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

On 5 August 2018 at 21:32, dorothyg <jhdorothyg2003@yahoo.com> wrote:

> On the basis of the facts you present Canada does make the most sense. Can
> you clarify if they are ok with Boards that do not have Canadians? I was
> surprised the operating costs were so high for Estonia. I was leaning that
> way until your mail.
>
> I hope we can come to a decision soon. I go with Canada now, Estonia would
> be my second choice.
>

Not a stake holder in this, but Estonia sounds like an exciting option.

They seem to be a world leader in digital identity and may even be
interested in the work identity


>
> best regards
> Dorothy
>
>
> On Sunday, 5 August 2018, 15:43:51 GMT, Adam Lake <alake@digitalbazaar.com>
> wrote:
>
>
> *The Veres One Community Group is currently discussing the topic of where
> to incorporate the Veres One Foundation. We would like to make this
> decision before we go into production. The original proposal was to
> incorporate in the US because it is the most cost effective and presents
> the least unknowns for those overseeing the incorporation process. Once
> incorporated, we would then move the Veres One Foundation operations to
> Switzerland once the Foundation’s cash on hand hit a particular threshold.
> In response to this proposal, several other countries were mentioned as
> candidates for incorporation. The following details are my findings and
> analysis to date.  *
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> * UPDATED PROPOSAL: After doing more research into the various country
> options for incorporation my proposal has changed somewhat. I propose that
> we incorporate in Canada to start with and leave the next country of
> incorporation more open ended. Canada may end up being a good long term
> home for the Veres One Foundation. The CG and the Board can decide where,
> when, and if the Veres One Foundation should migrate to another
> jurisdiction at a later date. Overall, it was not particularly easy to
> discover the requirements to incorporate as a Foundation in the various
> counties identified as good candidates by the group. I have included data
> points that I was able to acquire. I believe it is important to note that
> while Veres One is a nonprofit that it is also a lean startup. Cost
> effectiveness and simplicity are critical in the early stages. Achieving
> traction and sufficient revenue to grow is the first phase. Once Veres One
> achieves traction and a stable base of revenue, the community and the Board
> can always decide to migrate operations and incorporate in a more
> preferable jurisdiction.   It would be ideal for Veres One to move forward
> with incorporation as soon as possible as not to miss the target of going
> into production by the end of Q3 2018. It is also imperative that Veres One
> become an independent organization and that decision making authority
> related to governance be separated from Digital Bazaar. The country of
> incorporation provides a legal framework for the organization to operate
> but it does not have a lot of weight in shaping the character of the
> organization. The Community, Advisors, the Board, and the Foundation’s
> governing principles shape the character of the organization. While the
> country of incorporation is important it is not likely to determine the
> success of the project. Following are the notes on the costs and
> considerations for incorporating in each country mentioned. Note, all cash
> values are in USD. Canada Costs: Startup, $5K-10K, more likely closer to
> $5K, with assistance from an Canadian law firm. Operating, $5.5 - $7.8K at
> most for first year, less after that because we will better understand the
> compliance requirements and won’t need as much legal advisement. Tax Rates:
> Tax Exempt, but we can’t issue tax receipts to individuals. Organizations
> and foreign foundations can still donate to the Veres One Foundation and
> write the donation off of their taxable income.   Familiarity: Familiar, we
> have a point of contact and an advising law firm. Neutral: Yes Stability:
> Excellent Human Rights: Excellent Pros: One of the positives of starting in
> Canada vs the US is that we may want to continue operations there, whereas
> if we incorporate in the US we expect to later transfer operations from the
> US to Switzerland or some other country. Cons: $2K-$7K more to incorporate
> and $4.5K - $6.8K more to operate in first year than in the US. United
> States Costs: Startup $3K, Operating $1K/year Tax Rates: Tax Exempt
> Familiarity: Very Familiar, fewest unknowns Neutral: Somewhat Stability:
> High, but potentially litigious Human Rights: Good Pros: United States is
> an attractive option because it is familiar to those that will be
