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Legally cash out $1+m in crypto - what are the options?
- Thread starter hallcall
- Start date
what if you bought a property there, held it 5+ years sold it and then wire the money out, are they still going to ask for SoF from 5+ years ago? What if you don't keep your documents that long?
It's a common practice now to ask for a full story of the money.
1) Enstablish tax residency in UAE (you can do it with a Freelancer Visa for $3-4k per year)
2) Incorporate a foreign-owned US LLC and open few bank accounts through Mercury/Novel/Wise etc.
3) Sell crypto through Binance P2P and send fake Consulting/Marketing invoices to your bank when requested.
You should now have your 0% taxed money in a bank account and a clean Source of Wealth to provide in the future (business profits as self-employed).
2) Incorporate a foreign-owned US LLC and open few bank accounts through Mercury/Novel/Wise etc.
3) Sell crypto through Binance P2P and send fake Consulting/Marketing invoices to your bank when requested.
You should now have your 0% taxed money in a bank account and a clean Source of Wealth to provide in the future (business profits as self-employed).
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Wouldn't it be likely that the banks will ask for proof of work too for these amounts
I'm not sure I'd like to try the fake invoices route in a country such as UAE... risking life changing repercussions.
Yes pretty much this. I doubt the Delaware llc path here is going to work.
I have consulted with some local law folks on Option 6. The important points (nothing new really, just the obvious things):
- One is already in problems with tax from not declaring trades when they happened over the years, or declaring profit from sales the year they happened, declaring staking profits, declaring interest from lending.
- One can use a lawyer to legally try and declare the funds in one's current country, apologize and come to some deal with the tax office, but with penalties it's likely going to be over 50% in tax. Also, there is a risk of owing more than 100% if trades caused too much tax burden.
- One runs the risk of criminal prosecution (and jail) when trying to declare it (even when paying penalties) due to the amount of money involved. Declaring only part of it (the part with the clearer history of where it came from) means the rest can never be declared again as it would show that one had willingly withheld information at the previous declaration.
- Moving countries doesn't matter, one still owes tax to the country one was in when trades happened.
- Moving countries to establish a different tax residency and surrendering residence here can be seen as fleeing from tax duties/crime which makes it a worse crime.
Now the not purely advisable stuff (from a lawyer standpoint):
- Crimes expire after 7 years. One could theoretically do nothing for 7 years. (A bit more complicated than that)
- Realistically, one's current country does not know about one's holdings, so moving countries can be an option unless someone reports them. One should make sure not to use CEXes or wallets that can be traced back to them from their current country (don't use local exchanges).
- One could continue moving small amounts and fly under the radar.
- One could incorporate abroad somewhere and have the corp own the funds, however that does not change the tax liability for the past, and obviously would need to get the money into the corp in the first place (like have the corp sell something). But it's advisable to get a corp anyway for all future trades to not incur more tax debt.
- One could (as someone suggested) do something like creating NFTs and have them get bought, then declare as normal revenue. This needs to be solid, as audits happen quite often on small businesses here.
- One could potentially have part of the money get gifted to them, and declare gift tax.
The lawyer advised that someone in this situation better calculate through everything and have them discuss with the tax office without revealing PII to get a feeling of what one would owe.
Realistically, even without having done anything shady, with the risk involved of even trying to properly declare it, moving country, waiting 7 years, offshore corp, or trying to slowly declare parts of it through small sales of things like NFTs could start to sound more attractive to someone in this situation. It's advisable to consult with other lawyers.
Keep them ideas coming, there are some good comments in this thread!
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Well it's not impossible but clearly not easy to find out, especially for Thailand lacking enforcement will.
However, if your crypto are held on an offshore CEX/broker it's definitely not in Thailand with proof. Risk is "not your keys not your coins".
But even if your lawyer is able to make a deal with the tax office (and you are satisfied with that deal) you would need to find a bank who accepts your vague SOF.
But I think a lot of young crypto investors have these kind of problems and the higher we go the more we see...
I need more clarification on point 3
you sell from the US LLC to yourself as a person taxable in Dubai or? What exactly is the money flow.
No just find somebody on crypto P2P exchanges that want to buy your crypto and wire EUR/USD to you.
USDT is very liquid and there are plenty of offers nowadays, even with a good rate 1.01-1.02 so eventually you end up earning a little bit from the cashout.
yeah i've done the p2p part but its unclear if you do that as the US llc or the dubai person resident
I guess you do it as the US llc owned by dubai tax resident, but in that case won't you still owe fed tax to the US?
It's better to conduct all the crypto sales through a business (i.e. an US LLC or similiar structure) than a individual bank account. Not only it gives you more credibility but it's way more easier to explain $20-30k incoming transactions from multiple third parties.
For question 2 if you own an US LLC as a non-resident it'll be treated as a disregarded entity so you pay taxes only in the UAE.
hm very interesting, i have us c-corp though, and obtained uae residency AFTER creating it, can I still escape the federal tax?
What entails the kyc verification procedure to get the account on BinanceP2P for US llc ?
You don't need a corporate account on Binance P2P. Sign up as individual, less hassle
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