Fintech project registration: how to choose a jurisdiction

The choice of jurisdiction is extremely important. By registering a company in one place or another, you can immediately gain a positive reputation for your startup. Making the right choice will also affect your bottom line, as taxation varies greatly. At the same time, there is no standard choice for registering a fintech company, as individual countries are concentrated in different areas of fintech. It is impossible not to take into account the rapidly developing regulation, which can completely change over the course of a year, in connection with which the attractiveness of countries also changes. You can read about how to choose a place to establish a fintech project and what to look for in our article. 


What to look for when choosing a jurisdiction for a fintech project 

Influence of the type of activity of a fintech startup on the choice of jurisdiction

The choice of jurisdiction directly depends on the type of activity that your fintech project plans to carry out. Some areas of fintech are regulated only in certain countries. For example, decentralized finance. You can read more about support for DeFi projects in our article "Legal support for DeFi projects". In these cases, it is worth considering the possible legal risks of the project, as it may be in a gray area.

The second question you need to decide is which market you are planning to enter, as it may depend on 

  • type of license. In the European Union and some other countries there are licenses that allow you to carry out activities only on the territory of this state (Small Institutions). These licenses are easier and faster to obtain;
  • the level of legal requirements for a fintech project. For example, legislation in the AML / CFT area, i.e., in the field of combating money laundering and terrorist financing, it differs: in some countries they are extremely high and their compliance can be the main problem for a fintech project.

Fintech projects licensing 

When choosing a jurisdiction, you need to pay attention to the licensing procedure in different countries. First, consider where your activity is subject to licensing. If it is mandatory, then familiarize yourself with the requirements that will be presented to your startup. The term of the procedure is also important if you are limited in terms of implementation time.

Taxes when choosing a country for a fintech project

It is impossible not to take into account the taxation systems in different countries. It is taxes that can be a way to develop the fintech industry in certain countries. In addition, taxes will affect your bottom line.

Features of countries in the fintech sector

United Kingdom

The UK already has a recognized reputation as the most suitable country to establish a fintech company. Along with the existing infrastructure, it is worth paying attention to the fintech-friendly policy of the regulator and a fairly flexible taxation system. At the same time, the UK has high standards in risk management and AML / CTF regulation.


Despite all the advantages, the existing environment and culture favorable for fintech startups, in terms of legal risks, one should remember the active role of the local regulator, which has broad powers in the area of ??accountability. In addition, there is a clear process of withdrawing many fintech spheres from the “gray zone” in regulation. Thus, either existing regulation with greater requirements is applied to them, or a new one arises, which cannot be ignored.


Lithuania has only recently become a hub for fintech startups, but the number of companies established there is only growing. Fintech attracts low taxation and access to the European market.


Singapore's ambitions to become the premier fintech capital are high. He is actively moving in this direction and this is manifested in regulation. The local regulator is careful to impose restrictions and requirements, trying not to create barriers to the establishment of startups.

Hong Kong

Hong Kong, as the second largest fintech leader in Asia, is also trying to maintain a favorable environment through soft regulation. 


Together with a developed traditional financial sector, Switzerland offers low taxation. In the canton of Zug, the corporate tax is only 14%, which makes it a fintech center in Switzerland. In addition, the country has strict security legislation, which makes it even more attractive to establish a company.

Fintech industry regulation

Choosing a jurisdiction for digital banks 

Most countries apply the old banking regulation without changing it. However, there are some exceptions. For example, in Singapore there are special licenses for digital banks:

  • Digital full bank (DFB);
  • Digital wholesale bank (DWB), which can only serve medium and small businesses and cannot accept deposits from individuals.

Thus, the local regulator issues clarifications for digital banks. 

The European regulator has also issued several clarifications on the extent to which the requirements for classic banks apply to digital ones. 

Fintech platforms for financing: registering a startup

These platforms act as intermediaries, receiving funds from some participants and transferring them to others. Therefore, to choose the place of registration, you need to pay attention to

  • Regulation of banking activities, in particular if you accept deposits;
  • Regulation of the securities market, for example if the platform issues securities;
  • Payment regulation.

Payment institutions usually have separate regulations. For example, in the EU, there are two types of licenses, depending on the volume of activities carried out:

  • Payment Institution (PI);
  • Electronic Money Institution (EMI).

Establishment of a crowdfunding platform

This regulation appeared almost completely in 2018 and is primarily related to the protection of users. Crowdfunding platforms usually require registration or a license. There are two types of crowdfunding:

  • The funds provided are a loan;
  • For the funds provided, the user receives a share in the company.

Belgium, Canada, Singapore, France, Sweden, the Netherlands and the United Kingdom have specific regulations of these two types. 

Automatic consulting on asset management (Robo-advice)

This fintech area remains untouched, and most states apply existing financial advisory legislation. They are also subject to licensing requirements. Therefore, when choosing a jurisdiction for a fintech project related to machine consulting, it is necessary to pay attention to the rules on financial consulting and the management of third-party funds.

Fintech Regulatory Sandboxes 

When choosing a place to establish a fintech startup, you should pay attention to the "regulatory sandboxes". Such a sandbox represents a regulatory-controlled environment where a fintech startup can test its product with a limited number of users or with limited volume. A startup can benefit from not applying some of the sandbox-specific requirements. Such sandboxes exist in the UK, Singapore, UAE and other countries. This is probably the best option for your fintech startup, so it's worth considering the various themed sandboxes.

Thus, choosing a jurisdiction for establishing a fintech startup is extremely difficult. There are many factors to consider in relation to your specific startup. Fintech is a very wide area, and therefore the locomotive countries in different sub-sectors are different. Even considering regulation may not be very helpful advice, as certain activities remain unregulated. But the analysis of taxation, which will have to be faced in any case, is universal. If you have any questions about setting up a fintech startup or need help choosing, please contact A4 Law Firm lawyers.


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