> incorporating and administering the Veres One Foundation and because the
> startup and operating costs are low. Tax exemption is easy to obtain, good
> for early donations if the opportunity arises. Political concerns should
> not affect the Foundation. Incorporating in the US where startup costs are
> approximately $3K and operating costs for low revenue foundations are less
> that $1K per year. Cons: The United States is not generally viewed as a
> neutral arbiter. There is historical baggage associated regarding
> governance of technical infrastructure for the Internet (e.g. ICANN)..
> Estonia Costs: Startup, ~$1000, includes drawing up the articles of
> association and other documentation as well as state fee, does not include
> applicable translations. Operating Costs, $8.4K-$11.3K/year Tax Rates: 20%
> VAT, would likely get tax exemption Familiarity: Somewhat familiar, some
> unknowns Neutral: Yes Stability: Good Human Rights: Good Estonia is not
> known for being a neutral country or for its civil rights but there doesn’t
> seem to be any red flags or concerns in these areas either. Pros: Estonia
> is increasingly known for its innovation in digital services including it’s
> eGovernment  and eResidency programs. Veres One being incorporated in
> Estonia could increase the chances that the Estonian government would use
> Veres One identifiers but country of incorporation is unlikely to be a
> significant factor in their adoption. Incorporation can be settled in a
> matter of days once all the paperwork is prepared. Cons: Tax exemption is
> likely but not guaranteed. Estonia has not automated, through their
> eGovernment services, all aspects of starting and operating a nonprofit
> Foundation like they have for for-profit entities. This means that some of
> the administrative tasks such as filing certain documents and bookkeeping
> would need to be done within Estonia. This results in higher costs than
> what was previously estimated when we thought we could start and operate
> the Foundation exclusively through their eGovernment services. If all board
> members are foreigners, appointment of a contact person in EE is required.
> Switzerland Costs: Startup, $65K Operations, $10K/year Tax Rates: Tax
> Exempt within 6 months Familiarity: Not particularly familiar but have done
> a lot of due diligence and feel comfortable with incorporating here if we
> decide to Neutral: High Stable: Very Human Rights: High Pros: Switzerland
> is globally viewed as a neutral country and is home to many international
> non-profits and UN agencies. Swiss cultural support for civil society
> organizations is strong. They have been easy to work with and I feel
> comfortable executing on incorporation in Switzerland if and when the Veres
> One Community decides that it's the appropriate course of action. Cons:
> Swiss incorporation requires $65K USD in startup costs and up to $10K USD
> per year in operating costs. This includes $50K for a capital requirement
> that could be placed in a Swiss bank account and used for operations. 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 or Canada, or Estonia to start with. Liechtenstein
> Costs: N/A Tax Rates: N/A Familiarity: Low Neutral: Good Stable: Very Human
> Rights: Good Pros: Liechtenstein has a favorable environment for blockchain
> and cryptocurrencies. Cons: It is a monarchy which does not send the right
> message for a multistakeholder global public utility. Iceland I had trouble
> getting information about Iceland. I could not find basic details about
> starting a Foundation in Iceland. The attorneys that I corresponded with
> were not willing to provide me with many details without first giving them
> a retainer. It does sound like it is possible to incorporate the Veres One
> Foundation there but it’s unclear what value Iceland provides over other
> countries that would be worth going through the extra trouble and costs of
> incorporating there.   Umbrella Org, Internet Governance Forum or Internet
> Society The idea of operating the Veres One Foundation under another
> foundation, more specifically the Internet Governance Forum and the
> Internet Society was mentioned. The advisement I received on this option
> was “ whether the Veres One Foundation could be incorporated under ISOC or
> the IGF: the answer to the latter is not, as legally this would not be
> possible (the IGF has no separate legal entity - it is a platform convened
> by the UN Secretary-General). ISOC could be an option in theory, I suppose,
> but it would be too mind bogglingly complex to consider. Multi-country It
> is an option to incorporate the Veres One Foundation in multiple countries.
> This is more of a phase II option. *
>
> --
> Adam Lake
> Director, Business Development
> Digital Bazaar
> Veres.io
> 540-285-0083
>
>