Selecting the Country of Token Issuance

The country in which tokens are issued significantly impacts regulatory requirements, tax implications, and investor accessibility. The issuer must decide whether to structure the issuance within the same jurisdiction as the asset (domestic SPV/SPC) or through a foreign jurisdiction (offshore SPV/SPC).

Domestic vs. Foreign Token Issuance

Domestic SPV/SPC Issuance

• Suitable when the asset country has clear tokenization regulations and allows security token offerings.

• Aligns with local legal requirements, reducing cross-border complexities.

• May provide tax benefits or investor protection mechanisms.

• Requires compliance with national securities laws and financial regulations.

Foreign SPV/SPC Issuance

• Used when the asset country lacks clear tokenization laws or imposes restrictions on security token offerings.

• Issuers can choose crypto-friendly jurisdictions with clear security token regulations (e.g., BVI, Liechtenstein, Cayman Islands, Gibraltar).

• Offers tax efficiency and global investor accessibility.

• Requires legal agreements to connect the issuing entity to the asset-owning company.

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Why This Step Matters

• Determines securities laws and compliance requirements that apply to the token.

• Impacts tax obligations and reporting for issuers and investors.

• Affects investor participation, as some jurisdictions restrict foreign investors.

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By selecting the right jurisdiction, issuers ensure legal certainty, regulatory approval, and tax efficiency, making the security token offering attractive to investors.

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