ICOs. The high level of economic and infrastructure development, stable legal regime and access to financial resources make the country an ideal place for the creation and development of cryptocurrency projects.

In addition, a favourable investment environment and support for innovation from the government create conditions for the successful development of cryptocurrency startups and attracting investment at the early stages of their development.

Advantages of Holland for cryptocurrency startups and ICOs

• Favourable legal environment. Holland has progressive and open legislation that provides financial technology companies with ample opportunities for innovation and development. The government actively supports technological innovation and financial startups, which favours the development of cryptocurrency projects in Holland.
• Stability and reliability. The economic and political stability of Holland makes it attractive for investors and entrepreneurs. Thanks to the predictable legal and economic climate, startups can count on long-term sustainability and protection of their interests.
• Developed infrastructure and technology cluster. Holland is known for its advanced technological development and innovation. Startups have access to highly skilled professionals, investment funds and incubators, and a wide range of technology services and resources.
• Tax incentives and investment opportunities. Holland provides various tax incentives for investors and startups, including a tax system for research and innovation projects. This makes the country attractive for investment and encourages the development of cryptocurrency startups.
• Geographical location and access to EU markets. Holland is located in the centre of Europe and has a strategic geographical location that provides access to the largest markets in the European Union. This makes it an ideal location for cryptocurrency startups looking to scale their business globally.

Holland represents an attractive location for fund registration in the context of ICOs due to its favourable legal regulation, economic stability, innovative environment, access to financial resources and strategic geographical location.

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Overview of ICO regulation in the Netherlands

By virtue of its status as an EU member, Holland is obliged to conform to the EU's comprehensive regulations, encompassing those relating to blockchain technology and cryptocurrencies. Interestingly, the Netherlands possesses its own array of statutes governing financial technology, including inaugural coin offerings (ICOs).

• A ordinance promulgated to supervise the pecuniary domain. Digital currencies and lattice ventures are not exempt from the regulations imposed by this statute, which manage investment amenities and fiscal institutions. It mandates that the Netherlands Agency for Fiscal Markets (AFM) regularly supervise certain enterprises and establishes licensing benchmarks.
• The GDPR is the General Data Protection Regulation. Data correlated to digital cash dealings, as well as other personally identifiable facts, may be subject to the regulations delineated by this statute. It safeguards the privacy of users' singular data.
• The Legislation of Securities. ICOs that furnish tokens with latent security attributes are regulated by this decree. Consequently, they could have to comply with more ordinances and become registered.

The Nederlandsche Reserve (DNR) and the Bestuurlijk Orgaan voor Financiële Handel (BOFH) are the principal Dutch organizations accountable for supervising the monetary markets. These entities oversee the monetary sector, ensuring that digital currency initiatives and other monetary enterprises adhere to the regulations designed to safeguard investors, prevent deceit, and maintain market stability.

One of the key aspects of ICO regulation in the Netherlands is compliance with Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws. Under these laws, companies that exchange cryptocurrency for fiat money or provide cryptocurrency storage services are required to comply with certain KYC (Know Your Customer) and AML standards.

In addition, Holland is actively working to develop and implement new laws and regulations that govern cryptocurrency projects and ICOs. These measures are directed at ensuring transparency, security and legality in cryptocurrency investments and financial technology.

Selecting the right fund structure in the Netherlands for the ICO

Choosing the right fund structure is a key step when registering a fund in the Netherlands for an ICO (Initial Coin Offering). In the Netherlands there are several legal forms of organisations that can be used for this purpose. Each of these forms has its own characteristics, advantages and limitations. It is important to carefully research and choose the structure that best suits your project objectives and legal requirements. Here is an overview of the most common types of fund structures in the Netherlands: BV, NV and Stichting.

BV (Besloten Vennootschap) - Closed Joint-Stock Company

BV (Besloten Vennootschap) is one of the most common forms of fund in Holland under ICO. It is a closed joint stock company that provides a wide range of business management and investment opportunities.

• Limitation of liabilityBV shareholders are only liable to the extent of their equity investment, which means their personal assets are protected from the fund's liabilities and debts.
• Minimum capitalA minimum authorised capital of 1 euro cents is required to set up a BV, making this structure accessible to small and medium-sized companies.

• Management flexibility: a BV has great flexibility in managing the business as shareholders have the right to appoint directors and make strategic decisions.
• Attracting investment: BV can attract investment from shareholders, including through issuing new shares or raising loans.

BV (Besloten Vennootschap) is an attractive structure for an ICO fund in the Netherlands due to its management flexibility, limited shareholder liability and ability to attract investment. This allows the business to be managed efficiently, raise capital and grow in the current economic environment.

NV (Naamloze Vennootschap) - Public Joint Stock Company

NV (Naamloze Vennootschap) is a form of public limited company in the Netherlands. This structure is widely used for large and public companies that have a need to attract a broad investment audience and more sophisticated management.

• PublicityNV is required to publish its financial statements and other important information, making its operations transparent to investors and regulators.
• CapitalNV is able to raise capital by issuing new shares in the public markets, allowing it to receive large amounts of investment.
• Governance NV's governance can be complex, as it must comply with various laws and regulations, as well as consider the interests of a wide audience of shareholders.

