The first part of the series touched on what type of entity would be best for crypto-activity in Malta. Today's article will talk about what is most important for investors in the industry interested in this country - that is, how to conduct an ICO in those conditions without any problems. ICO, or rather VFAO (Virtual Financial Asset Offering - the official name in the VFA Act 2018) is the most popular form of raising funding in the cryptocurrency industry. Despite the name confusingly resembling the IPO (Initial Public Offering) known from stock exchanges, VFAO itself has definitely more in common with a crowdfunding action. The scheme itself is quite simple - the creators of the project "write" their own coin or token, which is a blockchain representation of their assumptions and which can be purchased to support such a project. ICOs have been one of the main battles between the crypto industry and all sorts of authorities over the years - mainly due to the fact that the purchase of the tokens that creators make money on is done using blockchain technology, and this means that it was easy to hide your income and thus not pay any tax on it. Fortunately, in the VFA Act 2018, recently introduced by the Maltese government, the matter of ICOs is very clearly and lucidly described - allowing us to invest without the risk of problems between our entity and the Maltese authorities. The scheme for setting up a VFAO is quite simple and is divided into three phases: "Whitepaper phase" - preparatory phase Waiting period Obtaining the license - issuance phase The first phase of seeking a license to conduct a VFAO under Maltese jurisdiction will be the so-called "whitepaper phase", This is the preparatory phase before applying for a license. As the name suggests, the main part of the preparation will be preparing a whitepaper of your project. Until now the unwritten rule was that every ICO must have such a document. However, the Republic of Malta is the first country, which introduced its official requirement, and with it requirements concerning its content. The first and probably the most important requirement of every project, which will eventually be accepted by MDIA (Malta Digital Innovation Authority), will be so called technology-first approach. This is an ideal tool for deleting all scam-coins before applying for a license. It assumes that the technology contained in the project will be checked by specialists to make sure it meets the assumptions described in the whitepaper. Thus, the projects that promise potential investors "golden mountains", which do not have any coverage in reality will be rejected in the run-up. Apart from a detailed description of the technology contained, an important element is also a detailed description of the assumed financial goals and application. With such prepared whitepaper we apply to VFA Agent. These are law firms and accounting offices (and other professions defined as Company Service Provider) that have received a license to conduct activities related to the registration of cryptocurrency projects. They are the ones who, according to the law, start the first phase of applying for a license. They analyze the submitted whitepaper, help it meet the requirements and submit the project they have approved to the MFSA (Malta Financial Services Authority) - the equivalent of the Ministry of Finance. At this stage, the project must also pass the so-called Financial Instrument Test, which will allow the token to be properly classified. The second phase is the waiting period - it usually lasts from 3 to 4 months and during this period relatively little happens - the MFSA once in a while will make some inquiry or request to meet a given standard, and also sets the date for obtaining a license. This time needs to be spent on setting up a suitable structure to sell tokens that meets the regulations set by the Maltese government. This way, after obtaining the license, we are able to start selling our tokens efficiently. You should also remember about proper accounting of transactions - on some types of ICOs you will have to pay income tax. Our accounting office does not only deal with the registration of companies abroad - one of our main goals is to support the tax settlement of traders and miners. Especially for Bitcoin.pl readers we have prepared a discount -10% on crypto settlement - regardless of the number of transactions! Just contact us (we have many forms of contact) and give code "bitcoinpl" to one of our specialists. Author: Hubert Matecki, TAXO Accounting Office Tags ICO initial coin offering cryptocurrencies company malta company security token offering cryptocurrency company company in malta S
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