Assess Domestic Jurisdiction First

The most desirable option is to use domestic jurisdiction instead of offshore, i.e. a jurisdiction where the asset is located. It is a favorable option for three reasons. Firstly, the company creation and servicing in domestic jurisdiction will be cheaper than the creation of additional foreign entities. Secondly, dealing with corporate legislation in only one jurisdiction will simplify the reporting and handling of transactions. Thirdly, using domestic jurisdiction is also an advantage, as you do not lose on double taxation and additional transfer fees in case of transferring funds between your legal entities.

Therefore, it's advisalbe to start a jurisdiction selection process from assessing the viability of a domestic SPV, and proceeding with the assessment of others only if using local company is unfeasible.

To assess the feasibility of using a local token-issuing company, utilize the following checklist:

• Are crypto-assets legal in a selected jurisdiction?

• Can legally enforceable economic claims on the issuing company be represented in the form of tokens?

• Are tokenized equity interests easily transferable under the local corporate law?

• Does issuer of security tokens need a virtual asset or crypto asset authorization?

• Are there currency exchange or other limitations related to receiving foreign cash inflows?

It is still possible to use a local SPV if some of these limitations are present, but generally it's advisable that answer to all the points in the checklist is favourable.