Over the last 12 months, the way in which start-up businesses and new projects gather funding for their ventures has changed drastically.
Instead of going through traditional rounds of fundraising, forward thinking and innovative businesses have the chance to bring their ideas to the masses and to raise funds from a much larger pool of investors.
As everyone knows, Malta has been at the forefront of various disruptive industries, such as iGaming and now blockchain, but it is also an excellent jurisdiction for launching your new ICO.
So how to launch an ICO in Malta? Let us read on to find out more.
- Malta as an ICO Jurisdiction
- What Do You Need To Launch an ICO?
- How Much Does It Cost to Launch an ICO?
- Is It Worth It?
Malta as an ICO Jurisdiction
But why Malta? There are many reasons.
Like mentioned above, Malta is known for being forward-thinking regarding new technologies and sectors, and it is a hotbed of digital innovation and talent as well as having a government that is proactive in developing these sectors further.
Some people think that ICOs are entirely unregulated, but that is not necessarily the case in Malta.
Furthermore, the government is set to implement a series of regulations and legislative frameworks to encourage and support the growth of the ICO sector in a way which not only protects investors but the companies that are launching them as well.
While the legal obligations are still a little grey, it doesn’t mean that you are free just to issue a token sale as you wish and relying on the Howey test is not sufficient.
At a base level, a token is not considered a security as it does not have a share of profit backing it, meaning it does not fall under the securities laws of the country.
You should, however, be very careful in the way in which you word all of your promotional materials and your whitepaper as you must ensure that you are crystal clear in the fact that it is a utility token.
You must also be clear with your terms and conditions to ensure that the relationship between the issuer and person subscribing for tokens, is crystal clear as other laws will come into play in this regard.
You also need to consider the issue of taxation including what is your tax exposure on the sale of tokens and what are the tax implications of the people that buy your tokens. This is a somewhat complicated matter, and you need to speak to a professional to clarify them.
Malta is a great place to set up an ICO as it has completely embraced blockchain technology and you can benefit from an effective tax rate of as little as 5%.
You should also know that funds that are raised through the ICO could even be entitled to as little as 0% should you satisfy some specific criteria.
This is all on top of the fact that the island is full of many professional services companies specialising in this subject, all of whom are fluent in English, and of course, don’t forget that the sun shines for over 300 days a year there!
Just be aware that government legislation concerning ICOs and blockchain is imminent, so while it may not be crystal clear at the moment, it will soon be the first jurisdiction in the world to create a legal framework for this sector.
What Do You Need To Launch An ICO?
This is quite literally the million-dollar question.
In a nutshell, you need a great idea, a purpose, a plan, some money to invest in the other things you need, and you will also need a big dollop of perseverance.
First up, you need a good idea. What will your token be? What function will it have? Why should people buy it? And what kind of smart contracts will it need to work correctly?
Without knowing the answers to these questions, you will not get very far in the ICO process.
Think carefully and do your research to make sure that your idea and all of its necessary components fulfil a purpose and fit in a gap in the market.
Secondly, you are going to need a whitepaper which is a document, either created by or overseen by the founders, and then reviewed in detail by an expert.
The whitepaper needs to not only lay out every single detail of your plan, but it also needs to sell the idea to anyone that reads it.
The whitepaper is your most valuable marketing tool, and it is how potential investors will decide on your project, so you need to make sure it is top notch.
You are also going to need a professional and dedicated website to showcase your product.
Again, the image is everything here and the way your website looks and the impression it gives will all play a big part in the success of your ICO.
Unless you are a whiz on website design, it is best to get a professional in to make sure that the site reflects the quality and professionalism of your plans.
You should also consider branding, graphic design, content, PR, SEO and other marketing tools to make sure that your product reaches the right people at the right time.
You then need to consider your team – bringing onboard an excellent Smart Contract developer with a lot of experience will help you create the best product.
Surround yourself with ambitious, talented and motivated staff, and you will be off to a running start.
How Much Does It Cost To Launch an ICO?
Honestly? Launching an ICO does not come cheap, and realistically, you will be looking at the cost of around EUR70,000.
Remember that cutting corners and costs is not an option in this business so be prepared to part with a significant amount of cash to get the quality result that you need.
This figure will cover everything from designing and setting up your website, paying a coder and developer, to advertising and launching your product.
This figure could vary drastically though depending on a large variety of factors such as what your product is and who you choose to partner with. If you have the cash to splash, you could look to spend up to EUR500,000 with over half of that going on advertising alone.
Remember that if you are cutting costs and this becomes obvious, you risk ruining your credibility which is everything in a market such as this.
Ensuring that you are as professional as possible and tick all the possible boxes means that your investors will have less reason to suspect that you may not be who you say you are.
Creating a Whitepaper
Every ICO will require an authoritative, in-depth, informative and articulate whitepaper.
