Can you migrate to Kuwait and trade crypto with zero tax as a natural person?

[flyingadventures662]

Title says it all. For those going to suggest Dubai "if there is no specific reason" not to go there, there is: the climate. From what I see Kuwait is dry and Dubai is humid.

 

[Soundpeats]

You can of course, but getting inside Kuwait its a lot harder than UAE unless you have cash to invest. You need a sponsor/someone to employ you for the most part to get the residency, there is also an investors Visa. Bahrain is an option (but expensive to get in with a "golden Visa")
And Qatar wouldn't be an option since they aren't crypto friendly. People usually go to UAE for a reason

 

[flyingadventures662]

Thanks for the info. Bahrain looks also super humid.

https://weatherspark.com/y/150203/Average-Weather-in-Bahrain-Year-Round#Sections-Humidity

 

[Soundpeats]

Are you looking for an optimum country to trade cryptos and pay 0 tax as a professional trader ? Just guessing since of your past 2 threads

 

[Martin Everson]

Are you looking for an optimum country to trade cryptos and pay 0 tax as a professional trader ?

His looking for weather forecast

 

[khinkali]

His looking for weather forecast

It's Sunny in Georgia.

(That was a lie. We usually have lots of Sun but it's snowing this week. Still, most tax professionals here seem to consider crypto gains to be exempt income which is a bonus.....)

 

[flyingadventures662]

His looking for weather forecast

Both

Seriously, yes, looking for a country with zero tax to trade crypto as a professional trader, but weather matters. I have some health issues that do not tolerate humidity at all so it's a deal breaker for me.

I know there are no so much such options though. Apart from Kuwait if Switzerland is confirmed it could be interesting to consider.

If not, I may spend some years traveling around and paying tax in my home country. Which through an offshore company is 5% on withdrawn dividend, money-wise absolutely acceptable.

 

[Soundpeats]

Both

Seriously, yes, looking for a country with zero tax to trade crypto as a professional trader, but weather matters. I have some health issues that do not tolerate humidity at all so it's a deal breaker for me.

I know there are no so much such options though. Apart from Kuwait if Switzerland is confirmed it could be interesting to consider.

If not, I may spend some years traveling around and paying tax in my home country. Which through an offshore company is 5% on withdrawn dividend, money-wise absolutely acceptable.

what about corporate tax ? You mean you live in "A" country and have an offshore company in "B" where you only pay the 5% tax on dividends ?

I think Switzerland is probably your best bet (If all you do is trade). Not sure if Puerto Rico suits your situation but I do believe they don't tax crypto gains. As a day to day trader a lot of great options like Malta, Portugal, Germany go out the window and I dont imagine you want to live in Bermuda or some remote island.

Edit: Forgot about Georgia, maybe that's worth checking

 

[Marzio]

Still, most tax professionals here seem to consider crypto gains to be exempt income

I've read that since bitcoin is not sourced anywhere specifically in Georgia is tax free but don't know if RS shares the same opinion.

I think Switzerland is probably your best bet (If all you do is trade).

If all he does is trading Swtizerland treats it as professional income so it is taxed.

Instead if it's a side hustle and trades are infrequent is tax exempt.

 

[flyingadventures662]

what about corporate tax ? You mean you live in "A" country and have an offshore company in "B" where you only pay the 5% tax on dividends ?

I think Switzerland is probably your best bet (If all you do is trade). Not sure if Puerto Rico suits your situation but I do believe they don't tax crypto gains. As a day to day trader a lot of great options like Malta, Portugal, Germany go out the window and I dont imagine you want to live in Bermuda or some remote island.

Edit: Forgot about Georgia, maybe that's worth checking

Well if it's an offshore company you have zero corporate tax there + local dividend. And in my country the dividend is 5%. But that's not true for most EU countries. Not sure just about Estonia (and not sure if I want to live there), but it seems in most places the dividend is at decent rate.

If I jump on different countries for less than 6 months and keep my tax residency where it is, I will keep the 5% which is fine. I would settle in another country if I know that I can get low tax residency by living there and if it is a nice place to live in.

No offence for Georgia, I have never been there, so I might be wrong. But does not sound like a cool country to live in. At the end of the day, as I said, in my home country Bulgaria I will be paying 5% even if I live here but I don't like it and I doubt it will be better in Georgia.

