Situation as of 2021:
FATCA (USA automatic snitching)
CRS (all non-USA automatic snitching)
EU's DAC6 (financial consultant relating to EU automatic snitching of suggested offshore structures and tax optimisation strategies)
Mandatory beneficiary owner declaration (required by all financial institutions).
And the trend of snitching will only INCREASE not LESSEN year by year.
This leads to believe that offshores are pretty much dying. Unless you run the state and have direct control over tax man (Putin, Assad, Xi, etc...) there is little use of an offshore structure for you because eventually you WILL get snitched. Maybe tricks like Double Irish with a Dutch Sandwich might still work for large corps, but not for your average run-out-of-the-mill millionaire.
First question:
1) Is this an accurate or an inaccurate assessment of current situation and future tendencies? If you think I'm exaggerating, please tell me. I PRAY I am wrong.
FUTURE PERSPECTIVES AND ALTERNATIVES:
Since the mere fact of registering offshore companies and bank accounts is so unsafe and becoming ever increasingly transparent, we have to look at a parallel system.
CRYPTOCURRENCIES
A real way to hide wealth.
Interesting moments:
- Volatility. This can be solved by holding a stablecoin like USDC, USDT or any of the other developing stable coins that are tied to value of EUR/USD or other currency.
- Exchange reporting. Coinbase, Kraken... they might be forced to report users in following years due to CRS/FATCA pressure. Coinbase is already reporting. Solution: Decentralised Exchanges (DEXes). But problem is - they don't allow fiat on-ramp/off-ramp. Solution: wait until DEX implements USDC/stable coin exchange.
- Cashing out is a taxable event still. So if you want to cash out big, you need to pay tax. But if you cash out into a stablecoin, you don't need to pay tax as you didn't really exchange your crypto for fiat. Now... how do you use stablecoin? What if you take a loan AGAINST your stablecoin or AGAINST your bitcoin and use that as COLLATERAL? Apparently, this is a trick many billionaires use to avoid selling their assets and avoid paying gains / income taxes. You just put up your assets as collateral and live off interest. What are problems with this?
- Holding stocks, ETFs. Many crypto people want to cash out into stocks. This is still a real problem with no clear solution, because as soon as you register brokers, they are required to report according to CRS/FATCA.
2) Did I miss something and do you see any other opportunities to use the decentralised crypto system as a new offshore 2.0 that would be out of reach of governments and preying eyes.
3) Maybe there are ways to combine offshore with crypto to make it more effective?
FATCA (USA automatic snitching)
CRS (all non-USA automatic snitching)
EU's DAC6 (financial consultant relating to EU automatic snitching of suggested offshore structures and tax optimisation strategies)
Mandatory beneficiary owner declaration (required by all financial institutions).
And the trend of snitching will only INCREASE not LESSEN year by year.
This leads to believe that offshores are pretty much dying. Unless you run the state and have direct control over tax man (Putin, Assad, Xi, etc...) there is little use of an offshore structure for you because eventually you WILL get snitched. Maybe tricks like Double Irish with a Dutch Sandwich might still work for large corps, but not for your average run-out-of-the-mill millionaire.
First question:
1) Is this an accurate or an inaccurate assessment of current situation and future tendencies? If you think I'm exaggerating, please tell me. I PRAY I am wrong.
FUTURE PERSPECTIVES AND ALTERNATIVES:
Since the mere fact of registering offshore companies and bank accounts is so unsafe and becoming ever increasingly transparent, we have to look at a parallel system.
CRYPTOCURRENCIES
A real way to hide wealth.
Interesting moments:
- Volatility. This can be solved by holding a stablecoin like USDC, USDT or any of the other developing stable coins that are tied to value of EUR/USD or other currency.
- Exchange reporting. Coinbase, Kraken... they might be forced to report users in following years due to CRS/FATCA pressure. Coinbase is already reporting. Solution: Decentralised Exchanges (DEXes). But problem is - they don't allow fiat on-ramp/off-ramp. Solution: wait until DEX implements USDC/stable coin exchange.
- Cashing out is a taxable event still. So if you want to cash out big, you need to pay tax. But if you cash out into a stablecoin, you don't need to pay tax as you didn't really exchange your crypto for fiat. Now... how do you use stablecoin? What if you take a loan AGAINST your stablecoin or AGAINST your bitcoin and use that as COLLATERAL? Apparently, this is a trick many billionaires use to avoid selling their assets and avoid paying gains / income taxes. You just put up your assets as collateral and live off interest. What are problems with this?
- Holding stocks, ETFs. Many crypto people want to cash out into stocks. This is still a real problem with no clear solution, because as soon as you register brokers, they are required to report according to CRS/FATCA.
2) Did I miss something and do you see any other opportunities to use the decentralised crypto system as a new offshore 2.0 that would be out of reach of governments and preying eyes.
3) Maybe there are ways to combine offshore with crypto to make it more effective?
Last edited:
