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Question Spaniard - Crypto - Exit strategy - 7 figures (Part 2)

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Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Have you considered Georgia as a possibility? I have read here some threads and some people has been able to cash out.
I have bank accounts in Georgia since 2018 - never heard successful story about Crypto cashout with significant amount of money.

See my full anser here:
 

Andrei636

New member
In UAE you can like already mentioned use workarounds that doesn't face many questions as mid 7 figure is considered average and due to 0% tax and no accounting
Hey there is an article on cointelegraph today about UAE written by a CPA : The United Arab Emirates’ green digitization vision
He mention there about VAT : "On the other hand, utility tokens and non-fiat cryptocurrencies are considered commodities and are not subject to market regulations. Law No. 20 of 2018 on Anti-Money Laundering defines laundered funds to be assets in whatever form, including digital currencies. Article 3 of Law No. 8 of 2017 on value-added tax imposes a 5% tax on imported and exported commodities. This tax may apply to utility tokens and non-fiat cryptocurrencies, as the FSRA considers them to be commodities."

does it mean if you trade some utility erc20 tokens on a platform online (outside of UAE, but same question for inside) or on the blockchain directly, as a resident of UAE you could end up having to pay a 5 % vat on your whole volume (which can be much more than profit if you are scalping), or VAT would not apply in any case to a trader or a simple seller/buyer but only to some companies launching icos/token offering, or there is no risk currently or having vat applied on crypto transactions ?
 

petal355

New member
There are several workarounds.

You don't have to worry about the invoice itself it simply have to fit the business license and the counterparties you mentioned during the account opening.
Hey Fred I had a question,

When the bank starts to ask to provide entire documentation for invoices, as it happened to a contact 2 times in last 3 years for a very legit consulting business, he had to provide the same file for review the client would get. Thus they would spot your business is crypto related and freeze the account instantly or forever until you clear your case, you might also not be able to open an other account for this company in uae right ?

I wanna ask, if the company is mostly here to provide the residence visa and a salary to secure the tax residency (including obtaining a tax residence certificate), isn't there a risk that if the company get "busted" and blocked by uae banks one who would stay in UAE would fail to get the tax residence requirement despite respecting the 183 rules ? (with the consequence we imagine)
But maybe even then one could bank offshore and send the salary from offshore which would still secure the residence at an individual point of view, Am I right ?

If your target is not to find a quick way to cashout but more to secure a 100% tax residence in UAE can your method guarantee it ? Or is there a better way to secure it when your only business is crypto trading, maybe if you hire someone lets say an IT specialist you could make sure the substance in your company would secure it and your own tax residence in the UAE?
As the cashout could be made slowly at an individual point of view without risking too much with the FZ which is here mostly to secure your residence at the personnal level.
 

CaptK

Nominee Company Bank Account Real Estate Passport
Mentor Group Gold
Hey Fred I had a question,

When the bank starts to ask to provide entire documentation for invoices, as it happened to a contact 2 times in last 3 years for a very legit consulting business, he had to provide the same file for review the client would get. Thus they would spot your business is crypto related and freeze the account instantly or forever until you clear your case, you might also not be able to open an other account for this company in uae right ?

No you can still open another account with another bank.
I wanna ask, if the company is mostly here to provide the residence visa and a salary to secure the tax residency (including obtaining a tax residence certificate), isn't there a risk that if the company get "busted" and blocked by uae banks one who would stay in UAE would fail to get the tax residence requirement despite respecting the 183 rules ? (with the consequence we imagine)
No residency is based on the rule of 180, you don't even need to do any business.
But maybe even then one could bank offshore and send the salary from offshore which would still secure the residence at an individual point of view, Am I right ?

Correct
If your target is not to find a quick way to cashout but more to secure a 100% tax residence in UAE can your method guarantee it ? Or is there a better way to secure it when your only business is crypto trading, maybe if you hire someone lets say an IT specialist you could make sure the substance in your company would secure it and your own tax residence in the UAE?
If you use a website like Etoro or even Kraken as they are established in the UAE it will be ok.
As the cashout could be made slowly at an individual point of view without risking too much with the FZ which is here mostly to secure your residence at the personnal level.
Funneling it through the FZ would be a better solution as it's deemed as business receiving payment is better. To put your mind at ease you can also set up an offshore account like an LLP in the UK as a pass through.
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
@CaptK named it - nothing more to add.

Send me PM for starting your journey in the UAE.
 

