Utility token issuance in Thailand

The main regulation that governs virtual assets in Thailand is the Emergency Decree on Digital Asset Businesses, B.E. 2561 (2018). The Regulatory Authority - is Thai Security and Exchange Commision (SEC).

The SEC's Notification No. GorJor. 15/2561 Re: Public Offering of Digital Tokens (and its amendments) provides a definition ofUtility Tokens. Thus, Utility Tokens are electronic units created in a digital system or network that the holder can exchange for goods or services or any other specific right as agreed upon by the issuer and the holder.

The SEC proposed to divide Utility tokens into two groups and to introduce different issuance procedures, taking into account the characteristics of each group:

• Group 1.
• Group 2.

Utility tokens of Group 1 have the following characteristics:

• “issued for consumption purposes, such as digital vouchers, digital gifts or points, concert ticket redemption tokens, loyalty points and non-fungible tokens ("NFTs") ; or
• issued in the form of a digital certificate or representation of rights, such as carbon credits, renewable energy certificates, digital transcripts, title deeds, medical certificates and digital bills”.

Group 1 Utility tokens must be non-financial products and must have a designated channel or trading platform that has been made available for exchange for goods, services or specific rights offered by the issuer.

Utility tokens of Group 2 have the following characteristics:

• tokens that grant the holder the right to access underlying products or services provided using distributed ledger technology (" DLT ") or other systems;
• exchange tokens that will be used to obtain discounts on trading commissions or to upgrade membership levels;
• governance tokens that provide the token holder with voting rights on decentralised funding (DeFi), centralised funding (CeFi) or GameFi; or
• project tokens that provide services related to digital assets through CeFi.

The procedure for approving the issuance of Group 1 and Group 2 Utility tokens is different. Due to the fact that Group 2 Utility tokens have higher risk applications, their issuance procedure is a bit stricter. The process of issuance Utility tokens of Group 1 in Thailand described at the scheme:

• Establishment of a company in the form of a limited liability company or a public limited liability company
• Creation of technical documentation, preparation of token structure
• Selecting an ICO portal that is licensed by the SEC to offer digital tokens
• Token offering on the ICO portal resource

During issuance Group 1 Utility tokens it's required involving ICO portals. The ICO Portal is a provider of an electronic system to facilitate the offering of issued digital tokens. It is the responsibility of the ICO Portal to conduct due diligence on the characteristics of the digital tokens offered and the qualifications of the issuer, and to ensure the completeness and accuracy of the information contained in registration statements, draft prospectus or any other information to be disclosed through the portal.

The process of issuance Utility tokens of Group 2 in Thailand described at the scheme:

• Establishment of a company in the form of a limited liability company or a public limited liability company
• Creation of technical documentation, preparation of token structure
• Prepare a draft prospectus and all necessary documents for filing a digital token offering statement
• Filing an application and related documents to obtain SEC approval
• The SEC verifies and ascertains the information and reports any problematic issues to the applicant for clarification within a certain timeframe
• The applicant shall clarify the issues of concern within a specified time period set by the SEC (not to exceed 60 days)
• The SEC will report its findings within 30 days of the date it receives the applicant's written explanation of the issues of concern

Utility token issuance in Dubai

The Virtual Assets Regulatory Authority ("VARA") has approved a system of regulations that relate to virtual assets. Thus, the entire field of virtual assets in Dubai is regulated by the VARA, including the issuance of tokens.

In accordance with the Virtual Asset Issuance Rulebook, Virtual Assets issues in the Emirates are categorized to 3 types:

• Category 1 token
• Category 2 token
• Other tokens

It should be noted that VARA has no specific definition of Utility token.

Category 1 token is Fiat-Referenced Virtual Assets [FRVAs], defined as types of Virtual Assets that purport to maintain a stable value in relation to the value of one or more fiat currencies, but do not have legal tender status in any jurisdiction, as more fully defined in the FRVA Rules. In the UAE, it is not possible to issue FRVAs on AEDs as this is the exclusive domain of the National Bank.

