We’re physically present and based out of India because that’s where Sanju and I, and the whole team, are based out of. The problem is, the Indian government hasn’t come out and clearly declared what you can and can’t do in the blockchain space.
Having such uncertainty doesn’t create an ideal environment to foster innovation, at least from a legal standpoint. Even if you look at some of the top crypto firms in India, they’ve gone ahead and registered themselves all across the world. Firms like ZebPay have registered themselves in Malta. A few firms are moving to Lithuania, Gibraltar, Singapore and some even moved to the U.S.
We were fairly clear on why we needed to be registered outside, even though the market opportunity may seem appealing - given what you can and can’t do in the market is not really clear and the Reserve Bank of India has basically instructed banks and payment providers not to deal with crypto companies. Maybe if things change, chasing the Indian market makes more sense.
There are certain governments out there who’ve clearly come out and demarcated what can be done and what’s not allowed - those are the best places for us to be based out of because it’s not completely ambiguous. As long as we’re following the parameters that they’ve laid out, and act in complete compliance, we can focus on product innovation and getting the best product and service to the customer.
When we looked at the regions that have come out and have clearly laid out the rules on what is okay what isn’t okay in the blockchain space, a few top countries stood out to us - Gibraltar, Estonia, Malta, the U.S., the Phillippines, Singapore and few more countries in the EU.
Estonia, Malta and Gibraltar
When we ran through each of these options, we saw that there were a few that favored retaining capital in terms of the way the tax was structured, there were a few that favored facilitating dividends, and there were a few that optimized for strictness for businesses to abide by - which in turn made them more trustworthy for external investors. One of the few that were optimized for capital retention was Estonia where - as long as you’re retaining profits earned, you don’t have to pay taxes. That’s extremely good if you’re looking at growing your company over the long term.
There were a few like Malta who would tax you the least based on the capital that you actually dispersed through dividends to the shareholders.
The basic downside of both these places, Malta and Estonia, and few others like the Cayman Islands and Gibraltar - the problem with that is that they’re not very trustworthy financial hubs. When we look at prominent financial hubs of the world, we have New York, London, Hong Kong and Singapore among others. The best banking institutions typically have a very strong presence in these regions. The good thing about being present in these regions is that their compliance is a little more difficult, and because of that there is very little scope for conducting shady businesses. If you’re caught money-laundering, being non-compliant with KYC rules, not making investments within the set parameters of a jurisdiction - you could get into serious trouble.
U.S. and Singapore
From a short term perspective, regions such as Malta and Estonia were extremely appealing because the cost of setting up, as well as compliance, is so low. However, the fact that these regions weren’t inherently trustworthy jurisdictions for investors or consumers to associate themselves with, we chose not to opt for these regions. Instead, we decided to opt for the more trustworthy jurisdictions, i.e. the U.S. and Singapore.
Between the U.S. and Singapore, the U.S. has the advantage of the capital from the west which is probably very sizeable, it’s an inherent disadvantage for us because it’s a 17-hour flight away. Whereas Singapore is a 4-hour flight, and we think it opens up an equal opportunity in terms of giving us access to capital and trust from the east.
That’s why we ended up choosing Singapore, where we are now officially registered.