It’s been nice being able to say “we’re registered on Ethereum” but I think it’s unfortunately time we made an actual legal wrapper & play by at least some of the rules, because:
- The whole thing of all members being held liable for the DAO’s actions if there’s no entity
- Doing a proper fundraise requires having a legal entity
General recommendations in the DAO space over the past few years have been Wyoming & Delaware but the regulatory landscape in the US seems to have become increasingly hostile towards crypto over the past months. This uncertainty + the cost of doing business in the US (expensive lawyers etc.) mean we’re probably better off starting a legal entity elsewhere.
Other suggestions have been Puerto Rico, Cayman Islands & idk. To me personally, it seems these kinds of jurisdictions are generally chosen by shady projects that seek to avoid US regulation & taxes.
This leads us to the suggestion of doing in Croatia, which I am obviously biased towards because I am from Croatia but I also definitely think its good to have someone living in the country we choose. Being based here means I know more, got connections & am only a call or a few away from experts, seasoned entrepreneurs, the regulating institutions & the government itself.
Why Croatia
The Croatian blockchain association (UBIK) has a few members from regulating institutions & is on good terms with regulators. They’ve been organizing panels & sending suggestions to the national bank, financial regulation institution, ministry of the interior etc. - most of which have been accepted.
I haven’t checked but apparently a lot of crypto businesses previously based in Portugal or Estonia have been moving their headquarters to Croatia because of favorable regulations, low taxes & general ease of doing business.
Reasons for doing it in Croatia:
- No taxes if no profit (meaning if all income goes towards covering expenses & there’s no extra)
- 10% corporate tax on profit (compared to ~20% in the US, Portugal, Estonia & a lot of others)
- Legal services cost ~1/10 of what they cost in eg. US
- Accessbility & connections to experts & regulators
But I’m no lawyer nor any kind of expert on this sort of stuff, so don’t take my word for it.
Proposal
Start a legal entity in Croatia & get it over with.
I’ve already talked to a lawyer with a law firm interested in doing this for us. I’ve known him since 2016, he’s a well known name on the Croatian crypto scene & the president of the Croatian blockchain association.
Their offer:
- A 6-month contract for doing everything we need in terms of legalities
- Analyzing tokenomics & the fundraise, coming up with a legal structure etc.
- All the paperwork & bureaucracy associated with starting an LLC, around the token etc.
- Unlimited number of advisory hours for any questions & legal support we might need
Their demand:
- 1,600€/month + VAT (50% of which can be paid in Seeds)
- A to-be-determined number of tokens earmarked for advisors
Questions & Alternative proposals?
I will leave this thread open for a week before putting it up for vote, so anybody can ask questions or offer alternative pathways for doing it (it seems we got consensus its needed, just no consensus on where).