Category 2 token is all issuances which do not constitute a Category issuance, and:

• by or involving Designated Non-Financial Businesses and Professions (DNFBPs), which include: Dealers in precious metals or precious stones; Law firms, notary firms, Accounting, audit, or insolvency firms; Single Family Offices etc.
• which satisfy any of the following:
• a single transaction exceeding AED 40,000, or the equivalent amount in another fiat currency or Virtual Assets
• offered to 150 entities or more
• over a period of 12 months, starting with the beginning of the issuance, the total consideration, direct or indirect benefit, accrued to the Issuer exceeds AED 2,000,000

Other tokens are types of tokens that do not fall into Categories 1 and 2. Other tokens must comply with all rules contained in the Virtual Asset Issuance Rulebook that relate to General requirements (Honesty and fairness, Thoroughness, Capabilities and resources), Whitepapaer and risk disclosure, Compliance obligations.

The issuance of Utility tokens in Dubai is possible using Category 2 tokens and Other tokens. The choice of a specific category of tokens is possible after a full understanding of the business model to be implemented. To issue Category 2 tokens, an Approval of the Issuer must be obtained from VARA.

The issuance process for the Category 2 Token in Dubai

• Company formation
• Submitting an application to VARA with all necessary documents and policies
• VARA checks the submitted documents and reports any problematic issues to the applicant for clarifion within a certain timeframe (if necessary)
• The applicant clarifies problematic issues within a spesific timeframe set by VARA
• Issuance of tokens

No additional approval from VARA is required for the issuance of Other type of tokens (which do not fall into categories 1 and 2)-no additional approval from VARA is required. However, such tokens must still comply with the requirements of Sections 2-4 of the Virtual Asset Issuance Rulebook.

Utility token issuance in Europe according to the MiCA

The new European Markets in Crypto-Assets (MiCA) Regulation defines the following categories of tokens and divides them into three types, which should be distinguished from one another and subject to different requirements depending on the risks they entail.

• The first type is “e-money tokens” which consists of crypto-assets that aim to stabilise their value by referencing only one official currency. Like electronic money, such crypto-assets are electronic surrogates for coins and banknotes and are likely to be used for making payments.
• The second type of crypto-assets concerns “asset-referenced tokens”, which aim to stabilise their value by referencing another value or right, or combination thereof, including one or several official currencies. That second type covers all other crypto-assets, other than e-money tokens, whose value is backed by assets.
• The third type consists of crypto-assets other than asset-referenced tokens and e-money tokens, and covers a wide variety of crypto-assets, including utility tokens.

In accordance with the MiCA “utility token” means a type of crypto-asset that is only intended to provide access to a good or a service supplied by its issuer.

MiCA prohibits the offering to the public of crypto-assets other than asset-referenced tokens and e-money tokens, unless the issuer:

• is a legal person in European Union
• has drawn up a crypto-asset white paper, notified and published this white paper in accordance with MiCA
• has drafted and published the marketing communications, if any, in respect of that crypto-asset in accordance with MiCA
• complies with the requirements for offerors laid down in Article 14

The requirements regarding white paper and publishing the marketing communications do not apply if:

• an offer to fewer than 150 natural or legal persons
• over a period of 12 months, starting with the beginning of the offer, the total consideration of an offer to the public of a crypto-asset in the European Union does not exceed EUR 1 000 000
• an offer of a crypto-asset addressed solely to qualified investors where the crypto-asset can only be held by such qualified investors

The above mentioned regulatory requirements doesn't apply to offers to the public of crypto-assets other than asset-referenced tokens or e-money tokens where any of the following apply:

• the crypto-asset is offered for free
• the crypto-asset is automatically created as a reward for the maintenance of the distributed ledger or the validation of transactions
• the offer concerns a utility token providing access to a good or service that exists or is in operation
• the holder of the crypto-asset has the right to use it only in exchange for goods and services in a limited network of merchants with contractual arrangements with the offeror

In accordance with the stipulations for white paper registration outlined in MiCA, it is not obligatory for an Issuer to obtain approval prior to publication. Instead, the white paper must be made available on the Issuer's website. This regulatory approach represents a forward-thinking paradigm shift and is poised to establish itself as the leading regulatory framework for crypto-assets.

