Also in the news...
Paul Beare Wins IR Global Member Of The Year
Paul Beare has been named Member of the Year at this year’s IR Global Conference in Amsterdam.
The Biggest Problem With Running A UK Payroll
We explore the biggest problem with running a UK payroll, together with the required functions of payroll calculations and net salary.
Taking It For Granted: How The UK Government Helps Growing Firms
In the UK, a number of government agencies offer a range of grants to help smaller firms to grow and prosper. The grants are typically designed to support innovation, encourage job creation, and underpin growth. In the last few years, a number of new initiatives have emerged, including grants aimed at boosting green technology and digital transformation.
Start-ups Wasting Over 2 Weeks And £37 Billion A Year On Admin
UK start-ups and microbusinesses are wasting over two working weeks every year on admin tasks, including managing mobile phone contracts, choosing energy providers, and buying insurance – according to new research.
The Costs For International Businesses Employing In The UK
In an ever-globalising business landscape, expanding operations to the United Kingdom can be a strategic move for international companies seeking new opportunities.
For The Digital Nomads Community: 7 Reasons Why Start a Blockchain Smart Company
Wifi? Check. Laptop? Check. Picturesque surroundings and white sandy beaches? Check. What about that business structure...?
Digital nomads - the rising phenomenon of the past decade, shaking up the traditional ways of living, working and traveling. The remote souls, the nomads, digital entrepreneurs and free radicals born global. The ones unbound by national borders, industry sectors or conventional models. Those who settle for nothing less than a larger purpose, crafted by intrinsic curiosity, self-reliance and perseverance.
While nomadism itself isn’t anything new, the digital revolution enabling less friction in the entrepreneurial world has given momentum to this phenomenon of designing your very own lifestyle. Live, work, travel. This is typically portrayed to take place somewhere tropical where sipping a negroni is what you do for living - but as many of us know, the reality is often quite different.
Needless to say, setting foot into the space of nomadic lifestyle can be daunting. Without a clear recipe how things are supposed to work, there are a million different ways of transitioning into being a digital nomad - and at least an equal amount of ways of making things work. In the absence of universal regulations supporting this shift, the void is filled with ambiguity of visa regulations, work permits and tax filings. And that’s just your personal end of things. What about setting up a business? What about international banking? Or how about protecting your IP rights or raising funds?
For the purposes of this post, we’re going to focus only on the work - part of the lifestyle. Simply because we know you are completely capable of taking care of that wanderlust - planning yourself.
Getting started
For those of you aspiring to embark on to your own entrepreneurial journey, there are several ways to get started:
- Becoming an entrepreneur from the scratch
- Moving your existing business online
- Acquiring another business for passive income
While no legal establishment is required for doing what you plan to do per se, the minute you start invoicing customers and have your first paid transaction for your product or services, that also marks the start of your legal liability. Some people choose to operate as a sole proprietorship, but this poses you to risk your personal credit and assets over business operations. Others choose E-Residency for digital identity but are subject to Estonian social taxes. Finally, many people choose to register their business in their home country, simply because it feels like the safest bet.
However, there are multiple options that have emerged over the past years that enable easier ways to manage a remote business establishment. Having reviewed multiple different options of managing business as a digital nomad, and having experienced the headaches of the lengthy and costly processes in bureaucracy of even small things, here is our take for you on setting sails as a remote entrepreneur:
#1 Understand your options. Do your homework about your specific business needs as well as your personal needs.
#2 Before setting up your business, make sure you understand the distinction between the place of legal incorporation and the place of business operations: where you incorporate your company does not have to determine where you do your business. Therefore, where you incorporate your business is not necessarily where you pay your corporate income taxes.
#3 Draft out your product and business model. And always leave room for unpredictability and changes in your structure.
#4 Consider your budget, how much play time you’ve got to make the business work and the amount necessary admin involved from invoicing to accounting etc.
Having all this in mind, do your research and choose what works best for you. To expand your pool of options, we’d like to introduce a model specifically suitable for the digital nomads community: the Smart Company (SC).
What is a Smart Company?
Designed to empower the next generation of entrepreneurs who aspire to live and work wherever and whenever they want to, a Smart Company runs on Ethereum blockchain with full legal compliance. As a legal structure, it is suitable and versatile enough to serve countless different types of business models and operations. As a technological platform, it is transparent, immutable, verifiable, error-proof, fast a cost-effective way of managing business.
The Smart Company stands as a hybrid model between International Business Company (IBC) and a Decentralized Autonomous Organization (DAO). It is 100% legally compliant with a touch of blockchain technology. One of the most unique creations of a Smart Company is the ability to convert corporate shares into tokens. These shares are registered on the blockchain as unique Ethereum ERC-20 tokens modified for security laws. These tokens carry information that makes them unique to each organization and tracks the history of their movements, without interfering with the legal validity of the share.
What are the implications of all of this?
As Smart Companies run on the blockchain, we enable radically different ways of doing things. Compared to the global average time needed to incorporate a legal organization, we are able to shave off 99.7% of the time, costing our users 99.9% less on any transactions when sending corporate shares to investors, advisors or team mates.
