Holding + Cyprius subsidiary + Crypto trading + Cyprius Tax residency 60days = 0 TAX ?

[toums]

Hi everybody,

Let's say you are a EU crypto holder/trader since few years, as individual. You plan to sell a part of your cryptocurrencies this year in 2018 (let's say 1 000 000+). You saw that there is lot a grey zone in lot of countries (no regulation, no position if it will be taxed as income tax or capital gain etc...). In the same time you don't want to live at least 6 months per year in the friendly country, and you travel very often each year.

The plan is :

1a/ Opening a non resident holding company in UK (because it is very simple and very small fees) or in Gilbratar or Isle of Man (0% taxation of CIT). Also this 3 countries have not WHT.

1b/ Opening a bank account for the holding (Maybe in Poland as it seem not difficult to the MKB or in Hungary also, or a EMI bank account.

2a/ Set up the Cyprius subsidiary because no CFC rules and no taxation on all the dividends and interest with the Non dom statut resident.

2b/ Opening the bank account for the Cyprius company.

3/ Bring the cryptocurrencies to the Holding company and sell the crypto. No corporate tax apply.

4/ Send the funds from the holding to the Cyprius company and distribution of the dividends, as individual. No taxation in Cyprius for dividends + interest with the Non dom statut resident.

Conditions for this plan :

- To be in Cyprius for at least 60days in 2018.
- Don't close the Cyprius company
- Rent a flat in Cyprius for the whole year
- Don't live in a specific country for 183days / year

What do you think about that ? It seem quite easy, maybe I forgot someting...

 

[toums]

No one ?

 

[negon]

travel between the UK and Cyprus every year.. or simply live in the UK as an expat / foreigner not UK citizens and don't do business in the UK, so all your pfoits are tax free for the first 7 years.

Consult an UK tax expert to get the above confirmed.

 

[toums]

It is more complicated. I already know the "non dom resident" in UK and Malta (even the sum taxation in Italy + Switzerland)

But there is 2 problems in that case :

1/ I don't want to live in UK, in Cyprus neither (ok for the minimum stay of 60 days but i don't want to spend 4/5 months during the year in Cyprus).

2/ It is still a grey zone about cryptocurrencies in most countries. Well ok, all the money I made before receive the non dom statut it will be tax exempt, but after probably not. If it is considered like a trading activity, I will have to pay tax in UK (or even in Malta) because It will be considered like a onshore activity (and subject to the tax) if I live in Uk or Malta.

That's why I asked for a tax strategy with company which hold the cryptocurrencies.

I thought about Cyprus, because the possibility to have legally the tax residence by living only 60 days per year (instead of 183 days), would be a good opportunity (while meeting the conditions above).

The other plan I thought is to set up exactly the same process : Opening a UK non resident company (is it sure there is no corporate tax if you don"t make business with UK and don't live in UK?) or in Isle of Man. Then, take the NHR (non habitual resident) regime in Portugal and have the tax resident in Portugal.

Foreign dividends are tax exempt during 10 years with the NHR (non habitual resident) statut, but there is some CFC rules with the Portugal, That's why I thought about the first plan. It is not so simple.

 

[diablo]

That's why I asked for a tax strategy with company which hold the cryptocurrencies.

All crypto wallets, or many like exodus are anonymous, so it's not a problem to form a Belize Company and hold the crypto there.. how you Exchange it later on is not something anyone will look at. You can use EMI providers to cover your business activity towards real banks.

 

[toums]

All crypto wallets, or many like exodus are anonymous, so it's not a problem to form a Belize Company and hold the crypto there.. how you Exchange it later on is not something anyone will look at. You can use EMI providers to cover your business activity towards real banks.

If I planned to move the cryptocurrencies in a company it is only compared to the sale of the cryptocurrencies. Otherwise I would simply sell as individual.

Why do you think EMI is the best way for the bank account ? Mostly are in EU countries (revolut, mistertango etc..) So there is no real anonymity.

Moreover, in your example, there is still the problem to use the money from the EMI offshore company, as individual. I really don't see where is the anonymity ?!

 

[JohnK]

You need a bank that is pleased with the trading of crypto currencies i.e. MisterTango and Revolut are such banks, that's why it makes more sense to open an account with such EMI's rather than a real bank which don't like crypto business! Time will help you, as the time passes it will be easier and easier to find great banking solutions for crypto business. However, we are in early 2018 so it will take some more time before we see the first real banks accept cyrpto currencies.

 

[toums]

Just made a quick quote of the fixed costs in Cyprus (with non dom 60 days regime).

