“Where should I incorporate my blockchain company?”
It might sound like a straightforward question. But for blockchain entrepreneurs, business formation is often layered with legal complexities, including securities compliance, tax optimization, risk assessment, and the obligations imposed across multiple jurisdictions.
The issue is further complicated by a changing regulatory landscape. While the Trump administration has implied a more crypto-friendly federal approach, state-level requirements are still varied. And with international jurisdictions competing for blockchain businesses, cryptocurrency business owners have a lot to consider before signing incorporation paperwork.
What regulations are impacting jurisdiction choices in 2025?
For blockchain companies, 2025 represents a regulatory shift. After years of fragmented oversight, the U.S. has taken steps toward establishing clearer federal frameworks for digital assets.
At the state level, the regulatory landscape has evolved considerably as well. While most states apply general business laws to blockchain companies without crypto-specific requirements, a handful have taken positions that may impact where and how companies can operate effectively.
Federal developments under the Trump administration
The Trump administration has signaled a pro-crypto stance with the creation of a Strategic Bitcoin Reserve and the stated goal of making the U.S. the “crypto capital of the world.”
Most significantly, Congress passed the GENIUS Act in July 2025. This law provides the first federal framework for stablecoins, requiring full reserve backing, monthly audits, and anti-money laundering compliance.
Pending legislation could bring additional regulatory structure. The CLARITY Act, which passed the House and awaits Senate action, would formally divide regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), depending on whether assets are securities or commodities, potentially resolving years of jurisdictional disputes.
Additional moves that the federal government has taken include:
- Updated SEC regulations: Under Chair Paul Atkins, enforcement activity has slowed, with the agency engaging more actively through roundtables and soliciting feedback from the crypto industry. The SEC has also provided additional guidance on stablecoins, proof-of-work mining activities, and meme coins.
- Progress on legislative efforts: Congressional bills like the McHenry-Thompson Financial Innovation and Technology for the 21st Century Act aim to provide a statutory framework for digital asset regulation, primarily through oversight from the SEC and the CFTC.
- Defined jurisdiction: The proposed legislation would classify digital assets as digital commodities regulated by the CFTC if the blockchain network is both “functional” and certified as decentralized.
State-level decisions
At the state level, Delaware and Wyoming have emerged as the most prominent incorporation options for blockchain companies, and Montana has also established itself as an attractive location for crypto mining and digital asset operations. Each location offers advantages depending on your business model and priorities.
Delaware
Delaware’s corporate law infrastructure makes it a popular option for venture-backed companies and those planning eventual public offerings. This may be a priority for blockchain companies seeking institutional capital; many venture investors expect Delaware incorporation, as the state’s extensive case law provides predictability for complex equity structures.
- Established legal framework: Delaware’s Court of Chancery, established in 1792, provides extensive business law resources and greater legal certainty when disputes arise
- Investor expectations: Many institutional investors expect venture-backed companies to incorporate in Delaware
- Corporate governance: Well-developed structures for complex equity arrangements and token allocations
However, Delaware does require public disclosure of LLC members’ names and addresses in formation documents. If founder anonymity or privacy is a priority, this public record requirement may be a drawback.
Wyoming
Wyoming also takes a position as a crypto-friendly state, with blockchain legislation that offers exemptions from securities regulations for certain crypto tokens.
Other advantages for blockchain companies incorporating in Wyoming include:
- Tax benefits: No corporate income tax, no personal income tax, and no franchise tax, resulting in significant annual savings versus Delaware
- Privacy protections: Wyoming does not require disclosure of LLC owners’ names in public records, allowing business owners to maintain anonymity
- Crypto-specific laws: Wyoming’s HB 19 exempts cryptocurrency from Wyoming’s Money Transmitter Act, while HB 70 exempts utility tokens from securities and money transmission laws
- Digital innovation: Wyoming offers blockchain-based registration, two-factor authentication for filings, and allows businesses to pay fees using cryptocurrency
- DAO support: Wyoming allows the formation of Decentralized Autonomous Organization (DAO) LLCs, providing a legal structure for blockchain-based decision-making
Montana
Montana’s Financial Freedom and Innovation Act (SB 265), signed into law in May 2025, takes a comprehensive approach that goes beyond simple tax benefits. The legislation is notable for being the first state to create a regulatory framework specifically for network tokens.
Key provisions of SB 265 include:
- Self-custody protections: Protects individuals’ and businesses’ rights to use self-hosted wallets and control their own digital assets
- Network token certification: Creates a first-in-the-nation certification process for network token issuers, with a $250 million annual sales limit. Under state law, these network tokens are not securities
- Staking protections: Clarifies that blockchain staking activities do not constitute offering securities
- CBDC prohibition: Prohibits the state government from accepting or testing central bank digital currencies
- Mining incentives: Offers specific incentives for crypto mining operations, capitalizing on Montana’s lower energy costs
Restrictive states
On the opposite end of the spectrum, some states have implemented stringent licensing requirements that significantly increase operational complexity.
