Have I finally found my tribe? New member!

[bandulu warrior]

Hi all,

Its damn good to be here. It seems like you are my sort of people. I am looking forward to contributing my knowledge and hopefully receiving some golden nuggets of wisdom to allow me to continue my business activities in the most Tax efficient and regulatory abiding manner.

About me:
- High volume OTC broker of Crypto (since 2014)
- Day trader of US500, BTC
- Investor of Crypto
- UK based, with a UK limited company, Business account and corporate trading account

Solutions I need:
- Crypto Company formation in a Crypto friendly environment for the purpose of buying and selling cryptos peer to peer for fiat. I believe a license would be required, in a country that would allow me to legally deal with my clients in the UK.
- Crypto friendly bank account that ideally allows me to deposit GBP onto an crypto exchange. I would also be happy with EURO but ideally one that uses the chaps or faster payment system. They would need to be okay with large amounts of fiat going in and going out of my account on a regular basis. This would be possible with full disclosure of my banking activities.
- Company formation who's main activity is trading and investing of its own assets (my personal trading company). This would ideally be in the most tax advantageous location.

Feel free to pick my brains on:
- All things trading related.
- Peer 2 Peer brokering (GBP UK focused)
- UK Crypto friendly banks.
- Technical analysis of finical markets
- Anything, I am happy to help and contribute.

Looking forward to meeting you all!

 

[JohnnyDoe]

Welcome.
You are based in the UK, you do business in the UK, you should seek UK tax advice first.

 

[bandulu warrior]

Welcome.
You are based in the UK, you do business in the UK, you should seek UK tax advice first.

Thanks for your reply, I have 2 accountants sorting out my UK taxes. This is future prospects of moving the company or setting up new one abroad.

 

[JohnnyDoe]

Thanks for your reply, I have 2 accountants sorting out my UK taxes. This is future prospects of moving the company or setting up new one abroad.

If you reside in the UK, any foreign company you setup will be taxed in the UK.

 

[bandulu warrior]

If you reside in the UK, any foreign company you setup will be taxed in the UK.

I am happy to pay UK taxes. Its the regulation and licensing I am struggling with. With that being said I am more than happy to re locate if the conditions are more tax favorable.

 

[JohnnyDoe]

I am happy to pay UK taxes. Its the regulation and licensing I am struggling with. With that being said I am more than happy to re locate if the conditions are more tax favorable.

I don’t think that you can run a regulated business through a foreign company even if you pay taxes in the UK.

 

[Sols]

- Crypto Company formation in a Crypto friendly environment for the purpose of buying and selling cryptos peer to peer for fiat. I believe a license would be required, in a country that would allow me to legally deal with my clients in the UK.

That would be UK. Luckily, the FCA is quite easy to work with. Getting a license in UK is a lot easier than most parts of the world.

You can also get a crypto license somewhere else and take UK customers. That may be compliant with the laws of where your business is located and licensed, but (probably) not legal in UK. If you want to take UK customers, you need a UK license.

 

[bandulu warrior]

I don’t think that you can run a regulated business through a foreign company even if you pay taxes in the UK.

Can you elaborate on this please. I was under the impression that I could have a license and company in Europe that allows me to continue my crypto activities. I would pay the company tax in what ever jurisdiction it is operating but would be allowed to provide services to UK clients. I'm not sure how I would structure it, but I may have to be an employee of the off shore company to pay my self. The company would be paying corporation tax in whatever country its in. If I pay my self, it would be my personal income which is subject to UK tax to my best knowledge.

That would be UK. Luckily, the FCA is quite easy to work with. Getting a license in UK is a lot easier than most parts of the world.

You can also get a crypto license somewhere else and take UK customers. That may be compliant with the laws of where your business is located and licensed, but (probably) not legal in UK. If you want to take UK customers, you need a UK license.

Thanks for the response, currently the FCA are backlogged with applications and license approval takes at least a year. A lot of my broker associates have set up shop in Gibraltar, Estonia, Lithuania, Isle of man and so on and are continuing to provide services to UK clients. I guess this is something that needs to be discussed with a lawyer but there are many crypto companies that do this, to my best knowledge.

 

[Sols]

Thanks for the response, currently the FCA are backlogged with applications and license approval takes at least a year. A lot of my broker associates have set up shop in Gibraltar, Estonia, Lithuania, Isle of man and so on and are continuing to provide services to UK clients. I guess this is something that needs to be discussed with a lawyer but there are many crypto companies that do this, to my best knowledge.