• Investment attraction: an NV has access to public capital markets and can attract investment from a broad investment audience.
• Prestige and credibility: NV's status as a publicly traded company gives NV prestige and credibility, which can help it attract investment and business development.
• Growth and development: with access to large amounts of capital and the ability to publicly float shares, NVs can grow and develop faster than closed companies.

NV is intended for large enterprises and is suitable for ICOs in the Netherlands directed at attracting significant investments. Unlike a BV, an NV can freely trade its shares on public markets. This requires stricter regulatory compliance and financial reporting, which can be both an advantage and a disadvantage depending on the scale of your project.

Stichting (Foundation)

Stichting, or foundation, is a special legal structure in Holland that is often used for charitable purposes, asset management or financial management. This structure offers a high degree of flexibility and can be an attractive choice for organising an ICO in Holland.

• Aims and ObjectivesStichting can be set up for a variety of purposes including charitable, educational, social or commercial purposes.
• Asset management Stichting trustees are appointed to manage the assets of the Stichting for the benefit of its beneficiaries and in accordance with its articles of association.
• Transparency and accountability Stichting is obliged to comply with laws and requirements for the management of the fund and to report on its activities.

• Management flexibility: stichting funds offer a high degree of flexibility in managing assets and operations, making them an attractive choice for a variety of purposes and objectives.
• Limitation of liability: like other legal structures, Stichting provides a limitation of liability for the founders and trustees of the fondation, which protects their personal assets from the liabilities of the fondation.

Stichting is a flexible and efficient structure for managing assets, realising non-profit objectives and charitable projects and conducting ICOs in the Netherlands. Its advantages include management flexibility, limited liability and the ability to realise different goals and objectives. However, Stichting cannot pursue for-profit goals, so it may limit the ability to attract investments for financial gain.

How to choose the right form for an ICO in Holland

Choosing the right structure for an ICO in Holland is an important step that can have a significant impact on the success of your project. Below are the main aspects to consider when choosing a structure for an ICO:

1. Project goals. Define the goals of your ICO project. What exactly do you want to achieve with an ICO? It could be to raise investment, distribute tokens, fund project development, etc.
2. Legal and financial aspect. Consult lawyers and financial experts on the legal and financial aspects of each structure. Make sure that the chosen structure complies with Dutch law and allows you to achieve your goals.
3. Management flexibility. Consider the level of flexibility each structure provides. Some structures, such as BVs and NVs, can provide greater flexibility in managing the business and making strategic decisions.
4. Investment Attraction. Evaluate each structure's ability to attract investment. NV, for example, may be a more attractive choice for large and public projects that need access to public capital markets.
5. Limitation of liability. Consider the limitation of liability for the participants in each structure. BV and NV provide a limitation of liability for shareholders, which protects their personal assets.
6. Need for a charitable or social component. If your project has a charitable or social purpose, a Stichting structure may be an appropriate choice because it allows for efficient management of funds and transparency of operations.
7. Co-management. If you favour co-management of your project, a Coöperatie structure may be a suitable option as it provides participants with the opportunity to jointly own and manage the business.

By considering these factors and conducting a detailed analysis, you will be able to choose the most suitable fund structure for an ICO in Holland that will help you achieve your goals and ensure the success of your project.

Steps for registering a foundation in the Netherlands

Registering a fund in Holland for an ICO requires careful planning and following a number of legal procedures. Here is a detailed overview of the steps required to successfully register a fund:

Preparatory phase

Legal training

Foundation registration

Once all these steps have been completed, your fund will be registered in the Netherlands and ready to start operations. It is important to follow all legal requirements and ensure transparency in all of your fund's operations.

These steps require careful preparation and understanding of Dutch law. It is recommended that you seek professional legal advice to ensure that you meet all requirements and successfully register your fund.

Post-registration procedures

Once a fund has been successfully registered in Holland for an ICO, a number of post-registration procedures must be followed to ensure full compliance with legal requirements and to facilitate the fund's operational activities.

Opening a corporate bank account

Opening a bank account for a Dutch ICO fund is a necessary step for financial management, operations and, in particular, ICO fundraising.

1. Choosing a bank. Research the various banks offering corporate banking services in Holland and choose one that best suits your fund's needs. Consider factors such as bank fees, availability of online banking, experience with international clients, and special services for startups and cryptocurrency projects.
2. Documentation preparation. Gather the necessary documents, which typically include the foundation's incorporation documents, proof of registration with the commercial register, passports of directors and founders, and a detailed business plan or project description.
3. Applying for an account. Contact your chosen bank to apply for an account. This can be done in person or, in some cases, online.
4. Verification by the bank. The bank will check the documents and may ask for more information about the foundation's activities, funding sources and future plans. This is part of the KYC (Know Your Customer) process.

Upon approval of the application and successful completion of the verification process, the bank will activate the corporate account and the foundation will be able to begin financial activities.

Tax obligations of the fund and investors

If the fund will carry on commercial activities, income from such activities is subject to general taxation. Income derived from commercial activities, including profits from the sale of tokens as part of an ICO, is generally subject to corporate tax at a rate that depends on the size of the profit and the legal form of the fund. Corporation tax is 19% for income up to €200,000 and 25.8% for income over €200,000. VAT is 21%.

Thus, the tax features create a favourable environment for enrolling a Stichting endowment in the Netherlands and employing it as an asset protection tool without additional tax liabilities. However, it is important to consider tax obligations on a general basis when conducting business transactions.