- New York’s BitLicense, established in 2015, requires comprehensive compliance measures, including capital requirements and regular reporting
- California’s Digital Financial Assets Law, which took effect in July 2025, establishes a similarly restrictive framework, with penalties of up to $100,000 per day for unlicensed activity
- New Jersey mandates licenses from the Department of Banking and Insurance for digital asset activities
These requirements can increase both costs and time to market, which can be a downside if blockchain startups and companies prioritize speed to market.
International options: Weighing offshore vs. onshore strategies
Some blockchain companies prefer to incorporate their business outside the United States. This decision can offer more regulatory flexibility, tax optimization, and access to the global market. While this list is not exhaustive, some popular jurisdictions include Switzerland, Singapore, and the Cayman Islands.
Switzerland
Switzerland’s Crypto Valley in Zug has become home to a thriving crypto ecosystem, with the Swiss Financial Market Supervisory Authority (FINMA) providing comprehensive guidance for crypto companies.
Key advantages include:
- Established a regulatory framework with clear token classification
- Strong banking infrastructure integration
- Well-developed legal precedents for digital assets
- Access to European markets
Singapore
Singapore can offer greater access to Asian markets while also providing a well-defined regulatory framework. The Monetary Authority of Singapore provides licensing pathways for crypto exchanges, payment services, and digital asset funds.
The country’s established financial infrastructure, skilled workforce, and government support for blockchain innovation make it particularly attractive for companies planning significant operations in the Asia-Pacific markets.
Cayman Islands
The Cayman Islands has established comprehensive regulation through its Virtual Asset Service Provider (VASP) Act, requiring all VASPs to be licensed or registered with the Cayman Islands Monetary Authority.
As home to approximately 70% of the world’s offshore investment funds, the Cayman Islands offer significant advantages for crypto-native funds and institutional structures.
Blockchain entrepreneurs often look to the Cayman Islands for:
- Tax neutrality
- Digital asset legal framework
- Strong professional services infrastructure
- Special economic zones
Key questions to ask before choosing your jurisdiction
Jurisdictional choice often comes down to trade-offs between competing priorities: tax benefits versus access to fundraising, privacy versus institutional credibility, and regulatory simplicity versus market reach.
While it’s important to work with an experienced attorney as you make your decision, these questions can guide your thinking about the choices ahead of you.
Should I choose a jurisdiction based solely on tax benefits?
Tax optimization is important, but focusing solely on minimizing taxes can backfire. A jurisdiction with zero corporate taxes might prevent you from raising institutional capital or accessing necessary banking services, which could result in long-term costs that far exceed tax savings.
Ask yourself: Will venture capital firms engage with companies in this jurisdiction? Can you access the banking services your business model requires?
Can I avoid U.S. regulations by incorporating offshore?
Many blockchain companies incorporate offshore, hoping to avoid U.S. regulatory requirements. However, state money transmission laws generally apply to any entity that conducts business with residents of the state, regardless of the entity’s location.
Ask yourself: Where will your customers actually be located? What regulatory requirements will you face in those markets, regardless of where you incorporate?
Should I incorporate in multiple jurisdictions from the start?
Many companies start with a single entity and later discover they need complex restructuring to scale globally. While you don’t necessarily need multiple entities immediately, planning for international expansion from the beginning can save significant time and costs.
Ask yourself: Will you need to establish entities in multiple jurisdictions as your business grows? Would a holding company structure make future expansion easier?
Does my chosen jurisdiction have crypto-experienced professionals?
Some jurisdictions offer attractive legal frameworks but lack the professional services infrastructure necessary to support blockchain businesses. Your jurisdiction should have qualified legal, accounting, and banking professionals who understand the specific challenges of crypto.
Ask yourself: Can you find qualified blockchain counsel in this jurisdiction? Are there crypto-experienced accountants and service providers available?
The strategic advantage of getting it right
Jurisdictional choice isn’t one-size-fits-all. A DeFi protocol faces different considerations than a venture-backed exchange. A mining operation prioritizes different factors than a tokenized securities platform.
The right structure depends on your business model, funding strategy, and where you plan to operate. Getting this decision right from the start avoids costly restructuring later. Contact The Law Offices of Andrew Dressel LLC to discuss jurisdiction strategies for your blockchain venture.
The content in this article is for general informational purposes only. It should not be construed as legal advice or a substitute for legal advice. The information above does not create an attorney-client relationship, nor do prior results guarantee future outcomes. Any reliance you place on such information is therefore strictly at your own risk.