Utility token issuance in the United Kingdom

In the United Kingdom Utility tokens are defined as cryptoassets which provide digital access to a specific service or application (e.g. digital advertising or digital file storage) and use a technology such as DLT to support the recording or storage of data. They do not provide the rights or features associated with a security token (e.g. share or ownership rights), and do not function as a means of payment – though they can be traded on cryptoasset trading venues for investment purposes.

Regarding the rules for issuing Utility tokens, it is predicted that they will not be subject to the requirements that are foreseen for regulated financial activities, but only if they do not accommodate the characteristics of other instruments (e.g. securitisation tokens).

At the same time, new rules regarding the advertising of cryptoassets will be applied when issuing Utility tokens, according to the Finalised guidance on financial promotions on social media.

Security token issuance in Europe

The new European Markets in Crypto-Assets (MiCA) Regulation has no specific regulation for Security tokens. It means that security token offering (STO) should be conducted in accordance with EU financial legislation. In Europe Security tokens are mostly classified as transferable securities and as a result are regulated by Markets in Financial Instruments Directive (MiFID II) and the EU Prospectus Regulation 2017/1129 (Prospectus Regulation). To STO, the issuer must prepare and publish a prospectus and obtain all necessary authorisations. A prospectus is a large legal document that includes all the information required for the issuance of a securitisation token.

Despite such strict rules there are a large number of exceptions, for example:

• the Prospectus Regulations do not apply to an offer of securities to the public with a total consideration in the European Union of less than EUR 1 000 000, which shall be calculated over a period of 12 months;
• the obligation to publish a prospectus shall not apply to any of the following types of offers of securities to the public:
• an offer of securities addressed solely to qualified investors;
• an offer of securities addressed to fewer than 150 natural or legal persons (other than qualified investors) per each state in European Union;
• an offer of securities whose denomination per unit amounts to at least EUR 100 000;
• an offer of securities addressed to investors who acquire securities for a total consideration of at least EUR 100 000 per investor, for each separate offer;
• other cases.

In addition, the Prospectus Regulations also provide that Member State of EU may decide to exempt offers of securities to the public from the obligation to publish a prospectus provided that he total consideration of each such offer in the European Union is less than a monetary amount calculated over a period of 12 months which shall not exceed EUR 8 000 000. Thus, EU Member States can set their exemption limits from prospectus publication at national level.

In the context of tokenization of assets we can pick up the Markets in Crypto-Assets (MiCA) Regulation and following type of the tokens:

• Crypto-assets concerns “asset-referenced tokens”, which aim to stabilise their value by referencing another value or right, or combination thereof, including one or several official currencies. That second type covers all other crypto-assets, other than e-money tokens, whose value is backed by assets.
• In order to issue this category of tokens, it is also necessary to go through the authorisation procedure, but here too there are no exceptions. Namely, an offer to the public can be made without authorization if:
• over a period of 12 months, calculated at the end of each calendar day, the average outstanding value of the asset-referenced token issued by an issuer never exceeds EUR 5 000 000, or the equivalent amount in another official currency, and the issuer is not linked to a network of other exempt issuers; or
• issuer never exceeds EUR 5 000 000, or the equivalent amount in another official currency, and the issuer is not linked to a network of other exempt issuers; or
• the offer to the public of the asset-referenced token is addressed solely to qualified investors and the asset-referenced token can only be held by such qualified investors.

