What do you do when all those you interact with in your business are suddenly made out of your bounds? You search desperately for a place where transactions with your ecosystem are permitted.
That is precisely what actors in India’s blockchain ecosystem – developers, services providers, and other companies – are doing by moving bag and baggage to crypto-friendly destinations or at least seriously considering the option. The migration has been triggered by various moves of the Indian government to ring-fence all things cryptocurrency in the country as a result of which fledgling blockchain players here are looking for more friendly places.
Some even compare it to the brain drain in the dotcom boom that lead to a virtual exodus of topnotch tech professionals to countries with better opportunities. “We are having talented people and companies from the blockchain space move out of India. There are enough countries out there who realise the importance and want to take a lead in the blockchain ecosystem,” says Joel John, an analyst at UK-based Outlier Ventures.
This comes on top of a trend where startups and companies from India anyway find jurisdictions such as Singapore and Ireland attractive for tax, startup funding, and other reasons.
“Companies moving abroad is not a new trend but the regulatory complexities faced by blockchain companies have accelerated it,” says John. “They can easily fly down to a Malta, Singapore or a Cayman Island, set up the company and start working on their product. You rather lead a technology wave than play catch up.”
The product, he added, may still be developed in India even if the company is registered abroad.
The path for ICO projects
There are a few blockchain destinations that are attracting the Indians – each with its own pluses and minuses. Singapore, Estonia, the UK, Switzerland, and Japan are some names that come up in blockchain communities but among them, Estonia seems to be the favourite thanks to the crypto- and tech-friendly regulatory environment there and the ease of doing business.
Ask Abhinav Arora, chief marketing officer at Enkidu, a decentralised collaboration platform being built in Bengaluru. Its parent company Avalon Labs is a Singapore-registered entity.
“We had decided to go the ICO way and for that, the current Indian regulatory setup makes it difficult,” says Arora. Enkidu is looking to register itself in Estonia. “We also thought of Japan but that did not make financial sense to us because of the (taxation) cost involved in liquidating our Ether holdings. We even briefly considered Cayman as an option but Estonia was best suited for our projects especially with the ICO plan.”
ICO, short for initial coin offer, can be thought of as an IPO with minimal regulation and frictionless crowdfunding. A company doing an ICO usually raises money by selling its crypto tokens in exchange for cryptocurrency: BTC or ETH in most cases. But unlike an IPO, an ICO may not entitle the holder to shares or a stake in the issuing company. Instead, the value of the token issued during the ICO increases based on how well the company is doing.
Read More: https://cryptoflash.io/posts/805454
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