FAQ

Registered address for an entity is the official address of the entity recorded with the registries. It should be in the jurisdiction where the entity is incorporated. While Business address is the location where the entity conducts its operations or manages its business activities. It can be located any where (physical or virtual).

The registered address of the entity is usually mentioned in the Memorandum of association of the company, while for business address one need to provide proof of address like lease agreement, utility bills etc.

In most of the jurisdiction it is mandatory to have a registered address while having a business address is optional.

When incorporating an entity, participants are required to provide proof of address. The specific documentation accepted may vary depending on the jurisdiction. Below is a general guide to the most commonly accepted forms of proof of address, listed in order of preference. Please ensure you verify the requirements specific to your jurisdiction.

Preferred Proof of Address Documents:

• Utility Bills (Examples: Water, electricity, or gas bills.) - Must be recent (typically within the last 3 months)

• Updated Lease Agreement (The agreement should clearly state the participant's name and address.) - Must be signed and valid at the time of submission.(current lease at-least for six monts)

• Letter from Tax Authorities (Official letters or notices from the IRS or equivalent tax bodies.)

• Residency Certificate (Issued by a government body confirming the participant's residential address).

• Bank and Credit statement or phone bills- No longer acceptable in Cayman Islands.

A UBO is also known as a Ultimate Beneficial Owner. This essentially means the person(s) who ultimately benefit from proceeds of the entity. Entities that are being registered are required to have at least one UBO. The UBO can only be a natural person, meaning it can't be any corporate or nominee.

When registered an entity with a corporate director / shareholder we are required to KYC all UBO's who own more than 10% of the entity.

A corporate participant is essentially an entity that acts as a participant in an entity. This can be for instance:

• Director
• Shareholder
• Supervisor
• Corporate Secretary
• Officer

Corporate participants are often used to prevent people to take a directorship or ownership in personal name.

For instance, a holding company is generally listed as the shareholder in another entity.

Please note that corporate participants do require to declare all UBO's that own 10% or more.

A natural participant is a different term for a human.

Natural participants can take up any role in an entity if they choose to. However, the UBO (Ultimate Beneficial Owner) needs to be filled out by a human.

Nominees can be used in entities as certain participants like shareholders, directors and supervisors. Nominees are generally entities but they can also be a natural person.

A nominee position is generally used to create an extra layer between the owners/principals and the entity. For structures with a more decentralized nature a Nominee Director is often used to create that extra layer of decentralization from the original founders of the project.

Otonomos offers the following nominee positions:

• Nominee Shareholders
• Nominee Directors
• Nominee Supervisors

KYC stands for Know Your Customer. It is also known as the process to verifying and identifying the identity of the client. To ensure a quick incorporation of your new entity it is very important to provide as much details as possible. This prevents the risk of us needing to request more information which will ultimately result in further delays.

KYB stands for Know Your Business, or in other words the due diligence that needs to be done on a company. For KYB due diligence we generally need the following:

• Company Name
• Incorporation Date
• Company Number
• Company Jurisdiction
• Company Address

Besides that, we need some company documents:

• Certificate of Incorporation
• Register of Directors
• Register of Members
• Share Certificate(s)
• M&AA

Some of the entity types that Otonomos offers are:

• LLC’s
• Limited Companies
• Foundations
• Trusts
• Limited Liability Partnerships
• Limited Partnerships

Every type of entity has different use cases.

Otonomos offers entities in over 16 jurisdictions.

• Bahamas
• British Virgin Islands
• Canada (BC)
• Cayman Islands
• Hong Kong
• Ireland
• Isle of Man
• Malta
• Marshall Islands
• Panama
• Singapore
• Switzerland
• United Kingdom
• United States

Within these jurisdictions we offer multiple entity types. Some of the most used entities are:

• BVI Limited Company
• Cayman Islands Web 3 Foundation
• Panama Foundation
• Panama IBC
• US LLCs in Delaware and Wyoming

The costs associated with forming a company depends on a number of factors. The main factor is where the entity is registered.

In general there are minimal setup costs for:

• Registered address
• Registered agent
• Annual due diligence
• Government fees

Besides that there are additional services that you might want to consider like nominee positions.

To setup a company we are required to do due diligence on all natural participants and corporate participants.