There is compliant under UK law and compliant under for example Estonian law.

If the Estonian law permits taking UK customers, you can legally (under Estonian law) take UK customers. However, UK law states that anyone offering financial services in UK must be licensed there. So you still risk breaking UK law if you offer services in the UK as an Estonian company without a UK license.

There is a lot more nuance to it, though. For example, if you have no connection to the UK (i.e. you don't live there) and you're not egregiously marketing yourself to UK customers, you probably won't be a high priority.

 

[bandulu warrior]

There is compliant under UK law and compliant under for example Estonian law.

If the Estonian law permits taking UK customers, you can legally (under Estonian law) take UK customers. However, UK law states that anyone offering financial services in UK must be licensed there. So you still risk breaking UK law if you offer services in the UK as an Estonian company without a UK license.

There is a lot more nuance to it, though. For example, if you have no connection to the UK (i.e. you don't live there) and you're not egregiously marketing yourself to UK customers, you probably won't be a high priority.

Bloody hell, so legally speaking setting up an offshore company and being licensed there and providing financial services to clients in the UK is no different to providing services in the UK without a UK license?

There is compliant under UK law and compliant under for example Estonian law.

If the Estonian law permits taking UK customers, you can legally (under Estonian law) take UK customers. However, UK law states that anyone offering financial services in UK must be licensed there. So you still risk breaking UK law if you offer services in the UK as an Estonian company without a UK license.

There is a lot more nuance to it, though. For example, if you have no connection to the UK (i.e. you don't live there) and you're not egregiously marketing yourself to UK customers, you probably won't be a high priority.

This is from the UK FCA website

Is the activity carried on in the UK?​

Every case will need to be assessed on its own merits, with reference to the nature and business model that is being undertaken. When deciding whether we consider the business as being carried on in the UK, we will consider a variety of factors including:

• Where the business has a UK office or its head office in the UK this may indicate that the activity is being carried on in the UK (MLRs, Regulation 9). If the office is not a registered office or head office, we will need to consider the type of activity that is carried on by that office (offices) and whether we consider the presence of that UK office means that it is carrying on business in the UK. In addition, the presence of a UK ATM will be considered business carried on in the UK, and so the operator will require registration.
• Where the business has no UK office or other activity in the UK, beyond simply having a client in the UK, we are likely to consider that the business firm is not carrying on UK business. For example, if a cryptoasset exchange, registered in a jurisdiction other than the UK, and which has no offices or agents in the UK but nevertheless permits UK customers to open trading accounts and permits them to buy/sell/hold cryptoassets; we would not automatically consider that as business being carried on in the UK.

https://www.fca.org.uk/cryptoassets-aml-ctf-regime/register

 

[Sols]

Bloody hell, so legally speaking setting up an offshore company and being licensed there and providing financial services to clients in the UK is no different to providing services in the UK without a UK license?

Yes, maybe, not always.

This is from the UK FCA website

Is the activity carried on in the UK?​

Every case will need to be assessed on its own merits, with reference to the nature and business model that is being undertaken. When deciding whether we consider the business as being carried on in the UK, we will consider a variety of factors including:

• Where the business has a UK office or its head office in the UK this may indicate that the activity is being carried on in the UK (MLRs, Regulation 9). If the office is not a registered office or head office, we will need to consider the type of activity that is carried on by that office (offices) and whether we consider the presence of that UK office means that it is carrying on business in the UK. In addition, the presence of a UK ATM will be considered business carried on in the UK, and so the operator will require registration.
• Where the business has no UK office or other activity in the UK, beyond simply having a client in the UK, we are likely to consider that the business firm is not carrying on UK business. For example, if a cryptoasset exchange, registered in a jurisdiction other than the UK, and which has no offices or agents in the UK but nevertheless permits UK customers to open trading accounts and permits them to buy/sell/hold cryptoassets; we would not automatically consider that as business being carried on in the UK.

That's part of the nuance.

So if you remain resident in UK and approach UK customers through an Estonian company, is your physical presence in UK enough to be considered carrying on business in UK?

Paying UK tax might be a detriment to you, since FCA could perhaps point to that as you having a UK presence. On the other hand, if you don't pay UK tax but you are effectively controlling the company from UK, you are committing UK tax fraud.