Security token issuance in the United States of America

Securities offered or sold in the U.S. must be registered with the SEC, unless the securities or the offering falls within an exemption from registration. Foreign companies may register their securities with the SEC. But a full SEC registration requires a significant amount of time and resources, making it generally infeasible for private issuers, including issuers of preferred share tokens. Luckily, the Securities Act provides several registration exemptions that permit issuers to offer and sell securities without undertaking this burden.

Among the exemptions are the following:

• Regulation A (T1 and T2);
• Regulation D (506b);
• Regulation D (506c);
• Regulation S;
• Regulation CF.

Regulation A (T1 and T2)

Regulation A is an exemption from registration for public offerings. Regulation A has two offering tiers: Tier 1 and Tier 2. In Tier 1, a company can raise a maximum of $20 million within a year. The company must submit offering statements to the SEC and get approval from state regulators where it intends to sell the securities. Although there are no ongoing reporting obligations, the company must provide a final report on the offering.

Tier 2 allows companies to raise up to $75 million in a year. These companies must furnish audited financial statements and regularly file reports, including a final status report. Unlike Tier 1, Tier 2 issuers don't need to register with state securities regulators, but they still need to submit their offering to the SEC. Additionally, Tier 2 offerings come with extra requirements, such as restricting the amount non-accredited investors can invest in them.

Regulation D (506b)

Although the exemptions under Regulation D permit the sale of securities to individuals located in the United States, generally those individuals need to be “accredited investors.” Under Regulation D, if the sale is to be generally advertised to the public, the issuer has an obligation to verify that all purchasers are accredited by requiring them to provide documentation evidencing they qualify as such, which can be a costly and cumbersome process. In simple words, general partnerships can raise an unlimited amount of money from an unlimited number of accredited investors and as many as 35 non-accredited investors, as long as they do not publicly advertise or solicit investments for the fund. However it is not allowed to take on non-accredited investors without offering the same disclosure documents typically required under Regulation A of U.S. securities laws. To state that the firm is raising capital in a 506(b) offering, a firm simply checks the 506(b) option when it completes its Form D notice, the filing that confirms which exemption the fund is claiming. The SEC requires Form D to be filed within 15 days of the first close.

Regulation D (506c)

Rule 506(c) permits issuers to broadly solicit and generally advertise an offering, provided that:

• all purchasers in the offering are accredited investors;
• the issuer takes reasonable steps to verify purchasers’ accredited investor status; and
• certain other conditions in Regulation D are satisfied.

In short, accredited investors are eligible to invest in 506(c) offerings, but unlike with the 506(b) exemption, the fund’s Partnership or the firm must take “reasonable steps to verify” that the security purchasers are accredited or hire a third party to perform the verification. Firms can publicly market (advertise) their capital-raising offer to a larger investor base, beyond just one-on-one conversations and emails within their personal and professional networks.

Regulation S

Regulation S, which was adopted by the SEC in 1990, provides that offers and sales of securities that occur outside of the United States are exempt from the registration requirements of Section 5 of the Securities Act of 1933. The rule under (Regulation S) is referred to as Offshore Offers and Sales, and offers an exemption for qualifying foreign offerings made by U.S. companies. In simple words, Regulation S is a registration exemption which allows securities (or security tokens) only to be sold to non-US investors (accredited or unaccredited) exclusively outside of the United States.

Simply saying, for token issuers who wish to sell their token to nonaccredited investors, Regulation S provides a safe harbor from registration so long as the offer and sale of securities occur solely outside the United States (whether the buyers are U.S. or foreign investors). Otherwise, the issuers will be subject to SEC regulation and enforcement.

However, issuers can benefit from Regulation S by complying with two basic conditions:

• the offer and sale of the securities must be made in an offshore transaction, meaning, the offer to buy must not have been made to a person in the United States, and either the buyer is, or is reasonably believed to be, physically located outside the United States, or the transaction is executed on an offshore market.
• there can be no “directed selling efforts” in or into the United States of the securities offered under Regulation S.

