The Cayman Islands has emerged as a prominent player in the digital revolution, with a significant increase in the number of Web3 companies established in recent years. If the current pace of development is maintained and legislation continues to be optimized, the expansion will be limitless. This article explores the key factors driving this growth and explains why the region is attractive to businesses venturing into the Web3 and virtual asset space.
For over 30 years, the Cayman Islands has been a leading jurisdiction for offshore investment funds, including mutual funds and private equity funds. Its outstanding reputation is attributed to several factors:
– Innovative legislative support
– Absence of taxes and exchange controls
– Long-standing presence of mature and professional service providers
These ensure responsible supervision and regulation for investors, providing a safe and trusted environment.
In the vibrant Web3 field, the Cayman Islands stands out with its forward-thinking legislation, particularly the Virtual Asset Service Providers Act (VASPA). This innovative law has propelled the growth of Web3, cryptocurrencies, and other virtual asset companies. VASPA establishes a rigorous regulatory framework overseen by the Cayman Islands Monetary Authority (CIMA), providing these enterprises with a secure and transparent growth environment.
Just this month, the dYdX Foundation announced on the X platform that the dYdX community has voted to support the transformation of the dYdX Operations Trust into a Cayman Islands foundation company, with a final approval rate of 93.1%.
Their next steps include:
– Establishing the dYdX Operations Foundation (DOF) as a foundation company in the Cayman Islands and appointing key officers
– Drafting the memorandum and articles of association for DOF and granting effective control to the dYdX community through dYdX consensus
– Ending the trust term, thereby terminating DOT
– The trustee will need to carry out relevant transfer operations, such as multi-signature, domain, account, and contract transfers.
Additionally, the establishment of Special Economic Zones (SEZs) like the Cayman Enterprise City (CEC) and the introduction of the Special Economic Zone Law have also provided momentum for Web3 development in the Cayman Islands.
What is the ideal structure for setting up Web3 companies?
Choosing the right company structure is crucial when establishing Web3, DAO, or DeFi enterprises, and the Cayman Islands offers various flexible options. Here are the three most popular structures for Cayman Islands Web3 companies:
1. Foundation Company: Foundation companies are the preferred choice for DAOs, Web3, and DeFi enterprises. Key reasons for choosing this structure include:
– Liability protection: Foundation companies provide strong protection against personal liability.
– Flexibility of trusts: This structure offers adjustable trusts, providing a flexible framework for operations.
– Absence of shareholders: Unlike traditional companies, foundation companies do not have shareholders, supporting a more decentralized operating model.
– Focus on purpose: Foundation companies prioritize their defined purpose, aligning with the unique goals and functions of Web3 enterprises.
– Exempted Limited Liability Companies: Many Web3 and virtual asset companies choose to establish Exempted Limited Liability Companies as token issuers because it is a tax-neutral tool. Additionally, Special Economic Zone companies in the Cayman Islands offer specific advantages as exempted limited liability companies formed within the SEZ.
2. Funds: The Cayman Islands is a jurisdiction for establishing various regulated mutual funds and private equity funds, which are suitable for Web3 and blockchain applications.
– Mutual Funds: Registered mutual funds in the Cayman Islands, subject to regulation by the Cayman Islands Monetary Authority (CIMA), have a minimum initial equity interest that investors can purchase of $100,000 or have their equity interests listed on approved stock exchanges.
– Private Equity Funds: Private funds are regulated under the Private Funds Law and operate as closed-end funds.
In summary, the Cayman Islands continues to maintain its leading position in the expansion of Web3 and virtual assets. Whether through foundation companies, diverse fund structures, or the advantages provided by Special Economic Zones, strategically choosing the appropriate legal framework makes the Cayman Islands an ideal location for establishing and nurturing Web3, DAOs, and DeFi enterprises. For those seeking a dynamic environment and a legal infrastructure conducive to digital innovation, the Cayman Islands is undoubtedly a future hotspot for Web3.
Tags:
DAO, dYdX, WEB3, Trust, Hong Kong
Source Link:
https://mp.weixin.qq.com/s?__biz=MzkxMjI5ODA0OQ==∣=2247485148&idx=1&sn=56f1…
Note: The views expressed in this article represent the author’s opinions and do not constitute investment advice.
Original Article Link: https://www.bitpush.news/articles/6631548
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