Cash out profits from an offshore company in a zero income tax country?

[gmbh]

Hi,

I live with non dom-status in Cyprus and think about keeping my Belize company (which I use for crypto trading) until I live in a zero income tax country someday.

When I live in a zero income tax country, I would transfer the Bitcoin from the company into my private property.

Do you see a problem in this?

I could also cash out the profit of the company tax free in Cyprus, but then I would have to declare the dividends in my personal tax return and the Cyprus tax authorities would maybe check if they can tax the company here. Because of this I want to avoid it. According to my tax accountant I don't have to declare anything as long as I keep the profits in the company.

 

[Martin Everson]

When I live in a zero income tax country, I would transfer the Bitcoin from the company into my private property.

Do you see a problem in this?

No...but is having the assets in your name more a psychological barrier than any real need to do this?

I live with non dom-status in Cyprus and think about keeping my Belize company (which I use for crypto trading) until I live in a zero income tax country someday.

Btw OECD/EU led minimum taxation rules in future may end tax free countries in practicality - ask Andorra

 

[tsu458]

You need a high net worth to get a bank account for the belize IBC. Next, the bank will have to check all your proof of funds / wealth stuff, you need to know if you can pass that - I think you are lowering your trust by using the belize IBC.

If you want to pay out dividends later - not depending on where you live - will your personal bank account accept dividends from the belize account jurisdiction? This is very important to think about.

The alternatives? Trading with the CY Ltd, but you won't get a bank account for that in cyprus. I would not rely on a estonia based EMI, where do you send your money if they shut down?

 

[gmbh]

No...but is having the assets in your name more a psychological barrier than any real need to do this?



Btw OECD/EU led minimum taxation rules in future may end tax free countries in practicality - ask Andorra

The real need to do this for me is If I want to buy a house for example, I assume it would be a lot easier to buy it with funds in my name than in the name of a Belize company? I assume it is not possible at all to buy real estate or other expensive things with a Belize company?

Which law do you mean regarding the end of minimum taxation? And why should this have an impact of taxation in Belize?

You need a high net worth to get a bank account for the belize IBC. Next, the bank will have to check all your proof of funds / wealth stuff, you need to know if you can pass that - I think you are lowering your trust by using the belize IBC.

If you want to pay out dividends later - not depending on where you live - will your personal bank account accept dividends from the belize account jurisdiction? This is very important to think about.

The alternatives? Trading with the CY Ltd, but you won't get a bank account for that in cyprus. I would not rely on a estonia based EMI, where do you send your money if they shut down?

I asked several banks for a bank account and all denied it, even with my high net worth. I guess it is impossible to get a bank account for a Belize company which does crypto trading, at least at a traditional bank.

I would pay out the dividends in Bitcoin when I live in a zero tax income country. I think you are right that it would be difficult to find a bank which accept dividends in EUR or USD from a Belize company.

Yes the alternative is to trade with a Cyprus Limited but then I have to pay 12,5% taxes on all profits the company generates. If I would use a Cyprus Limited I would only need a bank account to sell 12,5% of all profits I make in Bitcoin against EUR to pay the taxes. I don't want to sell Bitcoin against EUR for my own expenses. So I would never have a big amount of money in the bank account. I have it in Bitcoin all the time. Apart from the money I need to pay the taxes.

 

[JackAlabama]

The real need to do this for me is If I want to buy a house for example, I assume it would be a lot easier to buy it with funds in my name than in the name of a Belize company? I assume it is not possible at all to buy real estate or other expensive things with a Belize company?

Which law do you mean regarding the end of minimum taxation? And why should this have an impact of taxation in Belize?


I asked several banks for a bank account and all denied it, even with my high net worth. I guess it is impossible to get a bank account for a Belize company which does crypto trading, at least at a traditional bank.

I would pay out the dividends in Bitcoin when I live in a zero tax income country. I think you are right that it would be difficult to find a bank which accept dividends in EUR or USD from a Belize company.

