Re: PROPOSAL: Incorporate the Veres One Non-Profit Foundation

Hi Dorothy,

Thank you for your good questions. See replies inline.


On 7/6/2018 12:19 PM, dorothyg wrote:
> Dear Veres One Community,
>
> Thank you Adam for involving us in this decision.
> A few questions 1) The reason given for targeting Switzerland is that 
> it is perceived as neutral, the disadvantage is that it is expensive. 
> The perception of neutrality depends on your target audience. Are 
> there possible locations we could look at outside of Europe or the 
> USA?  Would Canada be an option for example?
Agreed that the perception of neutrality depends on the target audience. 
Since we're aiming to be a Global Utility for decentralized identifiers 
our conclusion was that Switzerland would be the least problematic for 
the greatest number of participants around the globe. We want to avoid 
being US-centric and depending on which way the winds of geopolitics 
blow Canada may or may not be strongly associated with the US. Absolute 
neutrality is essentially impossible but I think we can agree that 
maximum neutrality is the goal. The other nations we have identified as 
decent options were all in Europe, with Switzerland leading by far. 
Perhaps this is a mistake. I think any nation is an option as long as it:

 1. Is globally viewed as a neutral country
 2. Will allow the Veres One model to acquire non-profit status
 3. Does not present high risk as it relates to regulation or political
    stability

>
> 2) Nowadays for most countries registering as a not-for-profit 
> necessitates some representation of nationals of that country on the 
> board. Can you tell us more about this from the Swiss perspective? 
> Perhaps a little chart listing out positives and negatives could help 
> us research alternatives? Or send us a link so we can read through for 
> ourselves.
It is ideal to have a Swiss Board member when incorporating a nonprofit 
Foundation in Switzerland but there is something called "domiciliary 
services" that Foundations can pay law firms for to satisfy the 
domiciliary requirement.   This is part of the operating expenses 
described in the original email. Please see above list for requirements 
for prospective nations to incorporate in. I encourage everyone to add 
to that list if they have additional requirements
>
> 3) Registering a not-for-profit should be simple. I see boasts of how 
> it takes less than 3 days to register a for-profit company. Can you 
> tell me what makes it necessary to get help on this? Would Estonia be 
> an option? I know they allow nationals of other countries to register 
> for-profit companies once you have linked up with a local firm for 
> accounting purposes etc.
Registering as a nonprofit in Switzerland is not simple, I wish it were. 
The 65K startup costs mentioned include ~15K in legal and incorporation 
fees--the other 50K is a capital requirement to open a bank account. 
Estonia is an option. Our perception was that when people think 
"nonprofit global public utility" that Estonia is probably not the first 
place they think of. We thought it would be an edgy decision to 
incorporate in Estonia. We're not trying to be edgy we're trying to be 
boring and consistent. However, Estonia is innovative when it comes to 
digital government services. There may be a lot of synergies between 
Veres One and the Estonian government. It also appears to be a simple 
<https://www.estoniancompanyregistration.com/nonprofit-organisation-registration-in-estonia/> 
and cost effective option.  Perhaps we should consider revising the 
proposal to Incorporating in the US and then migrating the Foundation to 
Switzerland. Or maybe Estonia is viewed globally as neutral. It would be 
great to hear other perspectives on this.
>
> 4) The only issue I have with registering in the US, is the love of 
> litigation and associated costs. Also the policy environment seems a 
> little erratic at the moment but this could be a transitory phase. You 
> probably have a better feel for this than I do.  I will contact my 
> third sector network and ask the simple question which is the best 
> country in the world to register an international not-for-profit. If I 
> get any useful responses I will pass them on.
While I share your perspective of the policy environment being erratic I 
have a high degree of confidence that it won't affect the Foundation. I 
hope you found the replies sufficient enough to reach out to your 
network with the question of where best to incorporate an international 
nonprofit that will oversee a global internet utility. We want as much 
quality input as we can get on this important decision.
>
> Hope this helps
> Dorothy
Yes, thank you very much for your engagement and great questions.

Adam
>
> On Friday, 6 July 2018, 15:47:50 GMT, Adam Lake 
> <alake@digitalbazaar.com> wrote:
>
>
> **
>
> *Greetings Veres One Community, *
>
> *
>
> One of the first orders of business for the Veres One Project is to 
> incorporate as a nonprofit, as the Veres One Foundation. We have 
> identified Switzerland as the ideal home for the Veres One Foundation 
> because Switzerland is globally viewed as a neutral country and is 
> home to many international non-profits and UN agencies. As Swiss 
> cultural support for civil society organizations is strong, we believe 
> that it is the best place to base an organization that will oversee a 
> global internet utility such as Veres One.
>
>
> However, Swiss incorporation requires $65K USD in startup costs and up 
> to $10K USD per year in operating costs compared to incorporating in 
> the US where startup costs are approximately $3K and operating costs 
> for low revenue foundations are less that $1K per year. Swiss 
> incorporation also presents additional regulatory risks since the 
> Maintainer/Founders (DIgital Bazaar) are US-based and the nonprofit 
> Foundation would be Swiss-based. The risks are minimal and the 
> additional costs are not astronomical but it would be far more lean 
> and cost effective to incorporate in the US.
>
>
> Proposal:Incorporate as a nonprofit in the US as the Veres One 
> Foundation with a contractual obligation to close down the US 
> Foundation and migrate the entity to a Swiss-based nonprofit 
> Foundation once the US-based foundation has $100K in savings, which 
> based on the current funds distribution breakdown 
> <https://veres.one/network/funding/>would require a minimum of $435K 
> *(23% is 100K)* of revenue to flow through the network.
>
>
> Funds allocation, other than the 5% to founders, can be modified by 
> the CG to reach the $100K mark at a faster rate. In addition to 
> fee-based revenue revenue can also take the form of a donation.
>
>
> Questions:
>
>
> 1.
>
>     Do you have any reservations about incorporating in the US as an
>     initial phase of the Veres One Foundation? If so, what are they?
>
> 2.
>
>     Do you agree that Switzerland is a good long-term home for the
>     Veres One Foundation? If not, why? Do you have suggestions for a
>     preferred nation of incorporation? What are the specific
>     advantages of incorporating in that country? Would you be able to
>     facilitate the incorporation process in that country?
>
> *
> -- 
> Adam Lake
> Director, Business Development
> Digital Bazaar

-- 
Adam Lake
Director, Business Development
Digital Bazaar
Veres.io
540-285-0083