CyprusLaw

Mentor Group Gold
It's not regulated and the advisors have mentioned that 0%
Please allow me to clarify something here - No licensing is required, but since February 2021 it is regulated for AML purposes, crypto asset service providers will have to register in a registry that will be held by the regulator and have to pass certain requirements. This could potentially change the wat Cyprus banks treat such crypto asset service providers, however, even if they don't there are a number of options with EMIs both in Cyprus and abroad, as well as, other foreign banks. With respect to the tax question I note that when it comes to the taxation of cryptocurrencies these will fall under the same tax principles as with any other business activities and a tax rate of 12.5% will apply.

This in fact the case as no legal definition was attributed to cryptocurrencies in Cyprus Tax legislation. Thus no clarification exists whether cryptocurrencies are securities (“titles”), currency or a digital asset. The accounting practice (IFRS) considers cryptocurrencies as either inventory or intangible assets, and as the the tax practice usually follows the accounting practice, inventories/intangible assets are part of the normal business operations which are taxed at 12.5%.
 

petal355

New member
No residency is based on the rule of 180, you don't even need to do any business.


It says that residency certificate is delivered when six conditions are met, including providing these two :
  • Six months worth of bank statements in the UAE so they need to see an income coming to your uae account probably from a UAE business
  • Valid proof of income in the UAE (i.e., employment agreement, salary certificate, etc.)
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
It says that residency certificate is delivered when six conditions are met, including providing these two :
  • Six months worth of bank statements in the UAE so they need to see an income coming to your uae account probably from a UAE business
  • Valid proof of income in the UAE (i.e., employment agreement, salary certificate, etc.)
@CaptK mention the experience from practice. In practice you even get the tax residence certificate with being less then 6 months to the UAE.
 

CaptK

Nominee Company Bank Account Real Estate Passport
Mentor Group Gold
It says that residency certificate is delivered when six conditions are met, including providing these two :
  • Six months worth of bank statements in the UAE so they need to see an income coming to your uae account probably from a UAE business
  • Valid proof of income in the UAE (i.e., employment agreement, salary certificate, etc.)
Its all how you position it and it can be done very quickly depending on WHO does it for you. In some cases if you work for a well known Real Estate agency/developer you can get your tax certificate almost immediately as the tax rules in certain countries require you to provide proof before they deregister you for tax. Without it you can be taxed by your previous country up and until you provide it.
 

FreeBit

New member
@CaptK mention the experience from practice. In practice you even get the tax residence certificate with being less then 6 months to the UAE.

Its all how you position it and it can be done very quickly depending on WHO does it for you. In some cases if you work for a well known Real Estate agency/developer you can get your tax certificate almost immediately as the tax rules in certain countries require you to provide proof before they deregister you for tax. Without it you can be taxed by your previous country up and until you provide it.
Do you work together? I would like to have a call with you please
 

CaptK

Nominee Company Bank Account Real Estate Passport
Mentor Group Gold
Myself and Fred are seperate and independent. We just have a very good knowledge of the UAE.

Feel free to contact either one of us.
 

petal355

New member
Its all how you position it and it can be done very quickly depending on WHO does it for you. In some cases if you work for a well known Real Estate agency/developer you can get your tax certificate almost immediately as the tax rules in certain countries require you to provide proof before they deregister you for tax. Without it you can be taxed by your previous country up and until you provide it.
But if you do not get in fact uae sourced income, as a salary (for example if your FZ is dormant in the setup) but respect the 187days presence in uae, along with the other point (apartment reantl contract), are you guaranteed to get that tax residence certificate ?
 

CaptK

Nominee Company Bank Account Real Estate Passport
Mentor Group Gold
So long as you satisfy the time period you are automatically entitled to it.
But if you do not get in fact uae sourced income, as a salary (for example if your FZ is dormant in the setup) but respect the 187days presence in uae, along with the other point (apartment reantl contract), are you guaranteed to get that tax residence certificate ?
 

all in

New member
@FreeBit did you end up with the Dubai setup?
@Fred i’m also interested in your services and was wondering how many days it usually takes to be physically located in Dubai in order to set up everything? (1-2 weeks?)
 

all in

New member
Yeah, regarding the company formation and getting the company+personal bank accounts, there are no issues as everything is straight forward.
The actual issues are regarding the “methods” used to obfuscate the origin of the funds that will be received into those bank accounts.
Why should anyone obfuscate since we’re talking about legit coins bought when one btc was $500-$1000?
And that’s a big red flag since the people offering the setup are not willing to provide more details.
I mean, the setup involving that the payouts to be considered merchant payments by the local UAE banks is considered money laundering since those invoices will be fake and have nothing to do with a real business.
And not to mention that the risk is very high if you end up with some money laundering charges. Why risk that instead of paying taxes in your local country?

here’s a news article regarding money laundering charges in UAE (of couse, it says drugs and pakistan....but still)

PS: I think that people offering “solutions” on top of simple company formation services should provide more details because some people might end up regretting when something will go wrong.
 
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