Case
Winguard is an IT company which uses artificial intelligence, mathematical modelling and historical data to provide its clients with turnkey solutions for working with databases and trading in sports events via a betting exchange.
The owners of the company turned to us for help with tax and legal planning. The main objective of our expertise was to structure the holding and open accounts with European banks.
In addition, it was necessary to make a strategic plan to enter new markets and bring the company in line with all legal and investment criteria to attract private and institutional investors.
In order to achieve this goal, the company had to be repositioned radically.
What was the difficulty?
The company works with a sophisticated intellectual product in a difficult, closed niche that is under the scrutiny of regulators: betting. This niche resonates with casinos, gambling, and other gambling.
Most European banks are reluctant to cooperate with such companies, even if they are not directly linked to the world of gambling. For banks, this sector is considered a high-risk zone for money laundering, roughly on the same level as the precious stones business.
Even though the company was not directly involved in traditional betting, it could still be associated with this field in the eyes of the public. For this reason, the correct market positioning of the company took on particular importance.
Tasks
- Conduct tax and legal planning.
- Set up and structure a European company.
- Prepare a strategic plan to enter the different markets.
- Open bank accounts in the EU and other countries.
- Create own fund to invest in both classic instruments and cryptocurrency.
- Attract private and institutional investors.
Solution
To begin with, we offered the client a change of jurisdiction. We needed to find a country where the company was allowed to operate, and therefore the banks would not be against this type of activity.
The main search criteria were:
- EU country or associate member of the EU.
- Should not be difficult to reinvest capital in other EU countries.
For a full assessment and selection of a suitable country, we conducted tax planning and the choice fell on Andorra.
Why Adnora?
- Andorra has some of the lowest tax rates in Europe.
- The process of opening an account is lengthy and complicated, but all banks, though not transnational, are internationally named.
- Good geographical location. The country is located between Spain and France: many European companies are registered here, and further investment in EU countries is a simple procedure.
- A large number of European companies are registered here, and subsequent investment within EU countries constitutes a simple procedure.
Then we moved on to the packaging of the company. Despite the fact that the company provides services in the field of betting, it refers to this type of activity indirectly, because the main product of the company is an algorithm based on mathematical modeling using artificial intelligence.
We took this idea as a basis and presented Winguard as an IT company that develops software for data analysis.
The analysis concerned not only sports betting, but also any commodity transactions on any platforms and marketplaces. The number of players on such platforms is huge, and the Winguard algorithm, based on artificial intelligence, analyzed the data and helped them to improve results and the platforms themselves to increase the flow of customers.
With this correct positioning, the attitude to betting was indirect, which means that there should be no problem with opening an account – it was a matter of “small”.
We decided to open an account in one of the most sophisticated banks in Andorra – Mora Bank, which is partially managed by Morgan Stanley Corporation.
Outcome
- During 6 months we have been preparing and submitting documents for the company to pass the identification process in the bank and, as a result, we have successfully passed this procedure.
- We proved the legal origin of funds of the founders of the company – the request was for the last 6 years.
- Obtained permission for foreign investment and withdrawal of funds to the largest Betfair betting platform.
- Prepared a concept and a step-by-step plan for creating a Fund investing in cryptocurrency and classic stock market instruments.
This project by the analytical company Winguard clearly demonstrates the difficulties a business may encounter during KYC procedures and how these challenges can be successfully overcome.
Our knowledge of banking specifics and risk management mechanisms, as well as Laduchi Consult’s experience in collaborating with financial institutions, enables us to achieve the desired results for our clients within the shortest possible timeframes.