Crypto company, offshore, UK and Canada owners

[9oTb]

Hello,

I think this question has been asked here before, but it's still not clear for me. Different threads have different answers, and I'm not sure if they are fully applicable for our situation.

Me (Canadian tax resident) and my friend (UK tax resident) are planning to open a crypto-related business. Thus, we need to open a company. Obviously, we want to do it offshore, but the main question is CFC.
We only plan to re-invest money we will get from the said business, so no transactions to UK/Canada. Also, everything will be in crypto (DeFi), no fiat.
If Canadian resident is the sole owner of the business, does company become CFC?
If we split the ownership 50/50, do we still need to pay UK/Canadian taxes?
We have a trusted person in HK, whom we can involve (e.g. make a director). Does it make the situation better? If we make him a director and create offshore in HK, what's the minimum amount we need to pay him as salary?


Finally, we need to make a company within a month, so it's not possible to change tax residency. We expect a profit of ~2-3M USD, so I don't think too complex schemas will worth it.

 

[Ready Offshore]

Hello,

I think this question has been asked here before, but it's still not clear for me. Different threads have different answers, and I'm not sure if they are fully applicable for our situation.

Me (Canadian tax resident) and my friend (UK tax resident) are planning to open a crypto-related business. Thus, we need to open a company. Obviously, we want to do it offshore, but the main question is CFC.
We only plan to re-invest money we will get from the said business, so no transactions to UK/Canada. Also, everything will be in crypto (DeFi), no fiat.
If Canadian resident is the sole owner of the business, does company become CFC?
If we split the ownership 50/50, do we still need to pay UK/Canadian taxes?
We have a trusted person in HK, whom we can involve (e.g. make a director). Does it make the situation better? If we make him a director and create offshore in HK, what's the minimum amount we need to pay him as salary?


Finally, we need to make a company within a month, so it's not possible to change tax residency. We expect a profit of ~2-3M USD, so I don't think too complex schemas will worth it.

Hi
Best way not to pay taxes is absolutely nominee company, including ownership and director.

As for residents taxes if you want do it as UK/Canadian owners, it is necessary to check inside native countries, because it can be lots of details here.

What i can say about offshore, you don't hide your ownership from native countries, most of offshore noticing government about companies, profits and etc by request or without.

As for director, you can check minimal wages in HK.

But as for HK, necessary have one residence director/secretary here.

 

[CaptK]

Hello,

I think this question has been asked here before, but it's still not clear for me. Different threads have different answers, and I'm not sure if they are fully applicable for our situation.

Me (Canadian tax resident) and my friend (UK tax resident) are planning to open a crypto-related business. Thus, we need to open a company. Obviously, we want to do it offshore, but the main question is CFC.
We only plan to re-invest money we will get from the said business, so no transactions to UK/Canada. Also, everything will be in crypto (DeFi), no fiat.
If Canadian resident is the sole owner of the business, does company become CFC?
If we split the ownership 50/50, do we still need to pay UK/Canadian taxes?
We have a trusted person in HK, whom we can involve (e.g. make a director). Does it make the situation better? If we make him a director and create offshore in HK, what's the minimum amount we need to pay him as salary?


Finally, we need to make a company within a month, so it's not possible to change tax residency. We expect a profit of ~2-3M USD, so I don't think too complex schemas will worth it.

I agree nominee is the best way until one of you move to a more tax friendly jurisdiction.

 

[9oTb]

Thanks guys.
Any advice on nominees?

Also, how "safe" is taking the nominee route? If they are owners on paper can't they basically do whatever they want with a company? Can they legally seize our crypto wallets? For example, sue us for "stealing" private keys?

As a total newbie that sounds pretty complex and risky for me (considering how many third-parties are invloved)

 

[shitcoinbro]

Thanks guys.
Any advice on nominees?

Also, how "safe" is taking the nominee route? If they are owners on paper can't they basically do whatever they want with a company? Can they legally seize our crypto wallets? For example, sue us for "stealing" private keys?

As a total newbie that sounds pretty complex and risky for me (considering how many third-parties are invloved)

Safe. They are just directors, not owners/shareholders.

They have a fiduciary duty to act in your best interest, if they try anything funny then they can lose their license and maybe go to jail

 

[9oTb]

If they are just directors won't the company be considered a CFC? As per CA law (as far as I can understand), it becomes a CFC if there is a canadian stake holder with >10% share

 

[CyprusLawyer101]

If they are just directors won't the company be considered a CFC? As per CA law (as far as I can understand), it becomes a CFC if there is a canadian stake holder with >10% share

Hi,
Each jurisdiction who has cfc rules, have their own model of cfc rules and for them professional advice should be saught as to their applicability and how they could be structured around (if possible). The replies you have recieved above mentioning nominees etc. do not apply if you wish to have a legit and defendable structure. Please consult a professional.
Good luck!