Incorporation of the Cyprus company + application for bank account/VAT/social security/tax number + application non dom regime = 3 000 euros

Basic annual accounting fee = 1 500 euros

Minimum social tax contribution = 3 800euros / year ( with 19 500 euros of salary for 0% income tax. Employee contribution 7.8% Employers contribution 11.5% , around 320€/ month if social tax contribution).

So, around 8.3K€ of fixed costs for the first year ?

In additionnal, 1.5K€ for a Belize company package + rent a flat for the WHOLE year in Cyprus

Something wrong or missing ?

 

[JohnLocke]

Sounds like you did a great job in researching your needs! The fees listed for both the Cyprus and Belize entity seems to be correct. Do you plan to live in Cyprus?

 

[toums]

Sounds like you did a great job in researching your needs! The fees listed for both the Cyprus and Belize entity seems to be correct. Do you plan to live in Cyprus?

Currently I

 

[toums]

Sounds like you did a great job in researching your needs! The fees listed for both the Cyprus and Belize entity seems to be correct. Do you plan to live in Cyprus?

Currently I am in Asia. I will come for a week in Cyprus at the end of this month to see if Cyprus can be suitable for me (already been only one time 2years ago for 3/4days, holidays).


In my mind, I don’t plan to live the whole year in Cyprus for the moment. I am interested by the 60 days non dom regime, so probably 2/3 months maximum.


I can live in 2/3 other countries during the year, so I don’t need to live in a particular countries 6 months per year, that’s why I think that the 60 days non dom can be OK in my case.

 

[toums]

Just get information about the required document for the Belize company incorporation (IBC), not for the bank account opening.

I thought it was just required a standard passport copy and standard utility bill. Otherwise, here is the answer :

"1. Copy of passport or ID (certified in English).

The certification must be made by a notary public, a licensed lawyer, a chartered accountant, a government officer, a consular or embassy
officer, or a bank manager from a reputable bank. Certification must contain text that "this is a true copy of the original". Copy must be in color or attached color copy to certified document in case if it is b/w.

Please indicate name, surname, position, date of certification and direct contact details of the person who will make this certification.


2. Proof of Address:

This can be a utility bill (except mobile phone bill), bank or credit card statement, mortgage statement, tax bill, correspondence from a government agency, home security services bill, home Internet or cable services bill, rental contract, or a bankers reference letter, if it confirms the address of the customer. A sample Bank reference letter for your use has been included in the PDF, in case you would like to ask your bank to provide such a document.The proof of address document must indicate the full name of the individual together with his residential address. The proof of address document must be original (color logo) and not older than 3 months. If the address and name of the recipient, or other important contents of the document are not in the English, a certified translation is required."

 

[mrbiggs]

Wouldn't it be easier to have someone in cyprus do all this for you ?

 

[toums]

Wouldn't it be easier to have someone in cyprus do all this for you ?

I was talking about the Belize company not the Cyprus one.

 

[JohnLocke]

It's actually not complicated to setup a company in Cyprus. As long as you can provide a notarized or certified passport and utility bill you are already half the way.

 

[diablo]

Why do you think EMI is the best way for the bank account ? Mostly are in EU countries (revolut, mistertango etc..) So there is no real anonymity.

because I can do them anonymous if I want and I combinate them with real setups. That's why they work the best for me.

Moreover, in your example, there is still the problem to use the money from the EMI offshore company, as individual. I really don't see where is the anonymity ?!

Believe me I don't publish my secrets on a public forum just to see it saturated within a day or two

 

[diablo]

Just get information about the required document for the Belize company incorporation (IBC), not for the bank account opening.

I thought it was just required a standard passport copy and standard utility bill. Otherwise, here is the answer :

"1. Copy of passport or ID (certified in English).

The certification must be made by a notary public, a licensed lawyer, a chartered accountant, a government officer, a consular or embassy
officer, or a bank manager from a reputable bank. Certification must contain text that "this is a true copy of the original". Copy must be in color or attached color copy to certified document in case if it is b/w.

Please indicate name, surname, position, date of certification and direct contact details of the person who will make this certification.


2. Proof of Address:

This can be a utility bill (except mobile phone bill), bank or credit card statement, mortgage statement, tax bill, correspondence from a government agency, home security services bill, home Internet or cable services bill, rental contract, or a bankers reference letter, if it confirms the address of the customer. A sample Bank reference letter for your use has been included in the PDF, in case you would like to ask your bank to provide such a document.The proof of address document must indicate the full name of the individual together with his residential address. The proof of address document must be original (color logo) and not older than 3 months. If the address and name of the recipient, or other important contents of the document are not in the English, a certified translation is required."

pretty much standard and if you know what you are doing and not need to be spoon feed you also know how to go around it