How to do an STO in Singapore

Ressos is an international law firm in Singapore with extensive experience in blockchain/cryptocurrency, tokenisation and digital token sales. We have extensive expertise covering a wide range of STO projects, ranging from private placements of securities to retail tokens across different underlying asset classes including securities, cryptocurrencies, real estate and precious metals.

What is a Security Token Offering?

Security token offerings can be viewed as a specialised form of corporate financing. In consideration for his payment to the Issuer, the investor receives a digital token which may be connected to a right to receive a dividend, a revenue share, a voting right, a license, a property right or a right to participate in the future performance of the Issuer. Subject to any contractual limitations, there are no restrictions on the part of the Issuer with regards to how the raised funds may be used. Since there is no dilution of equity, STOs are an attractive alternative to venture capital and other traditional forms of equity financing.

Tokenisation, the process of creating a digital token from an underlying asset such as shares in a company or a physical asset, is widely viewed as a game-changer for financial markets. A natural evolution of the traditional concept of securitisation, tokenisation is creating a highly liquid trillion-dollar market of digital securities. This is an unprecedented opportunity for companies wishing to raise funds.

Services

Ressos has considerable expertise in STO matters and is currently working on a large number of projects, including asset-backed tokens, stablecoins, tokenised investment funds and other types of securities.

In particular, we advise on whether certain token offerings will be viewed as securities by regulators internationally and assist clients in complying with applicable securities laws and regulations.

We offer a "one-stop" full service solution for all legal, tax and corporate services aspects of an STO structured through Singapore, Hong Kong or offshore jurisdictions. In particular, we have notable experience in the structuring and implementation of hybrid structures involving a token issuer in Singapore or Hong Kong with an underlying offshore fund structure. We support clients in obtaining legal opinions (for example in respect of the Securities and Futures Act, Cap. 289 of Singapore the Singapore Payment Services Act 2019) and, where required, licenses such as a Singapore Capital Markets Services license.

Where required by local regulation or specific client requirements, we work in conjunction with Singapore advocates and solicitors, tax consultants and other services providers. We have strong relationships with specialised consultancies and financial advisors, and are able to facilitate fundraisings and capital introductions.

Fees and cost

Our fee structure is value-based and broken down into stages and milestones, with flat-fee service packages allowing for transparency and budgeting without unwanted surprises.

Ressos provides or facilitates the full range of legal, tax and administrative services required for a successful Security Token Offering. All Singapore law advice is provided through duly authorised Singapore advocates and solicitors.

Legal structuring advice in respect of the token-issuing entity and any underlying offshore corporate structures
Tax structuring and advising on all tax aspects of an STO structured through Singapore, Hong Kong or offshore jurisdictions
Legal Opinions to provide the Issuer, its directors and external parties (e.g. banks, token exchanges) with comfort in respect of the legal nature and regulatory status of the digital token to be issued
Reviewing of Pitch Decks, Fund Summaries and White Papers, in particular with regards to 'forward-looking statements' and disclaimers for marketing documentation
Drafting or reviewing of an Information Memorandum or formal Prospectus
Drafting or reviewing of Data Privacy Policy
Drafting or reviewing of Securtity Token Pre-Sale Agreements
Drafting or reviewing of SAFT and Security Token Subscription Agreements
Drafting or reviewing of a comprehensive AML Manual for the Issuer
Incorporation of Singapore companies as token issuing special purpose vehicles or fund management companies
Establishment of investment funds and collective investment schemes, in particular hybrid structures combining a Singapore token issuer with Cayman Islands limited partnership (LP) or limited liability company (LLC) fund vehicles;
Reviewing of Websites and Marketing Materials
Professional Director Services for entities incorporated in Singapore, Hong Kong or offshore (nominee director services for token Issuers)
Corporate secretarial support for incorporated entities
Facilitation of Bank Account Opening for token issuers and operating companies
Custody services
Law firm escrow solutions

Ressos provides a full service solution for the formation and ongoing administration (including tax/accounting and compliance) of all legal entities required for a successful STO in Singapore and Hong Kong.

We provide comprehensive advice on all aspects of anti money laundering compliance in connection with Security Token Offerings in Singapore and Hong Kong. Our advice is provided with clarity and confidence. We provide clients with a customised STCO-related KYC/AML manual in order to manage their regulatory and reputational risk, and to protect their business. We cooperate with first tier compliance service providers and are able able to conduct manual client due diligence and enhanced due diligence on prospective investors using standard practices and the screening tools most widely used within the financial services industry (WorldCheck etc.).