In Portugal and Switzerland I am quite sure if you are a pro trader they will tax you decently. I don't have info for Germany and Malta offering low taxes for local residents.

Money is not everything, I think I would accept even up to 10% if it's a nice country.

 

[khinkali]

I've read that since bitcoin is not sourced anywhere specifically in Georgia is tax free but don't know if RS shares the same opinion.

That view comes from a legally binding Public Decision from the Revenue service. There is no official English version of that document and Google Translate isn't particularly accurate in Georgian but it's good enough to get the gist of things. The decision does exempt gains from mining (which was the main purpose of the decision) and of course does not exempt being paid for goods or services in crypto.

Most people I have discussed this with (including Georgian tax auditors) believe that crypto trading at whatever frequency is exempt because the reasoning includes concepts such as "not located in a specific location". However, there are always ways to read the tax code differently and I think there is a small chance that the RS will come up with another Public Decision to "clarify" that professional trading is "other income" in the territory of Georgia and therefore not exempt.

No offence for Georgia, I have never been there, so I might be wrong. But does not sound like a cool country to live in.

This really comes down to your personal taste and lifestyle. Western Europe, Caucuses, South East Asia, Middle East each appeal to different folk.

 

[Martin Everson]

At the end of the day, as I said, in my home country Bulgaria I will be paying 5% even if I live here but I don't like it and I doubt it will be better in Georgia.

Damn you live in Bulgaria and want to save taxes? There are people and firms encouraging people to move to Bulgaria to save taxes. You must be an extreme tax saving maximalist or earn millions to want to make the move.

 

[flyingadventures662]

Damn you live in Bulgaria and want to save taxes? There are people and firms encouraging people to move to Bulgaria to save taxes. You must be an extreme tax saving maximalist or earn millions to want to make the move.

I guess you are referring to my decision to move out of Bulgaria and not to the offshore company to save further here. Because if all it takes to save further 5% is to pay a couple if thousands per year, why not do it?

To avoid confusion, no, I am not moving out of Bulgaria for tax purposes but for personal purposes. The thing is when I move if I settle somewhere I might have to pay much more.

Not sure how DTA works for natural persons, but if I move to Portugal, for example, and buy an apartment there, but don't have one in Bulgaria I guess I would still have to pay the Portuguese tax wouldn't I?

So as I said I am fine even with some low tax if it's a nice country, otherwise I might keep traveling around which is also cool.

BTW I wouldn't recommend Bulgaria as a place to move if you are making a lot of money at least if you don't use offshore so your business is subject to the local tax authorities. That's other topic and a long story but in general I am not sure how safe it is. There's a new government now and the climate is changing. But the prosecution is pure mafia affiliated with the ex-governement. Depends also on business sector, etc... but it's a public secret they blackmail the profitable businesses. And over 1M in profit you get listed in the "special watchlist". Things might be changing now but it's early to tell.

You can Google Bulgaria ex prime minister Borissov arrested for blackmailing a billionaire literally days ago. The information is public since 2020 but now the new government at least had the police power to arrest him. But the prosecution stopped the process and they had to release him.

 

[Martin Everson]

So as I said I am fine even with some low tax if it's a nice country, otherwise I might keep traveling around which is also cool.

Just do that and keep it simple.

guess you are referring to my decision to move out of Bulgaria and not to the offshore company to save further here. Because if all it takes to save further 5% is to pay a couple if thousands per year, why not do it?

Sorry how much tax are you actually paying currently so I get an idea?

BTW I wouldn't recommend Bulgaria as a place to move if you are making a lot of money at least if you don't use offshore so your business is subject to the local tax authorities.

Don't worry my feelings on Bulgaria are well documented on this site.

 

[flyingadventures662]

Many thanks again for commenting. Sorry I prefer not to share my tax amount.

 

[Martin Everson]

I actually meant tax rate not value but fair enough. Have a nice day.

 

[flyingadventures662]

Sorry, didn't get it. Currently it is 10%, and now I am in the process of opening the offshore to cut it to 5% dividend. But it still makes a big difference also that with the offshore you pay it just on withdrawn dividend and not on all annual profit.

 

[Bill D]

Sorry, didn't get it. Currently it is 10%, and now I am in the process of opening the offshore to cut it to 5% dividend. But it still makes a big difference also that with the offshore you pay it just on withdrawn dividend and not on all annual profit.

