Initial Coin Offering in Hong Kong

Bitcoin’s popularity has also inspired the rise of other cryptocurrencies, which in turn lead to the development of the initial coin offering in Hong Kong, or ICOs. This is essentially an online fundraising activity that is used to fund a specific blockchain project.

 

The ICO project may have various degrees of success, however, investors are advised to be informed and wary of potential scams. Our Hong Kong company formation agents describe the process of developing an ICO.

 

 

The initial coin offering takes place when an operator issued digital coins in order to fund a particular project, related to blockchain technology. The author of the funding proposal will describe the right of the individuals who purchase coins via the ICO in a document called the “white-paper” which is explicitly published online.

 

1. the goal of the project: this is the outline of the problem that will be solved by the proposed blockchain or cryptocurrency solution;
2. technical description: a breakdown of the project, which will help show how it will help solve the aforementioned problem;
3. the market analysis: information on how the proposed solution will be received or will fit in the existing marketplace;
4. budget: a well-received component, allowing investors to find out how the project will use the resources gained from the ICO.

 

Investors can have several benefits from entering into an ICO, such as the right to access the new blockchain platform that will be developed as a result of the fund gathering. Moreover, the ICO can come up with different business propositions, not just access to platforms or software.

 

The ICO is accompanied by the so-called “white paper” for transparency reasons and so that investors may make a documented decision. A successful ICO project will depend on reach, credibility and the low-risk of the cryptocurrency trading platform.

 

 

The recent popularity of the initial coin offerings has brought this practice to the attention of the Securities and Futures Commission in Hong Kong. The digital coins are not usually perceived as “securities”, however, under certain circumstances, they may have this quality and thus they will be subject to the securities laws applicable in Hong Kong.

 

Those who engage in various ICO activities are advised to seek legal counseling in order to determine what regulatory requirements apply to a particular case.

 

Our agents who specialize in company registration in Hong Kong can give you further details on the provisions of the Securities and Futures Commission.

 

How to set up a company in Hong Kong that will launch an ICO

• - choose the type of company: the most common business form will be the limited liability company, suitable for the purpose of launching an ICO in Hong Kong;
• - choose the name of the company: the name must be unique and we advise investors to prepare several options that will be verified for availability;
• - prepare and submit the documents: these are the incorporation form, the articles of association, and a notice to the Business Registration Office;
• - confirm the registration: when the company is successfully registered, the Companies Registry will issue the Certificate of Incorporation and the Business Registration Certificate.

• - 8.25% corporate income tax on the first HKD 2 million in assessable profits;
• - 16.5% corporate income tax over the HKD 2 million threshold of assessable profits;
• - unincorporated businesses are subject to lower rates, of 7.5% and 15%.

 

Please contact our Hong Kong company formation experts for assistance in initial coin offerings or if you have other questions related to doing business in Hong Kong.