Yes the alternative is to trade with a Cyprus Limited but then I have to pay 12,5% taxes on all profits the company generates. If I would use a Cyprus Limited I would only need a bank account to sell 12,5% of all profits I make in Bitcoin against EUR to pay the taxes. I don't want to sell Bitcoin against EUR for my own expenses. So I would never have a big amount of money in the bank account. I have it in Bitcoin all the time. Apart from the money I need to pay the taxes.

You can buy house with bitcoin in several countries directly with seller or by using a skilled real estate broker who does these things.

You need to have the high net worth on the bank balance and not in crypto . That is how it works. They need to earn from you and milk you like cow.

I am pretty sure you will find a bank if you tell them you have like 30M worth of BTC which you need help liquidating and you want to park the proceeds with their wealth management program lol

 

[gmbh]

You can buy house with bitcoin in several countries directly with seller or by using a skilled real estate broker who does these things.

You need to have the high net worth on the bank balance and not in crypto . That is how it works. They need to earn from you and milk you like cow.

I am pretty sure you will find a bank if you tell them you have like 30M worth of BTC which you need help liquidating and you want to park the proceeds with their wealth management program lol

Yes I can buy a house with Bitcoin maybe but if the Bitcoins are property of the company, then the company has to be the buyer in the contract and not me as private person? And I think in Western countries nobody wants (or can) sell his real estate to a Belize company which pays in Bitcoin?

The banks I asked said they wouldn't open a bank account for a Belize company in general. That the company trades crypto doesn't make it better. Even with 30m I think they wouldn't open an account for this setup.

 

[JackAlabama]

Yes I can buy a house with Bitcoin maybe but if the Bitcoins are property of the company, then the company has to be the buyer in the contract and not me as private person? And I think in Western countries nobody wants (or can) sell his real estate to a Belize company which pays in Bitcoin?

The banks I asked said they wouldn't open a bank account for a Belize company in general. That the company trades crypto doesn't make it better. Even with 30m I think they wouldn't open an account for this setup.

It is highly questionable to buy a house in eu at this point in time. Maybe open a local company with the belize as head and buy the house with the local company.
What country do you target?

 

[gmbh]

It is highly questionable to buy a house in eu at this point in time. Maybe open a local company with the belize as head and buy the house with the local company.
What country do you target?

Thanks for the idea.

I don't target EU. But maybe USA or Switzerland.

 

[JackAlabama]

Thanks for the idea.

I don't target EU. But maybe USA or Switzerland.

Switzerland is tricky for many reasons and there are restrictions for foreigners.
You should find a trusted lawyer or fiduciary or someone like that in the region you want buy. If they are well connected and know their stuff, a lot is possible.

 

[no1d]

I have something in mind, wouldn't be possible to register a holding company with 0% dividend tax as a shareholder of your Belize IBC? I'm investigating this solution for my SEY IBC.
If its possible then you could cash out profits tax free.

 

[Martin Everson]

The real need to do this for me is If I want to buy a house for example, I assume it would be a lot easier to buy it with funds in my name than in the name of a Belize company? I assume it is not possible at all to buy real estate or other expensive things with a Belize company?

Buying for example high end property with funds from your company is normal I have done it firsthand. It is in fact far easier to show my companies audited financials and this speeds up and simplifies the due diligence in the buying process. In regards to using a Belize company it depends on whether you keep financial records etc and also where you are buying property.

Which law do you mean regarding the end of minimum taxation? And why should this have an impact of taxation in Belize?

I said only "rules". Global taxation rules are coming whether you like it or not i.e checkout BEPS 2.0. But lets not get off subject.

 

[gmbh]

Buying for example high end property with funds from your company is normal I have done it firsthand. It is in fact far easier to show my companies audited financials and this speeds up and simplifies the due diligence in the buying process. In regards to using a Belize company it depends on whether you keep financial records etc and also where you are buying property.



I said only "rules". Global taxation rules are coming whether you like it or not i.e checkout BEPS 2.0. But lets not get off subject.

Thanks for the info. I don't have audited financials for the Belize company. Is it even possible to get audited financials for a company from a country with such a reputation like Belize has? I mean, audited financials that are accepted in other countries.