This isn't an unsolvable situation. It's just difficult, and very important to get all the details right.

 

[bandulu warrior]

Yes, maybe, not always.


That's part of the nuance.

So if you remain resident in UK and approach UK customers through an Estonian company, is your physical presence in UK enough to be considered carrying on business in UK?

Paying UK tax might be a detriment to you, since FCA could perhaps point to that as you having a UK presence. On the other hand, if you don't pay UK tax but you are effectively controlling the company from UK, you are committing UK tax fraud.

This isn't an unsolvable situation. It's just difficult, and very important to get all the details right

This is very complicated. Currently I am a UK resident, based in the UK, paying UK tax. At this rate it might be easier and cheaper to just apply for a Licensee in the UK. I am more than happy to relocate my self and become a tax resident of another country if its tax favorable and hot lol

 

[JohnnyDoe]

This is very complicated. Currently I am a UK resident, based in the UK, paying UK tax. At this rate it might be easier and cheaper to just apply for a Licensee in the UK. I am more than happy to relocate my self and become a tax resident of another country if its tax favorable and hot lol

The Bahamas are an option. There is going to be an abundance of accommodation options in Albany as well as vacant office space

 

[bandulu warrior]

The Bahamas are an option. There is going to be an abundance of accommodation options in Albany as well as vacant office space

That's sounds absolutely lovely I will look into it

 

[CyprusLawyer101]

You can obtain a Crypto Asset Service Provider license in Cyprus and the majority of the issues mentioned above should be elminated. Since the company would be licensed and would have to meet specific requirements pertaining to offices, employees, compliance officers etc the question of substance and management and control arguments become irrelevant. Your only remaining issues is since you will be residing in the UK( if not moving out) you should be little careful not to be soliciting UK clients either personally or by promoting the company there. Unless your intention is to be working only or mostly with UK clients? In which case your licensing position should be evaluated.

 

[bandulu warrior]

You can obtain a Crypto Asset Service Provider license in Cyprus and the majority of the issues mentioned above should be elminated. Since the company would be licensed and would have to meet specific requirements pertaining to offices, employees, compliance officers etc the question of substance and management and control arguments become irrelevant. Your only remaining issues is since you will be residing in the UK( if not moving out) you should be little careful not to be soliciting UK clients either personally or by promoting the company there. Unless your intention is to be working only or mostly with UK clients? In which case your licensing position should be evaluated.

Very interesting points. Currently I am working with UK clients and one main client, who is involved with overseas trade I will double check where they are based. Ideally I want to offer my services internationally, mostly focused in Europe. I wouldn't be specifically targeting or advertising to the UK market but they would be part of my demographic and for the most part make up my client roster. I would not promote the company in the UK, I have built my client base through mostly word of mouth in the Crypto world and I would intend to keep it that way.

 

[CyprusLawyer101]

Very interesting points. Currently I am working with UK clients and one main client, who is involved with overseas trade I will double check where they are based. Ideally I want to offer my services internationally, mostly focused in Europe. I wouldn't be specifically targeting or advertising to the UK market but they would be part of my demographic and for the most part make up my client roster. I would not promote the company in the UK, I have built my client base through mostly word of mouth in the Crypto world and I would intend to keep it that way.

It looks workable, just a few bit a pieces you need to keep in check.

 

[FantomOffshore]

You can obtain a Crypto Asset Service Provider license in Cyprus and the majority of the issues mentioned above should be elminated. Since the company would be licensed and would have to meet specific requirements pertaining to offices, employees, compliance officers etc the question of substance and management and control arguments become irrelevant. Your only remaining issues is since you will be residing in the UK( if not moving out) you should be little careful not to be soliciting UK clients either personally or by promoting the company there. Unless your intention is to be working only or mostly with UK clients? In which case your licensing position should be evaluated.

Would this truly be worth it given the EU's digital asset plans over the foreseeable future?

 

[CyprusLawyer101]

Would this truly be worth it given the EU's digital asset plans over the foreseeable future?

I dont see what you mean. I am more of the position that EU

Would this truly be worth it given the EU's digital asset plans over the foreseeable future?

I dont see what you mean. The EU's future plan should be more on the promoting side of such licensing arrangements. I would like to hear more of what you have in mind.