Where to Incorporate Your Crypto Business in 2025

Law and Ledger is a news segment focusing on crypto legal news and brought to you by Kelman Law – A law firm focused on digital asset commerce.

The following opinion editorial was written by Alex Forehand and Michael Handelsman for Kelman.Law.

Navigating Crypto Regulations: Where to Incorporate in 2025

Incorporating a crypto business in 2025 involves far more than filing paperwork. The choice of jurisdiction can determine whether a founder enjoys legal clarity and investor trust—or faces regulatory landmines, banking hurdles, and tax headaches. With the United States having chosen to regulate digital assets primarily through enforcement actions rather than comprehensive legislation, more founders are turning to jurisdictions like Singapore, the United Arab Emirates, and various offshore financial centers to launch and scale their ventures.

This article explores some of the most common jurisdictions for crypto incorporation and provides a framework for evaluating which is right for your business model, investor base, and long-term growth strategy.

The United States: Familiar Legal Terrain, With Increasing Clarity Around Tokens

For decades, Delaware has been the jurisdiction of choice for American startups. Its well-developed corporate law, efficient judiciary, and credibility with investors make it a default choice for many businesses—including those in the crypto space. As a result, U.S.-based founders often default to Delaware for perceived legitimacy, especially when seeking venture capital.

For years, the United States was viewed as a hostile environment for crypto ventures. A combination of regulatory ambiguity and aggressive enforcement chilled innovation and pushed many founders to offshore jurisdictions. But 2025 is shaping up to be a turning point.

With the recent passage of the GENIUS Act, Congress has taken its first major step toward codifying a functional framework for digital assets in the United States. The law provides critical definitions for digital commodities and payment tokens, clarifies the jurisdictional boundaries between the SEC and CFTC, and establishes safe harbor provisions for early-stage stablecoin projects. This legislative clarity has been further bolstered by growing bipartisan support for the CLARITY Act, which is making its way through Congress and would provide additional guardrails for token issuance, DAO governance, and decentralized finance protocols.

Meanwhile, the SEC’s tone has shifted notably under its internal Project Crypto initiative, an effort led in part by Commissioners looking to harmonize innovation with investor protection. Rather than regulating through subpoenas and press releases, the agency is showing an increased willingness to engage with founders, offer public guidance, and even pre-clear certain token models.

Despite these positive developments, challenges remain. The patchwork of state-level licensing—especially regimes like New York’s BitLicense—still complicates nationwide operations. And while the SEC’s posture is improving, ambiguity still exists around edge cases like governance tokens, staking models, and tokenized real-world assets.

For U.S.-based founders building infrastructure, blockchain analytics, or tokenless protocols, a Delaware corporation remains a sensible and highly credible choice. Even for projects involving tokens, the tide may finally be turning in favor of staying onshore, particularly for teams willing to build with compliance in mind.

British Virgin Islands and Cayman Islands: Offshore Utility, but Growing Scrutiny

The British Virgin Islands (BVI) and Cayman Islands remain popular choices for incorporating crypto foundations, offshore funds, and treasury management vehicles. These jurisdictions are often used to house the governance layer of a protocol or to act as the legal wrapper for a token sale. They offer low or zero corporate tax, a streamlined incorporation process, and structures that are familiar to international investors and fund administrators.

That said, their utility is not without limitations. Traditional banking services can be difficult to access, and some service providers are increasingly wary of working with entities based in high-risk or lightly regulated jurisdictions. Moreover, U.S. founders must be cautious: offshore incorporation does not eliminate U.S. tax or regulatory obligations. Controlled Foreign Corporation (CFC) rules, PFIC classification, and IRS foreign asset reporting (FBAR, FATCA) all remain in play.

For crypto-native teams building protocol infrastructure or managing a token treasury, the BVI and Cayman Islands can be a useful part of a broader structure—but rarely the entire solution.

Singapore: Regulatory Clarity With an Institutional Edge

Singapore has emerged as one of the most attractive jurisdictions for serious crypto businesses seeking regulatory clarity and institutional credibility. Under the oversight of the Monetary Authority of Singapore (MAS), the country has developed a licensing regime that covers digital payment token services, exchanges, custody providers, and other Web3 infrastructure players.

Incorporating and operating in Singapore comes with several advantages. The country’s legal system is grounded in common law, its regulatory expectations are clearly articulated, and it has established itself as a financial hub with strong connections to the broader Asia-Pacific market. Institutional investors often view Singaporean entities as credible and well-governed.

