Author: Lawyer Jin Jianzhi

In theory, issuing coins is all about being casual, issuing them whenever you want, such as BTC, which has no centralized company structure. However, in practice, most virtual currency projects usually involve legal entities, as the issuance and management of virtual currency involve multiple legal and business considerations. Or in other words, the dream of decentralization still has to abide by centralized rules in the real world.

In the blockchain community, there is a popular saying that "registering a foundation in Singapore can issue coins." Is this statement reliable? Lawyer Man Kun Jin Jianzhi will explain this in this article.

01. What types of companies in Singapore can issue coins?

Singapore does not prohibit ICOs (Initial Coin Offering); ICOs are completely legal in Singapore. The Monetary Authority of Singapore (MAS) has even issued a "Guide to Digital Token Offerings," revealing official regulatory thinking to guide entrepreneurs and investors.

Currently, the government has not specified a particular company form for issuing coins. In other words, all company forms in Singapore can issue coins. However, there may be a tendency to choose different company forms based on their characteristics in practice. Common choices include Private Limited Company, Public Company Limited by Shares, or Public Company Limited by Guarantee, all of which are common types of limited liability companies.

02. Why do intermediaries advocate for foundations to issue coins?

First, it should be noted that the foundation mentioned by intermediaries is not strictly a legal foundation under Singapore law. This is because there is no separate "foundation" legal entity under Singapore law. Non-profit organizations in Singapore (NPOs), such as charities, voluntary welfare organizations, etc., can be considered as "foundations." The commonly mentioned "Singapore foundation" mainly refers to the establishment of a public company limited by guarantee in Singapore.

Why is a public company limited by guarantee favored? Based on Lawyer Man Kun's practical experience, there are several reasons:

1. Metaphysical aspect, in line with the concept of decentralization: According to the Singapore Companies Act, a public company limited by guarantee is essentially a non-profit organization engaged in charitable activities. Therefore, this company form prohibits the distribution of profits among members, and profits can only be used for the non-profit activities of the company.

2. Practical aspect, lighter responsibilities for the project party, and easier coin issuance: Based on the characteristics of a public company limited by guarantee, the members' guarantee amount can be as low as 1 SGD, and there is no requirement for registered capital, and members also enjoy limited liability protection. Issuing coins through a public company limited by guarantee would make it easier for Singapore lawyers to issue legal opinions on non-securities tokens, thereby avoiding MAS regulation and further promoting listing on exchanges. Currently, many well-known Web3 projects, such as Litecoin, Bytom, and Quantum Chain, have successfully issued coins through the form of a public company limited by guarantee.

03. Requirements and process for registering a foundation

The following requirements must be met:

• Must have at least one natural person member
• The board of directors must have at least three members, of which at least two must be Singapore citizens or permanent residents, or foreigners residing in Singapore
• A registered address in Singapore, which can be a residential or commercial address, but not a postal box
• A clear company purpose, explaining the charitable purpose for which the company is established
• A clear company constitution, explaining how the company operates and is managed, as well as the guarantee amount for each member

The registration process is as follows:

• First, check the availability of the desired company name on the Accounting and Corporate Regulatory Authority (ACRA) website's BizFile+; if available, reserve the name for 60 days for a fee of 15 SGD.
• Next, use the reserved name and submit the application for registration along with the prepared company constitution and other relevant documents, such as the list of members, member guarantee amounts, board of directors list, secretary list, etc.
• Third, submit the registration application through ACRA's online system and pay 300 SGD. In general, if there are no issues, the application will be approved within 15 minutes, and an email notification will be received.
• Fourth, within 14 days of receiving the email notification, collect the company registration certificate BizFile+ at the location designated by ACRA. This is proof of the company's formal establishment.
• Fifth, within 6 months of establishing the company, register with the Inland Revenue Authority of Singapore (IRAS) and apply for a tax number. If there is a need to open a bank account or apply for other permits or licenses, this should also be completed at this stage.

04. Lawyer Man Kun's Summary for You

As a blockchain-friendly and innovation-driven country, Singapore provides a legal, flexible, and efficient platform for virtual currency projects to issue coins. By establishing a public company limited by guarantee (foundation), project parties can more easily issue non-securities tokens and enjoy the advantages of limited liability and non-profit nature. Of course, issuing coins is not something to be taken lightly; project parties also need to comply with relevant laws and regulations in Singapore and respect the rights of investors and the community.

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