I assume if I want to buy real estate in a country for example in South America, the Belize company wouldn't be a problem. But if I want to buy in the USA, are audited financials of a Belize company "accepted" there? I guess if you want to buy real estate in the EU in the name of a Belize company which has audited financials, it wouldn't be possible in most countries. The risk for the seller that anybody from the tax authorities would say that this is or is connected to black money would be too high. As I said, this is just my assumption. I don't know for real.

I can imagine if I would just transfer the Bitcoins from the company to myself nobody would ever ask, because unlike bank accounts, Bitcoin wallets are not (yet) in any name, but if I would have to proof it someday that I declared the Bitcoins in any tax return it would be not possible. But this is just theory anyway...

So it seems that I have to accept it is better for me to pay 12,5% with a Cyprus company and be safe. It's very tempting to pay 0% tax and I think there will be ways to get away with it but I think my risk profile is not made for this.

 

[Martin Everson]

Thanks for the info. I don't have audited financials for the Belize company. Is it even possible to get audited financials for a company from a country with such a reputation like Belize has? I mean, audited financials that are accepted in other countries.

lol...yes its possible i.e HLB

I assume if I want to buy real estate in a country for example in South America, the Belize company wouldn't be a problem. But if I want to buy in the USA, are audited financials of a Belize company "accepted" there? I guess if you want to buy real estate in the EU in the name of a Belize company which has audited financials, it wouldn't be possible in most countries. The risk for the seller that anybody from the tax authorities would say that this is or is connected to black money would be too high. As I said, this is just my assumption. I don't know for real.

It depends on how the transaction is done. In general the transaction will be completely down to the banks involved. You say Belize to a bank and they think tax evasion. In countries like Dubai where there is no tax its not even a concern. Many real estate agents will explain how to do it using their accounts.

but if I would have to proof it someday that I declared the Bitcoins in any tax return it would be not possible. But this is just theory anyway...

This is actually where we are now. I have been asked to provide a tax return by a bank and a broker before and they where not even in the EU and that was in 2017 . Banks are checking for untaxed money these days especially Swiss banks.

So it seems that I have to accept it is better for me to pay 12,5% with a Cyprus company and be safe. It's very tempting to pay 0% tax and I think there will be ways to get away with it but I think my risk profile is not made for this.

if you have to pay 12.5% is not a great deal. You can gain or loss that in a couple of hours with crypto

 

[gmbh]

This is actually where we are now. I have been asked to provide a tax return by a bank and a broker before and they where not even in the EU and that was in 2017 . Banks are checking for untaxed money these days especially Swiss banks.

That's the point. Even if I would have an audit for the Belize company, I think there is a risk that in some years the majority of countries will just say they don't accept it. Or at least the financial institutions like banks or brokers are not allowed to accept it. Maybe on the paper, but practically it will be not possible to use the Bitcoins which were gained with a Belize company. Maybe if I hodl them some decades until our financial system collapsed, but maybe this takes another 50 years.

There are so many websites which tell you "come to Cyprus, set up an offshore company and pay zero taxes". I believed this too and before I came to Cyprus even the accountants/law firm told me that. With my experience now I think it's in a grey area because of CFC rules and even if you get away with it, there are several other problems which I couldn't solve until today when you have an offshore company and live in Cyprus.

I think I have to see it like you said in your last sentence. Just pay the 12,5% and try to make it back in a couple of hours.

 

[karishi]

I'm not an expert on this, but in general, why would you want to have an house in your name? That's a big risk, especially in the EU (don't know about USA but might be similar) as in many EU countries, transactions to buy properties are the first thing that trigger controls by tax authorities. So you would immediately be under scrutiny and you will need to provide answers to where your wealth comes from and so on. And will be under scrutiny for some time, so if you stay more than 183 days in that country, your Belize company would be managed from that country and it's income liable to be taxed. I feel that renting has much less scrutiny and it's a much better fit, although this is just my feeling, I think that staying off the radar as much as possible is better, and nothing gets you on the radar than buying a 2 million house with money coming from Dubai where you lived one year just to monetize the profits.