CF Regulation

CF Regulation relates to Crowdfunding. For CF regulation applies following rules:

• All transactions under Regulation Crowdfunding must exclusively occur online, facilitated by an intermediary registered with the SEC, which could be either a broker-dealer or a funding portal. Companies are permitted to raise up to a maximum aggregate amount of $5 million through crowdfunding offerings within a span of 12 months.
• There are limits placed on the amount individual non-accredited investors can contribute across various crowdfunding opportunities within a one-year period. Full disclosure of information is mandated in filings with the Commission, as well as to investors and the intermediary overseeing the offering.

In addition, securities procured through crowdfunding transactions generally have a lock-up period of one year, during which they cannot be resold.

European Model

The tokenisation business models that we are building cannot reach their full potential if they operate within a single country. Thus, we would like to introduce you to the "Switzerland-Lithuania-Thailand model" that we have created.

Key points:

• Switzerland currently does not have a special license to sell certain types of jewelry, and only AML rules are applicable. Hence, in our model Switzerland is used as an independent trading platform for jewellery or precious metals, i.e. a platform where public offers to buy and sell jewelry are placed.
• For the purpose of cryptoprocessing, every European VASP can be used. The reason for using a separate cryptocurrency processing company is to escape the complex regulation in Switzerland and use a more straightforward jurisdiction to set up a VASP.
• Thailand used to be a physical shop for a jewelry. That is why we were required to keep the country in the model. To confirm the storage agreement, the Thailand company draws up and delivers an NFT to the customer.

The core of the model lies in the following:

• Establishment of companies in Switzerland and Thailand, VASP in Europe.
• Switzerland as Marketplace Operator: developing technical documentation for Swiss marketplace (e.g. website legal documents, NFT Marketplace Rules, all types of legal agreement for ensuring necessary platform`s functionality, KYC questionnaire etc.).
• EU VASP as Crypto Processing Operator: legal support includes at least application for VASP, AML Policies, Agreements with Swiss and Thai companies.
• Thailand store as Seller of jewelry.

Dubai Model

We also developed a "Dubai-Dubai-Thailand model", which is oriented towards the UAE market.

Key points:

• There were two companies in Dubai - the first was used as a trading platform and was required to obtain a license to trade in precious metals, and the second one was a company with a VARA Exchange Services license and was used to provide cryptocurrency processing services.
• As a local regulator, VARA recognises two categories of utility tokens, which are classified into Category 1 (financial), and Category 2 (non-financial). There is no explicit regulation of NFTs. However, NFTs can be allocated to Category 2 of tokens when one of the additional necessary conditions is met (e.g. one transaction exceeds AED 40,000 ($10,890), is offered to more than 150 persons, etc.).

The core of the model lies in the following:

• Establishment of 2 companies in Dubai and 1 in Thailand.
• Dubai as Marketplace Operator: developing technical documentation for Dubai marketplace (e.g. website legal documents, NFT Marketplace Rules, all types of legal agreement for ensuring necessary platform`s functionality, KYC questionnaire etc.).
• Dubai company with VARA license as Crypto Processing Operator: legal support includes at least application for VASP, AML Policies, entering into Agreements with partner companies.
• Thailand store - Seller of jewelry.

Thai Model

Our other business model for NFT-tokenization of a real-world object has been developed as the "Thai model".

Key points:

• Thai Emergency Decree on Digital Asset Businesses, B.E. 2561 (2018) offers a wide distinction of digital assets, which means cryptocurrency and digital token. In turn, digital token can be Utility or Investment one. Regulator - Securities and Exchange Commission (SEC).
• After SEC Public Hearing, it was proposed to create 2 Groups of Utility tokens in the beginning of 2023. If any token is issued as a digital certificate or representation of rights, such as documents confirming ownership rights, then the token is classified as Group 1 Utility tokens, which covers our case.
• Group 1 Utility tokens are exempt from offering requirements, meaning that the issuer can issue Utility Tokens Group 1 without obtaining prior approval from the SEC, and can be NFT.
• In result, for our client's business, it fitted into Group 1 Utility token category, as it aligned with the key rule of not granting additional rights to the owner beyond recording real-world object history.

