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

+1 Canada makes sense I think, even though I have to admit I also liked
the Swiss option :)

On 08/16/2018 08:16 PM, Adam Lake wrote:
>
> Hello Veres One Community Group,
>
> It's been almost a week since I sent the updated proposal to
> incorporate the Veres One Foundation in Canada. Please reply with +1,
> -1, or 0, with an explanation if you choose to include one, before the
> end of the day if you have an opinion on the proposal.
>
> So far we have:
>
> Six -- +1's
> Two -- 0's
> Zero -- 1's
>
> More specifically:
>
> *Kilnam Chon*: "Canada sounds better than others"
>
> *Kaliya Young*: “Canada seems like the best option. They (the
> Canadians) are doing really good identity work too.”
>
> *Joe Andrieu*: +1, “Canada is alright”
>
> *Manu Sporny*: +1, agreed. The country has a fairly excellent track
> record wrt.
> identity work, the government is progressive wrt. privacy…
>
> *Dave Longley*: +1
>
> *Adam Lake*: +1
>
> *Christopher Allen*: 0, Abstain
>
> *Melvin*: “Not a stake holder in this, but Estonia sounds like an
> exciting option”
>
> I am interpreting Melvin as a Zero--Melvin, please correct me if this
> is wrong. I believe you are a stakeholder since you are part of the CG
> and have interest in the work. You are a stakeholder if you want to be.
>
> Kind Regards,
>
> Adam
>
>
> On 8/10/2018 12:04 AM, Adam Lake wrote:
>>
>> **
>>
>> *Hello Veres One Community,*
>>
>> *
>>
>> It sounds like we may have consensus around the proposal to
>> incorporate the Veres One Foundation in Canada.
>>
>>
>> The proposal is more specifically:
>>
>>
>> “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.”
>>
>>
>> Since this is the first proposal and decision we are making together
>> as a community it might be good to review the decision making process
>> <https://veres.one/network/governance/>.
>>
>>
>> We are in the second stage of the decision making process,
>> “consideration”. I would like to request that in order to determine
>> if we do in fact have consensus that members reply with +1 to show
>> support for the proposal or -1 to express opposition to sending the
>> proposal to the Board for ratification.
>>
>>
>> Anyone with remaining objections or concerns please raise them in the
>> next week, by the end of business Thursday the 16th.
>>
>>
>> If there are not any objections we can send the proposal to the Board
>> of Governors for ratification late next week.
>>
>>
>>
>> Kind Regards,
>>
>>
>> Adam
>>
>> *
>>
>> On 8/6/2018 3:12 PM, Adam Lake wrote:
>>>
>>> Dorothy,
>>>
>>> I will do my best to fulfill your request. Not being a international
>>> nonproft lawyer and the differing definitions and regulations in
>>> each jurisdiction make the analysis difficult. My focus has not been
>>> on the specific term used for the designation, nonprofit,
>>> foundation, society, ect... but the other considerations of startup
>>> and operating costs, whether we'll qualify for tax exemption, if the
>>> country is stable and viewed as a neutral arbiter, and whether said
>>> designation will require that Veres One continue to operate based on
>>> it's nonprofit mission. 
>>>
>>> Generally speaking, as I understand it, nonprofit is a broad term
>>> that encompasses the term and designation of "Foundation". The
>>> definition of a Foundation differs from country to country.
>>>
>>> *Canada*
>>>
>>> Unlike the US and Switzerland Canada has a more specific definition
>>> for "Foundation"; it is limited to "Charities".  If we choose to
>>> incorporate Veres One in Canada it will still have the option of
>>> identifying itself as a Foundation (since that is the term most
>>> familiar to our prospective Global user base) but Veres One would
>>> technically be designated as a Nonprofit "Society" for legal purposes.
>>>
>>> Here is a good resource
>>> <https://www.canada.ca/en/revenue-agency/services/charities-giving/giving-charity-information-donors/about-registered-charities/what-difference-between-a-registered-charity-a-non-profit-organization.html>
>>> that defines Charities and Nonprofits in Canada and following is the
>>> essential text from this source:
>>>
>>> Registered charities and non-profit organizations (NPOs) both
>>> operate on a non-profit basis, however they are not the same.
>>>
>>> _Registered charities_ are charitable organizations, public
>>> foundations, or private foundations that are created and resident in
>>> Canada. They must use their resources for charitable activities and
>>> have charitable purposes...
>>>
>>> _Non-profit organizations_ are associations, clubs, or societies
>>> that are not charities and are organized and operated exclusively
>>> for social welfare, civic improvement, pleasure, recreation, or any
>>> other purpose except profit.
>>>
>>> *Estonia *
>>>
>>> Under Estonia law, depending on their purpose, nonprofits can be
>>> designated as charities, community associations, charitable
>>> projects, civil society organizations, or foundations. I am not
>>> finding definitions of these designations but my understanding based
>>> on feedback from a contact in Estonia is that the Veres One
>>> nonprofit model would be designated as a Nonprofit Foundation in
>>> Estonia.
>>>
>>> I can further search for definitions for the various nonprofit
>>> designations in Estonia if it seems necessary to our analysis and
>>> incorporation discussion.
>>>
>>> Please let me know if you require additional information and I will
>>> expand my research. 
>>>
>>>
>>> Kind Regards
>>>
>>> Adam
>>>
>>>
>>>
>>> On 8/6/2018 1:16 PM, dorothyg wrote:
>>>> Kindly explain the difference between Foundations and
>>>> Not-for-profits under both Estonian and Canadian law. Thanks in
>>>> advance.  A quick table listing features is enough.
>>>> best
>>>>
>>>> On Monday, 6 August 2018, 14:11:31 GMT, Adam Lake
>>>> <alake@digitalbazaar.com> wrote:
>>>>
>>>>
>>>> Dorothy,
>>>>
>>>> Yes, we can incorporate in Canada even though none of the Board
>>>> resides there. It just requires domiciliary services, an address
>>>> where papers can be served if for whatever reason we ever get sued.
>>>> This is the case for Switzerland and Estonia as well.
>>>>
>>>> I was hoping that Estonia would be a more straight forward and
>>>> affordable option as well and that we could perform all required
>>>> tasks through their online eGoverment services. It turns out that
>>>> eGov services are not comprehensive for Foundations like they are
>>>> for for-profit entities. That being said, Estonia is my 2nd or 3rd
>>>> choice too.
>>>>
>>>> I hope we can make a decisions soon as well!
>>>>
>>>> Adam
>>>>
>>>> On 8/5/2018 3:32 PM, dorothyg 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.
>>>>
>>>> best regards
>>>> Dorothy
>>>>
>>>>
>>>> On Sunday, 5 August 2018, 15:43:51 GMT, Adam Lake
>>>> <alake@digitalbazaar.com> <mailto: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.  *
>>>>
>>>> *
>>>> *
>>>>
>>>> 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
>>>>
>>>> -- 
>>>> Adam Lake
>>>> Director, Business Development
>>>> Digital Bazaar
>>>> Veres.io
>>>> 540-285-0083
>>>
>>> -- 
>>> Adam Lake
>>> Director, Business Development
>>> Digital Bazaar
>>> Veres.io
>>> 540-285-0083
>>
>> -- 
>> Adam Lake
>> Director, Business Development
>> Digital Bazaar
>> Veres.io
>> 540-285-0083
>
> -- 
> Adam Lake
> Director, Business Development
> Digital Bazaar
> Veres.io
> 540-285-0083