For natural participants we generally need the following documents:

• Copy of Passport or Photo ID
• Copy of Proof of Address
• Copy of Resume

In some cases there is enhanced due diligence required, for these we require the following additional documents:

• 2nd Copy of ID
• Professional Reference

For corporate participants we need the following documents:

• Certificate of formation
• Register of Members
• Share certificates
• Register of Directors
• Consent to act as director
• M&AA

The time to form a new company generally depends on the entity type and the jurisdiction. US LLC’s are generally fastest at 2-3 business days. BVI companies generally take 5-6 business days. Entities in the Cayman Islands and Panama are generally registered in 7-`10 business days.

Setups in Switzerland can take 2-4 weeks as there are additional requirements like paying up capital in the company which can take additional time.

Yes, there are no residency requirements to open up a company in another country. In some countries there is a local director required. This can be provided by Otonomos when needed.

A company is registered with a set amount of authorized shares. In the BVI and Cayman Islans this is 50,000 and in Panama it is 10,000. At the time of registration the owner can decide how many shares to issue out of these authorized shares.

As the ownership is based of the issued shares you can issue as little as 1 share per shareholder. This leaves you with 9,999 Authorized shares (in Panama) to still issue for employees or future owners.

You can access your company documents in the Otonomos Dashboard. After logging in you navigate to the entity, click manage and go the Entity Documents section in the left menu. From here you can download the documents of your company.

Shutting down a company can be done in a few different ways.

• Strike Off

• Formal Dissolution

Strike Off

Striking of your company is a quicker and less formal process which suits company that don't hold any assets or outstanding liabilities.

After striking off the company it can be re-instated within 7 years.

Please note that the strike off does still leave a company liable for creditors. To prevent this a formal dissolution is the better option.

Formal Dissolition

A formal dissolution is a more structured way to liquidate the company where all debts and assets are settled and the company is legally wound up.

The formal dissolution is a more lenghty and costly process.

A shareholder holds equity or ownership in a company. This ownership can be held through another company, this will make it a Corporate Shareholder. For compliance reasons it is required to know which person(s) are ultimately behind these companies. These people are what is known the Ultimate Beneficial Owner(s)(UBO).

So no matter how many entities are owned by each other, it is always eventually owned by a natural person which is the UBO.

No, there cannot be a Nominee UBO. As a UBO always needs to be a natural person it is not possible to use a company or appoint someone else. Appointing someone else is known as a straw man.

A Corporate Director is a company that is listed as a director of another company. Corporate directors are used for liability reasons as well as privacy reasons.

A corporate director is often used in jurisdictions where directors are part of the public record. Alternatively it can be beneficial to have a corporate director as it prevents having to appoint multiple individual directors in some jurisdictions.

Keeping your entity in good standing is very important for regulatory compliance. You do this by ensuring you comply with all annual and ongoing maintenance requirements like:

• Entity Renewal Payment
• Annual Government Fees
• Annual declarations like Annual Reporting, Economic Substance Declarations, etc.

The amount of annual requirements generally depends on the jurisdiction and entity type. To learn more you can read about a specific entity type in our helpdesk to learn more about the ongoing maintenance requirements.

Many jurisdictions have a licence called the VASP (Virtual Asset Service Providers License). However it is not always needed to have this license and it also depends on the jurisdiction.

The license is mostly needed for businesses that offer services related to virtual assets, this is for instance:

• Market Makers
• Custodians
• Fund Administrators

In the BVI for instance, it is not required to aqcuire a VASP License for a one time token issuance. This makes the BVI attractive for a token issuance entity.

Most teams open up entities in multiple jurisdictions when they operate in multiple jurisdictions as well. Another consideration is the regulatory landscape.

If you are looking to run a crypto project and want to issue a token and govern the project you will be required to issue the token and govern the project through two separate entities. You will need it to be in different jurisdictions as one is more suited for the issuance of the token(BVI) while the other is more suited for the governance of the project (Cayman Islands).

A faceless foundation is a foundation that does not have any named members and founders. It is also known as a Memberless - Founderless Foundation.

Otonomos accepts multiple payment types:

• Crypto - you can pay in stable coins and native coins on multiple networks and layer 2's
• Credit Card - you can also pay with credit card
• Bank Transfer - if preferred you can also pay with a wire transfer. It does however take longer for us to confirm the receipt of the payment and get started with the onboarding.