By Thibault Serlet, Co-Founder and Chief Researcher of The Adrianople Group, creators of the Open Zone Map
Over the last five years, many Special Economic Zones have been built to focus on crypto currency and blockchain. They offer lucrative industry-specific incentives in hopes to attract innovative companies.
Special Economic Zones (SEZs) are business parks which have been granted exemptions from a wide variety of government regulations to stimulate economic growth. There are over 7,500 SEZs located in 70 countries worldwide. Typically, SEZs have targeted industries such as manufacturing, logistics, and shipping.
These new crypto SEZs have the promise to allow for entrepreneurial innovation in an otherwise still hyper-regulated environment. This article is a guide of every major crypto-SEZ that currently exists.
Currently, there are only three active zones specifically targeting crypto and fintech: the Cayman Enterprise City, Dubai Multi Commodities Centre, and Belarus High Technologies Park. However, dozens of zones are currently planned to target these industries.
Active Crypto SEZs
Cayman Enterprise City
The Cayman Enterprise City is an office park located in the Cayman Islands which opened in 2011, and started offering a regulatory sandbox for crypto projects in 2017. It is home to a wide variety of different enterprises, with fintech just being one of many industries that the zone targets. Cayman Enterprise City has a reputation for having an exceptionally friendly, talented, and efficient staff.
The zone is currently home to 250 tenants. Crypto companies such as Brave and Binance are incorporated here..
Tech City Cayman is a subdivision of the Cayman Enterprise City which focuses on fintech, crypto, and blockchain. Companies located there benefit from a wide variety of incentives. A wide variety of taxes are completely abolished such as corporate income tax, personal income tax, capital gains tax, VAT, and sales tax. There are also no government reporting or filing requirements for many activities which, in the US, would be governed by the SEC. Finally, all companies located in the zone can issue an unlimited number of business visas to employees or contractors.
Cayman Enterprise City’s infrastructure is very standard for office park SEZs, with nothing special. It is home to the University of the Cayman Islands. The zone has access to an international airport with direct flights to most US East Coast cities. The most notable aspect of the infrastructure is the zone’s location near a beachfront touristic area. The cost of electricity is $0.22 per kWh, is above the world average of $0.14 per kWh, making it unsuitable for mining.
The main risk with locating in the Cayman Enterprise City comes from the Cayman Islands’ reputation as a tax haven. Despite this reputation, the country was removed from the EU’s list of official tax havens in late 2020. Corruption, crime, and property rights issues do not pose any significant risks. The Cayman Islands should be considered to be a low risk jurisdiction.
Incorporating there takes on average 4 to 6 weeks, and costs roughly $20,000. Because the cost of living is high in the Cayman Islands, it is one of the more expensive zones on this list.
Dubai Multi Commodities Centre
The Dubai Multi Commodities Centre is located in downtown Dubai, in the UAE. The zone opened in 2002 to cater to the commodities trading industry. In May 2021, the zone announced …