 

[gmbh]

I'm not an expert on this, but in general, why would you want to have an house in your name? That's a big risk, especially in the EU (don't know about USA but might be similar) as in many EU countries, transactions to buy properties are the first thing that trigger controls by tax authorities. So you would immediately be under scrutiny and you will need to provide answers to where your wealth comes from and so on. And will be under scrutiny for some time, so if you stay more than 183 days in that country, your Belize company would be managed from that country and it's income liable to be taxed. I feel that renting has much less scrutiny and it's a much better fit, although this is just my feeling, I think that staying off the radar as much as possible is better, and nothing gets you on the radar than buying a 2 million house with money coming from Dubai where you lived one year just to monetize the profits.

Thanks, good point and I think you are right.

The purchase of a house is more or less an example. So the next question would be how hard it is to pay rent with a Belize company... with Bitcoin...

Maybe I just have to move to South America in a few years, I just assume that there isn't such a crazy regulation like in Europa/USA.

I get headaches because of this bureaucratic bulls**t I think for several weeks now...

 

[karishi]

@gmbh it depends on where you want to live. To live in the a EU country, for example, you need to get an annual residential permit and how easy to get it depends on your country of origin. For example in Spain, if you are from EU, they require you to put 9600€ on a spanish bank account and have a spanish health insurance and they give you a green nie which is valid for one year. Then you can easily rent things paying in cash, you might even skip the contract if you pay full in advance. So you would simply need to change your BTC in cash, open the account (CAIXA doesn't make too many questions), pay the rent, and you are good to go, this is basically a tourist visa where you are telling the spanish government that you are living in spain without working. As long as you stay under the radar nothing should happen. If you need to get on the radar, maybe you have children that needs to go to school, you will need to declare yourself as an independent contractor, pay your monthly quota + a part of the profits, and then you will be part of the system. You will of course make invoices to your belize company, which you need to keep off the radar as much as possible and so on. It has of course some risks, but as long as you live a life which is in line with what you declare, it's really hard to get controlled. Different countries have different rules, I'm telling you the spanish rules because I know them.
Otherwise simply go and live in dubai.

 

[melzvy]

Not sure if this may work but:

crypto to physical gold, then physical gold to money -> buy the house or whatever...
maybe some real state sellers accept physical gold directly, so no need to convert it, and yes you may lose some money in the conversions...

Investigate golden visas in different countries, they offer permanent residency or even citizenship if you invest in real state, or bonds, or some other type of things...

Im not an expert so... maybe...

 

[JackAlabama]

Not sure if this may work but:

crypto to physical gold, then physical gold to money -> buy the house or whatever...
maybe some real state sellers accept physical gold directly, so no need to convert it, and yes you may lose some money in the conversions...

Investigate golden visas in different countries, they offer permanent residency or even citizenship if you invest in real state, or bonds, or some other type of things...

Im not an expert so... maybe...

Let me pls know how you want to transport physical gold to the country of your choice? Anything more than a few coins and you get fd up for sure. Prepare all your docs.
I would prefer a wire than handling phys gold.

 

[JackAlabama]

lol...yes its possible i.e HLB



It depends on how the transaction is done. In general the transaction will be completely down to the banks involved. You say Belize to a bank and they think tax evasion. In countries like Dubai where there is no tax its not even a concern. Many real estate agents will explain how to do it using their accounts.



This is actually where we are now. I have been asked to provide a tax return by a bank and a broker before and they where not even in the EU and that was in 2017 . Banks are checking for untaxed money these days especially Swiss banks.



if you have to pay 12.5% is not a great deal. You can gain or loss that in a couple of hours with crypto

Swiss banks are a compliance hell these days. It seems they want to make up all the past years by being overly compliant and opening their legs widely for the borg.
Be prepared for a lot of questions when dealing with any country deemed "suspicious". And that category is broad and wide lol.
This is especially true for non residents there.