When classic offshores still work in crypto: Marshall Islands, Saint Lucia, SVG

Introduction

Over recent years, we have advised diverse crypto and Web3 teams—ranging from early-stage protocol builders to international businesses. A consistent pattern: classic offshore jurisdictions are no longer the default, but still serve as a precise tool when business models stay strictly outside fiat flows and regulated financial services.

That is exactly where jurisdictions such as the Marshall Islands, Saint Lucia, and Saint Vincent and the Grenadines (“SVG”) still appear in real structuring work. Not because they “avoid regulation”, but because in a narrow set of models they solve a very specific legal task: they give the project a corporate wrapper, a contracting vehicle, and an IP holder – without importing a licensing perimeter that the project does not actually touch.

At the same time, the regulatory environment has changed dramatically. The EU’s MiCA regime, increased enforcement in the United States, and growing regulatory scrutiny across Asia have raised the bar for transparency, licensing, and compliance. In this landscape, the relevant legal question is not whether offshores are “dead”, but when they are legally justified and operationally stable, and when they predictably become a trap.

When offshore is a tool

In our professional advisory practice, the decision to use an offshore structure is always driven by a structured analysis rather than tax optimization. Each project is assessed through a consistent framework, anchored by three primary considerations:

Does the project touch fiat (even indirectly) – through bank accounts, payment rails, on-ramps/off-ramps, or settlement agents?
Does the project ever have custody or control over user assets (including through arrangements that appear custodial in substance)?
Does the project look like a financial intermediary activity in any target market (exchange, brokerage, portfolio-like features, yield, managed execution)?

If the answer is “yes” to any of these, a classic offshore typically stops being protective and becomes operationally expensive – banking friction, counterparty rejections, licensing escalation, and, eventually, forced restructuring. If the answer is “no” across all three, offshore structures can still work cleanly – particularly for non-custodial, protocol-level products and small international teams.

Where Marshall Islands / Saint Lucia / SVG actually fit

Although these jurisdictions are often grouped together, in practice, they tend to be used for slightly different reasons:

Marshall Islands most often appears in DAO-adjacent or contributor-governed models, where teams need a strong corporate wrapper to hold IP, support decentralised governance mechanics, and limit participant liability.
Saint Lucia is frequently used as a lean contracting and IP-holding vehicle for early-stage non-custodial projects that deliberately stay outside fiat and regulated services.
SVG commonly serves as a fast-start jurisdiction for international development teams, where speed, simplicity, and global contracting are required – provided the model remains strictly non-financial.

Across all three, the common denominator is narrow but real: a blockchain-native project that needs legal personality, IP ownership, and enforceable contracts – not a financial perimeter.

When classic offshores still make sense

We continue to see justified offshore use primarily where the project:

operates exclusively with digital assets;
has no fiat flows and no payment processing;
provides no custody and has no practical control over user assets;
does not act as a financial intermediary (economically or functionally).

These are typically protocol teams and infrastructure operators. The company’s role is limited to software development, maintenance of technical infrastructure, open-source coordination, smart contract deployment, and vendor contracting.

Here, an offshore entity provides legal support, not financial functions: it holds IP, contracts with developers and vendors, and creates a corporate veil separating contributors from operational risk. This structure is common among small to mid-sized international teams operating entirely within the blockchain ecosystem.

Practice insight: where classic offshores actually work and where they don’t

A typical scenario from our mandates involves a small international team building a non-custodial blockchain product for a global audience. There are no bank accounts, no fiat settlement, no payment services, and no custody of user assets.

At this juncture, the most overlooked legal risk is contributor exposure. In the absence of a legal entity, contributors may be deemed part of an unincorporated partnership or similar arrangement, facing potential joint and several liability.

Our solution in such cases typically includes:

incorporating a classic offshore entity (often SVG or Saint Lucia for lean structures, or Marshall Islands, where governance and liability narratives require a stronger wrapper);
assigning and centralising IP at the entity level;
implementing contributor and vendor agreements under a single legal counterparty;
designing internal policies that explicitly prohibit fiat flows, custody, and regulated financial activity.

In this configuration, the structure works predictably and efficiently. However, once the same project later plans to introduce a fiat on-ramp, payment services, or investor-facing financial functionality, we consistently recommend migration to a regulated jurisdiction. In practice, this transition is far less costly when anticipated early than when imposed by banks or counterparties under time pressure.

When classic offshore jurisdictions create legal problems

Even where an offshore launch is initially clean, we repeatedly observe the same failure mode: the project grows and quietly expands its functional perimeter.

At that point, offshore entities, particularly in SVG and Saint Lucia, encounter immediate friction:

bank accounts become difficult to open or maintain;
counterparties demand regulatory clarity;
licensing questions escalate across multiple jurisdictions.

Classic offshore regimes are generally not recognised as sufficient supervisory frameworks for financial services, and instead of reducing risk, they tend to amplify it. Teams are then forced into rushed restructurings or complex multi-layer setups — often at a significantly higher cost than correct structuring from day one.

Conclusions

Classic offshore jurisdictions are obsolete or universally unsuitable in Web3. The key takeaway is that they remain useful mainly for non-custodial, protocol-level products run by small, international teams without fiat exposure or regulated financial services.

The key is not the jurisdiction name – it is alignment with the actual business model and the discipline to stay within its legal boundaries. Offshore structures can still work, but only when used with a clear understanding of where their legal protection begins and ends.

At Manimama Law Firm

At Manimama Law Firm, we help businesses navigate this new reality effectively. We prepare documentation, manage application processes, and develop long-term crypto-compliance strategies.