MAS, however, is not permissive—it is proactive. License applications are document-intensive, the process can take months, and applicants must meet strict anti-money laundering and consumer protection requirements. The cost of compliance is high, and ongoing obligations are non-trivial. But for well-funded teams aiming to build lasting infrastructure, the clarity Singapore offers can be well worth the price.

United Arab Emirates: The Emerging Powerhouse

The UAE, particularly through its financial free zones in Dubai and Abu Dhabi, is rapidly positioning itself as a global crypto hub. Dubai’s Virtual Assets Regulatory Authority (VARA) and Abu Dhabi Global Market (ADGM) have both introduced dedicated frameworks for digital asset businesses, including licensing regimes for exchanges, custodians, and token issuers.

One of the UAE’s most attractive features is the degree of governmental support for blockchain innovation. Regulatory authorities actively collaborate with industry participants, and there is growing access to fiat banking within the region. The UAE also benefits from its strategic geographic location, bridging the Middle East, Asia, and Africa.

Still, companies considering the UAE must understand its unique legal environment. The country’s laws are influenced by both civil law and Sharia principles, and certain corporate formalities and residency requirements may surprise founders used to U.S. or EU-style regulations. Additionally, while the UAE’s crypto policies are progressive, the dispute resolution infrastructure is still maturing.

For teams seeking to serve the MENA region or establish a globally recognized headquarters in a forward-looking jurisdiction, the UAE represents a promising—though still developing—option.

Switzerland and Liechtenstein: High-End Solutions for High-Compliance Projects

Switzerland and Liechtenstein offer arguably the most mature regulatory regimes in the world for digital assets. Switzerland’s “Crypto Valley” in Zug has attracted thousands of token projects and foundations thanks to the country’s DLT-friendly laws, and Liechtenstein’s Token and Trusted Technology (TT) Service Provider Act (TVTG) provides a robust legal framework for tokenized assets.

These jurisdictions offer sophisticated legal infrastructure, strong data protection laws, and favorable banking relationships—especially for businesses that meet high compliance standards. They are particularly well-suited for governance foundations, token structuring, and institutional-facing services.

The downside is cost. Legal and administrative services are expensive, incorporation can take longer, and service providers may require a high level of documentation and due diligence. For small startups or fast-moving DeFi teams, the Swiss and Liechtenstein regimes may be too burdensome. But for well-capitalized projects prioritizing longevity and legal certainty, they are hard to beat.

Key Factors to Consider When Choosing a Jurisdiction

The optimal jurisdiction for a crypto business depends on a variety of factors, including the business model, target user base, regulatory tolerance, and investor expectations. Exchanges, wallets, and custodians will have very different needs than DAOs or protocol governance entities. Token issuance introduces a host of securities, tax, and AML considerations. And founders must consider where they will be operating from—physically and digitally.

Banking access, intellectual property protection, tax reporting, dispute resolution mechanisms, and even public relations optics all play a role in the decision. What may be acceptable for a governance foundation in the Cayman Islands could be untenable for a consumer-facing wallet company trying to integrate with regulated financial institutions.

U.S. Founders Beware: Offshore Incorporation Doesn’t Eliminate U.S. Risk

A persistent misconception among founders is that moving a company offshore will shield it from U.S. regulatory enforcement. This is not the case. U.S. agencies such as the SEC, CFTC, and FinCEN frequently assert jurisdiction over foreign entities that have U.S.-based founders, employees, investors, or users. Marketing a token to U.S. investors, listing on a U.S.-accessible platform, or even using infrastructure located in the U.S. can trigger U.S. enforcement.

Moreover, U.S. citizens and residents are subject to extensive tax and reporting obligations with respect to foreign entities, including Form 5471 for CFCs and FBAR disclosures for foreign financial accounts. Failure to comply with these requirements can result in steep civil and criminal penalties.

Incorporating abroad can reduce certain types of risk—but it is not a silver bullet.

Conclusion: There Is No One-Size-Fits-All Answer

There is no perfect jurisdiction for every crypto venture. What matters is finding the right fit for your specific business, risk profile, and growth strategy. Whether you’re launching a tokenized protocol, building out an exchange, or simply offering blockchain infrastructure to traditional financial institutions, the choice of where to incorporate will shape your regulatory future.

At Kelman PLLC, we help founders structure their businesses for long-term success—whether that means staying in Delaware, moving offshore, or designing a hybrid structure that balances risk, compliance, and innovation.

Staying informed and compliant in this evolving landscape is more critical than ever. Whether you are an investor, entrepreneur, or business involved in cryptocurrency, our team is here. We provide the legal counsel needed to navigate these exciting developments. If you believe we can assist, schedule a consultation here.

This article originally appeared at Kelman.law.