Are you sure, I saw here and there that above 3 transaction a year is 15%

Also Bulgaria has permanent establishment rules so that if you manage your offshore from Bulgaria, shouldn't it be taxed as a bg company ?

Thirdly is that even possible to get a bank account for offshore crypto trading company while this is already almost impossible for individuals ?

 

[flyingadventures662]

Are you sure, I saw here and there that above 3 transaction a year is 15%

This is the statement of the tax authorities. And is actually 15% tax + social, health, etc... (which is another 30-40% until some level, namely until you earn up to 3K BGN profit per month you pay these 30-40% on this up to 3K. But if you earn more than 3K BGN per month you will not pay more social contribution on what is above those 3K). And from 1st April this number will be 3,400 BGN.

As I said, the tax agency has a statement claiming that over 3 transactions represent economical activity and are taxed as such in the way I described above. Now if they are right or wrong is another question. My lawyer has written a nice explanation why this statement contradicts the law based on multiple arguments. He told me that generally people do not pay taxes on crypto trading as an economic activity (please note that mining is an exception though!). His strong conviction is that indeed this is not economic activity and he is ready to defend this thesis in court. So while I can not advice you to do the same I listen to my lawyer and do not represent it as economic activity and thus will pay 10% on the annual profit. You will, however, hear from some accountants that you should pay it as economic activity.

Also Bulgaria has permanent establishment rules so that if you manage your offshore from Bulgaria, shouldn't it be taxed as a bg company ?

I researched this a lot and I was assured by multiple specialists that if you have a remote nominee who manages on paper the company from the other country they accept it as managed from there and you pay just the dividend. Obviously you must not have an office here as well - which is the case when crypto trading. But you should keep silent that you are working from here, of course. If asked questions (quite unlikely IMO), I was advised to say: "For more details, please refer to my director". But please note that the local tax authorities in general know perfectly well how offshore companies are working and they tolerate it. Some big mafia guys related to the ex-government and even the current finance minister have offshore companies, so the laws regarding this are made in a "soft way" in comparison to other countries.

Thirdly is that even possible to get a bank account for offshore crypto trading company while this is already almost impossible for individuals ?

I would say it's absolutely impossible in Bulgaria. First, all banks here are super anti-crypto and you can barely withdraw anything directly. Currently there is one bank which sometimes allow some transfers and even that's not guaranteed. I am sure they will not open a bank account even for a local crypto company. Let alone for an offshore one.

 

[Bill D]

I would say it's absolutely impossible in Bulgaria. First, all banks here are super anti-crypto and you can barely withdraw anything directly. Currently there is one bank which sometimes allow some transfers and even that's not guaranteed. I am sure they will not open a bank account even for a local crypto company. Let alone for an offshore one.

Thank you, nice sum up, yes I heard more and less the same as you did from accountants and consultants.

Looking for the same as you, so very interested in your threads, with UAE seeming to be a not so reliable solution now that 9%+VARA+grey list (these three could induce uncertainty on accessing all crypto platforms, and on the risk of taxation etc, penalty, so I prefer to wait and see before considering this as an option)

What I looked into so far was
-Andorra : some day traders seemed to settle there and pay 0%, but that's only on Stocks trading, does not apply to cfd or crypto or dividends payments, taxed at 10% so no better than Bulgaria and way more complicated to get the residence
-Mauritius : some traders seems also to pay 0%, but I think it shouldn't apply to professional day traders who should be taxed there 10 or 15%, not better
-Malta : with the remittance it's possible to reach 5%, but this will incur heavy yearly audits because you would need to make the trading throught your onshore maltese, and the setup works if you would be able to open bank account for your crypto trading Maltese onshore and your holding offshore, to make the remittance setup work which some said it's difficult or impossible
-Georgia : could be 0% on crypto trading, but not that clear and there is some retroactive risk, but it's clearly not 0% on traditional markets trading but it's way way worst than 10% so not a good option imo (stocks, cfd, futures, etc), the best for a trader is to have 0% on any sort, because you might one day or an other start to trade, even crypto on other platforms (for example trade crypto companies stocks)


it seems there is no perfect solution anymore for day traders in the aforementionned countries, if considering purely the tax optimisation aspect, or maybe I am missing something (I didn't consider Bahamas because flight connections to europe are too complicated and long).