The core of the model lies in the following:

• Establishment of a company in Thailand.
• Creation of technical documentation, preparation of token structure.
• Selecting an ICO portal that is licensed by the SEC to offer digital tokens.
• Token offering on the ICO portal resource.

Tokenization of Vehicles in Germany

In an innovative leap forward, our firm had the privilege of working on a model for the tokenization of vehicles in Germany. This was made possible through the Law on Electronic Securities (Gesetz zur Einführung elektronischer Wertpapiere), a progressive legislation that embraces the use of Distributed Ledger Technology (DLT) for the issuance of bearer bonds.

The Law on Electronic Securities marks a significant stride in the legal domain, establishing a robust legal framework that facilitates the trading rights via electronic securities registries. Furthermore, it introduces a novel category of license specifically tailored for managing registers of cryptocurrency securities, thereby laying the groundwork for a new era of financial transactions.

In Germany, the tokenization model can be implemented through the issuance of regular company shares (preferably GmbH, limited partnership, or cooperative). Tokenized shares are entered into an electronic cryptocurrency registry, after which they acquire the status of a registered security, the owners of which can freely utilize the full potential of the token. When implementing the business model according to German legislation, token registration is mandatory.

The essence of the model is as follows:

• It is necessary to establish a German company.
• The company forms its share capital through assets (such as a car).
• The company tokenizes its shares by registering them as electronic securities.
• The electronic securities are distributed among investors.
• Investors make decisions regarding the car and receive income depending on the number of electronic securities (tokens) they hold.

Tokenization of Vehicles in Liechtenstein

Another well-worked model for such a vehicle can be realized in Liechtenstein. This model is based on the Token and Trusted Technology Service Providers Act (TVTG). This law applies to all providers of trusted technology services, who generate or issue tokens in Liechtenstein, or when the parties involved in token transactions directly envisage its application.

According to the TVTG, trusted technologies are technologies that ensure the integrity of tokens, clear assignment of tokens to a trusted technology identifier, and token transfer. Tokens, in turn, are defined as information within the trusted technology system that may represent claims or rights, ownership rights, or other absolute and relative rights and may be assigned one or more trusted technology identifiers.

In Liechtenstein, authorization as a Trusted Technology Service Provider is mandatory for token issuance.

The essence of the model is as follows:

• It is necessary to establish a company in Liechtenstein.
• The company must undergo registration and authorization as a Trustee Technologies Service Provider.
• The company owns vehicles and issues a certain number of tokens that confirm ownership rights to a specific vehicle.
• Investors acquire tokens and make decisions regarding the vehicles and receive income based on the number of tokens they own.

Real Estate Tokenization in Dubai

One of the projects was realization of real estate tokenization in Dubai. At the time, Real Estate Regulatory Authority forbid more than four investors in one real estate object. We offered our client perfect solution - every object will be owned and managed by Special Purpose Vehicle (SPV). SPV is a legal entity which owns real estate. So every token represents your shares in such a SPV. Then SPV hires special manager to make sure that property managed in the right way to maximize revenues from the property. Using modern and convenient platform every person can be shareholder and make money by receiving dividends.

During the investment period, in the event of a sharp change in market conditions, the manager raises the issue of selling the property. The average investment period is 3-5 years, after which, at the end of the investment period, the property will be sold and the investor's share of the proceeds from the sale (after deducting all relevant transaction costs) will be distributed among all investors in accordance with their ownership of the SPV (number of shares). At this point, the user's investment is considered redeemed (at profit or loss) and the SPV will subsequently be liquidated.

