How is the Nimiq Project Entity Structured?

1- Upon the launch of the token sale event a Special Purpose Vehicle comprised by a British Virgin Islands (BVI) private company was formed for the purpose of obtaining and administering those funds which would be used for the purpose of creating the Nimiq Network and its development and improvement.

2- BVI was chosen given its openness to crypto related business and for tax exposure reasons as the BVI has a territorial tax system that only taxed BVI private companies on their BVI sourced income.
3- The vision of the creators of the Nimiq Network was to grant elements of decentralization to the control of the funds raised in the token sale event for the purpose of having a collegiate governing body that would make decisions as to the use of such funds as opposed to a single person or entity.

4- In order to achieve this vision the BVI entity would not suffice as control on a BVI private entity is exercised by its directors and shareholders. Additionally, the concept of “shareholder” was far from the concept that was sought with the creation of the Nimiq Network which has always strived to be completely decentralized and have a horizontal approach to its control and management.

5- Therefore, it was proposed by the Nimiq Network legal counsel to establish a more robust and “decentralized” corporate structure that would more accurately represent the fundamental vision of the Nimiq Network. For this purpose it was agreed to form two US based non-profit foundations that would serve as the Nimiq Foundation and the non-profit charity driven entity: ImpactX Foundation. This second foundation only seeks to engage in charitable donations to projects considered of interest and importance to the vision of the Nimiq Network but does not exercise any control or ownership of the other entities. The Nimiq Foundation is and continues to be the controlling entity of the group and the entity on which the Nimiq Foundation Inc board has been elected and appointed, governing body that determines and decides on all major corporate and operational decisions of the Nimiq Network group of companies.

6- As it is known by the community, the Nimiq Network was built through a collaboration of scientists and independent contractors based out of several countries in the world. However, there has always been a significant contractor presence in both Europe and Costa Rica. To this effect it was also deemed legally necessary (for contractual engagements of different vendors, suppliers and service providers) to form “operational” companies present in Costa Rica, where the group of companies currently holds a “local” holding entity and an “operations” entity. The name of these two entities will not be disclosed solely because both of these companies currently hold banking relationships in Costa Rica and in Costa Rica there are no “crypto-friendly” banks (although Nimiq is certainly looking to solve that issue) so disclosing the name of these two companies would jeopardize such banking relationships which are instrumental in the operation of the company both in Costa Rica and in other jurisdictions.

7- With the same vision in mind, two UK based entities were formed, one to act as a “global” holding entity, whose sole purpose is to own shares in the different companies that comprise the Nimiq Network group of companies and a second, wholly owned subsidiary of the UK holding company, to serve as a European based operations company. This operations company has been instrumental in the signing of contracts and engagement in operations across Europe with the different contractors and vendors that the Nimiq Network group of companies has been working with. Similarly the name of both of these entities are not exposed here to not unnecessarily jeopardize these entities’ banking relationships.

8- The UK has a very beneficial “holding-company” regime that allows UK holding entities to receive royalty, interest and dividend payments without having any tax impact in the UK. Additionally, the UK has one of the lowest corporate taxes in all of the G20 countries, making it a great choice both from an operations perspective as well as from a tax efficiency perspective, something that becomes supremely relevant when trying extend a project’s runway.

9- Last but not least, the US was chosen as the jurisdiction to form the foundation as the US has been at the forefront of regulatory “clarity” for the crypto industry and it provides a robust rule of law and legality that is not always found in more popular “crypto-friendly” jurisdictions