How is this possible? Because we are a Smart Company ourself and therefore able to scale our innovative solution we’ve built on the blockchain. This is not optimization of the corporate management structure, this is a fundamental systems shift that will change how future businesses are run.
And the list goes on and on. Let’s look at the main advantages of the Smart Company for remote entrepreneurs.
1. Time and Money
We all have the same 24 hours a day and we’d all rather spend our budget on anything else other than bureaucratic processes we don’t even understand. While every corporate transaction in a legacy company requires multiple steps, time, paperwork and costs, performing these same steps via our dApp, every event happens as soon as the Ethereum’s block for the specific transaction is confirmed, in real time.
Therefore, this opens up the potential for completely rethinking how you run your business, reducing human error and most importantly, increasing speed, accuracy, efficiency and efficacy.
2. 360 Degree Digital - manage everything from your computer
This one is made for digital nomads and remote entrepreneurs. We offer a one-stop solution for everything you need to manage your business. From Know Your Customer (KYC) processes to voting and trading your shares to fundraising, everything can be managed in real-time on our dashboard, directly from your computer.
This means that an aspiring entrepreneur with an idea could set up their business the same day and start trading shares immediately with real time, accuracy coded into smart contracts, and transparency and security provided through the distributed ledger.
3. Unlocking Illiquid Assets
One of the most empowering advantages of Smart Companies is its ability to convert illiquid assets owned by the company into tradable shares with real-world value. This is because the ERC-20 tokens are legally recognized securities, corporate shares, and therefore subject to the same legal rights and limitations. Previously asset-heavy industries can now be offered liquidity, which itself has the potential to revolutionize entire business models. To understand this better, we’ve previously shared an example use case of this, right here.
4. Smart Intellectual Property
We understand that many digital nomads work in the fields with intellectual property. Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.
Smart Companies enable smart IP management. IPs can be considered intangible assets of a company, e.g. brand name, and assets are governed by corporate shares. As each Smart Company shares are tokenized with a unique code, this means all your intellectual property can be tokenized and powered by blockchain, while you maintain full ownership.
The ability to register the entire life cycle of your company’s IPs can add tremendous value to your business. It can serve as evidence of creatorship as well as evidence of use of IP rights. For social media influencers and other personal brands, this opens up numerous opportunities. From athletes to art collectors and singer-songwriters to independent photographers, the ability to tokenize your intangible assets can revolutionize entire industries. Ways of collaboration within the sector, sharing profits, ownerships of content, engaging with audience and monetizing value - sky’s the limit for the creative minds.
5. Transparency
Not only does the blockchain technology enable transparency for your business, it is also one of our core values as a team. From the technological aspect, all records of Smart Companies are stored on a decentralized ledger that is distributed across the world, making it possible to immediately validate its authenticity. From our team aspect, we’re simply just not into small prints and therefore embrace a fully transparent, no hidden-costs type of a model for our communities.
6. Security
Smart Companies can be considered exceptionally safe because they use Blockchain technology. The technology allows for a more secure architecture compared to a centralized solution stored in a single server. To hack a centralized solution, for instance, all that is needed is an access to the server where the code is hosted, which can then be modified at will. To hack the code hosted on the Blockchain, however, the hacker would either need an extraordinarily large amount of power required to rewrite the rules, or a quantum computer. Although it is never impossible to hack a system, Blockchain makes it significantly more challenging for hackers, compared to the centralized system used today.
7. Legal frame and versatility
The Smart Company operates in a compliant model that we’ve successfully deployed in the Republic of Seychelles. With the same legal framework as IBCs, Smart Companies are subject to 0% corporate income tax on foreign source income and only one shareholder is required to start the company.
However, as a digital nomad, always do your homework on your specific case. It is important to comply with the basic rules of an IBC in the Seychelles, which restricts an IBC from conducting business onshore, or operating certain businesses without appropriate licences for instance. It is also important to remember that while Seychelles IBCs and SCs are not to subject to Seychelles corporate tax, foreign individuals may be subject to taxes in their home countries in accordance with their domestic tax regulations.
Enabling entirely new business models
Building your life as a digital nomad, resourcefulness will trump resources in any given situation. Improvising as you go, innovating as you learn and designing that ideal lifestyle for you to manage your business is key. We built our solution the way we did because we are entrepreneurs ourselves who wanted to empower the next generation of thinkers and makers.
Our model today enables a legal business entity powered by blockchain technology, and this alone opens up radically different ways of doing things. As a remote entrepreneur, having the ability to share ownership over your company, slice your Smart Company assets into a million different units, projects or models, revolutionizes the way we conventionally design business operations. If you’re an artist traveling around the world creating and sharing your work as you go, you can now tokenize your art for different purposes and ownership models. You have evidence of creatorship over the arts you’ve created and can collaborate with influence marketers, to whom you can share ownership over their contribution in the intellectual property they’ve created. You could attract fellow artists, collaborators and investors on board of your projects across the world without ever meeting them in person as all your corporate governance and execution is written in codes of smart contracts and perform exactly the way you’d like them to. And last but not least, all of this can be done from a single computer wherever you are, in real time, with minimal costs.
Ultimately, this is a solution we’ve created in team Korporatio for entrepreneurs, from entrepreneurs. So that you, as a digital entrepreneur, can focus on what really matters.