The aim of this document is to describe the product, explain the use and purpose of the token, and to discuss the process of distribution at length.
In other words, the whitepaper is the backbone and the skeleton of your project, and it is what your potential investors will be looking at first and foremost before deciding if your ICO is worth their time and money.
You need to explain the concept, the plan, the product, its benefits, the financial ins and outs and what you hope to achieve. You also need to provide in-depth information on the future of your coin and how it will benefit your investors in the long run.
Unless you are a copywriting and content writing whiz, it is best to outsource this to a professional, but be prepared, they don’t come cheap.
Setting up a Website
Again, unless you are something of a web developing expert, you should get a professional to design your website.
Choose a relevant domain name and keep the layout sharp, sleek, and snappy.
No one wants to visit a difficult to navigate website and clogging it up with annoying graphics and text is not going to benefit anyone.
Make sure that your whitepaper is available for download via the site and remember that you are working in the technology sector, so consider this when you decide on its look and feel.
How To Market Your ICO?
So you have the perfect product, an impressive whitepaper and you are ready to go, but these things are no use if no one gets to know about your ICO.
This is where the marketing side of things comes into play.
Whilst you are able to do some of the marketing yourself, it is always best to get in a professional marketing agency that specialises in ICO marketing, to make sure that you don’t make any mistakes or miss out on any prime opportunities.
Facebook and Google both recently announced that they will no longer be allowing ICO advertising on its platform, which has been a bit of a blow to ICO marketers, but luckily there are plenty of other opportunities.
First up, you need to list your ICO on an ICO calendar. There are several leading sites available, and for a fee, you can list all of the relevant information as well as the dates of its launch on a calendar that will be explicitly viewed by people who are looking for ICOs to invest in.
Be aware of all the leading cryptocurrency forums – there is a considerable number of online communities and discussion platforms where you can get involved in discussions, start conversations, and create hype around your ICO. One such platform is BitcoinTalk which is the biggest and most popular for crypto-related topics.
Reddit is another place you need to be pushing your project. It is not as simple as just signing up and plugging away; you need to have an established account and be savvy about the way you promote.
If it is too apparent that you are purposely creating hype around a product, you will be discredited by the community, and in a sector where reputation is everything, this cannot afford to happen.
Other Social Media Platforms
You should also consider promoting on Twitter and LinkedIn as both platforms have very large crypto-communities as well as being places where people go to get news and up-to-date industry information.
Done correctly, you can do a lot of effective social media marketing without spending too much money, but for truly exceptional results, you need a strategy, a budget, and professional to give you a helping hand that you need.
You should also look into content marketing on YouTube and articles on Medium as additional ways to create hype and to entice savvy investors to your project.
Medium is a particularly useful tool as content posted on it has the ability to go viral, catapulting your ICO into the industry spotlight.
These portals also have a large following on Social Media and a hefty subscription list. Without any risk, they will be able to promote your business to their audience organically.
There’s also another advantage of saving your money on Facebook – you can go directly to the audience that is interested in cryptocurrency-related business or investment.
While using Facebook or Google, the chances are that the majority of people is not interested in your product. Hence, you are spending money on an audience that will probably never even visit your website.
Going directly to cryptocurrency hubs, you are increasing your chances of engaging genuine investors.
Hire a Marketing Agency
Marketing a crypto-business has become extremely hard due to fierce competition.
Even if you have a large sum to spend and know how to use the Internet, your success rate probably won’t be that high.
The only agency on the market that is knowledgeable in the area of ICO marketing is ANCHOVY. There, you can find experts that know how to beat the competition and make your product stand out.
They will also know how to go about specific regulations, especially on Social Media, and how to promote your business without compromising it.
How Much Will It Cost Altogether?
To set up, launch, and run a successful ICO you need to have at least EUR60,000 and a minimum of three months, running on a tight schedule.
Of course, the more money you can plough into doing things right, then the more chance you have of success. A cheap product with cheap marketing will yield less than satisfactory results, so this is not a time to cut corners.
The ICO process isn’t the easiest out there, and it does require a lot of work in a range of different areas.
From the development of the management to the marketing, all of it needs to be carefully thought out, planned, and executed.
Ensuring you have the top quality staff to help you along your way is equally important, and hiring a local agency that specialises in the sector will help you get the best bang for your buck when it comes to your advertising budget.
Remember to manage your money carefully from the planning stage, right through the entire process because this is a type of business where you only have one chance to impress.
Make sure you are fully prepared for your pre-ICO and your ICO and put some serious thought into choosing Malta as a jurisdiction.
Knowing how to launch an ICO in Malta is one of the first steps to the success as you would not only do it within an established and secure jurisdiction but also in a place with a pool of talent that can help you do it properly.
For more information, read our article on How To Promote an ICO.