The essence of the Dubai model is as follows:

• It is necessary to establish a Dubai company.
• Company must have a license from Dubai Financial Services Authority (DFSA).
• No person can hold more than 33% of one real estate object.
• Users shall surpass strict AML/CFT procedures.
• Investors make decisions regarding the property and receive income depending on the number of tokens they hold.

Real Estate Tokenization in USA

Manimama stands as a long-term and thrusted legal advisor of the fabulous property tokenization platform Binaryx. This is a marketplace where users can buy and sell their property tokens. Tokenization is a process of transferring ownership of real estate to blockchain. Each user can view and buy the objects that are already available for sale and/or put up his own fraction of tokenized property for sale. Data on the Marketplace comes from the blockchain and a system of oracles, providing users with all the necessary and up-to-date information, including ratings, historical performance, and expected returns of each tokenized property.

Any holder of property tokens can easily sell his tokens to other users on the Marketplace. Tokens are member units of a specific legal entity formed as a decentralized autonomous organization (DAO). This is a form of organization in which coordination is carried out without centralized control but using some automated algorithms (such as those implemented in smart contracts). Token holders will become the owners of the property owned by their DAO LLC, which has the property's title deed registered to it. DAO LLC has a separate property ownership and legal structure which protects members and holders of tokens.

Such business may operate in accordance with the SF0038 law, adopted in the state of Wyoming, USA, in 2021. It allows for the creation of companies with multiple co-owners from around the world, with ownership being formalized in a few clicks. For each property, a new legal entity (LLC) in the state of Wyoming, USA may be incorporated. By investing in the property, investors become co-owners of this legal entity.

When the property collects the full amount of investment, it gets transferred to the ownership of the registered legal entity. This way, investors become co-owners of this property. The ownership rights are recorded in a public and secure registry (blockchain). Each company is managed by a specific smart-contract and its address is public and included in the corporate documentation of each Wyoming DAO LLC. Any deals and transfers are done in accordance with US laws.

The essence of the USA model is as follows:

• It is necessary to establish a DAO company in Wyoming or other jurisdiction which is.
• There is no need to obtain any license.
• Users shall surpass strict AML/CFT procedures.
• Investors make decisions regarding the property and receive income depending on the number of tokens they hold.
• Tokens may be sold on different platforms and exchanges without loss of their value.

Crowdfunding in real estate tokenization

Crowdfunding is a way of raising money to finance projects and businesses. It enables fundraisers to collect money from a large number of people via online platforms. Crowdfunding is most often used by startup companies or growing businesses as a way of accessing alternative funds. Crowdfunding is the licensed business all over the world and we can suggest many comfortable jurisdictions to incorporate a Crowdfunding platform.

Solution 1. Establishing an European company with a crowdfunding license.

According to art. 3 Regulation (EU) 2020/1503 on European crowdfunding service providers crowdfunding services shall only be provided by legal persons that are established in the Union and that have been authorised as crowdfunding service providers. According to art. 12 a legal person who intends to provide crowdfunding services shall apply to the competent authority of the Member State where it is established for authorisation as a crowdfunding service provider So, if you create a company in Europe, it's legally required to have a license in the country where the company is established.

Solution 2. Establishing a new local company with a crowdfunding license in Canada.

We suggest incorporating a new company in Canada in order to avoid falling under the EU regulation. By shifting a focus away from the European market, it makes possible to minimize regulatory requirements and operational risks while still capitalizing on the less strict Canadian regulations. The Canadian regulator allows us to work with clients outside of Canada and we can assist in launching such a company.

Solution 3. We are ready to create a digital platform for partial investment in real estate, which is based in Dubai (hereinafter referred to as the Platform/Stake). Using such a platform, the user can easily invest any amount in the property that is listed on the platform. UAE gives a variety of tools for incorporating an investment. For example, it can be a company registered with the Dubai International Financial Center (DIFC) and regulated by the Dubai Financial Services Authority (DFSA). Such company may obtain a crowdfunding license and support the incorporation of SPV (special purpose vehicle) for each property listed on the platform namaged by the Dubai company.