Register offshore company for crypto trading - Belize?

[cryptovkng]

Hi guys

I want to register an offshore company which I will use purely for cryptocurrency trading. The main reason is to avoid paying corporate tax of the profits I make from the trading activity, but I do want to report profits I cash out as income to the country where I'm tax resident.

I have looked at Belize as a potential company location since they have 0% tax and don't ask for much reporting etc. Have anyone here registered an offshore company for their trading activity, and especially with crypto? Anything I need to consider carefully before doing this?

I do believe I don't need to register a bank account with the company if I can transfer the ownership of crypto funds directly from myself to the company, and when I cash out profits, which will be reported as income, I can also do this directly through a fiat gateway. Would this be as easy as I think?

Thanks!

 

[James Turner]

Hi, This should be possible if you have the fiat gateway and particularly if you do not need a bank account. You will however find that Belize have changed their tax legislation very recently and a tax liability (albeit a small one) may now be applicable. Whether you can withdraw funds and pay tax on a remittance basis as you suggest will depend on the tax rules in your country of residence, which was not mentioned.

 

[cryptovkng]

Hi, This should be possible if you have the fiat gateway and particularly if you do not need a bank account. You will however find that Belize have changed their tax legislation very recently and a tax liability (albeit a small one) may now be applicable. Whether you can withdraw funds and pay tax on a remittance basis as you suggest will depend on the tax rules in your country of residence, which was not mentioned.

Do you know more about how they changed their tax legislation? From what I could read there are no changes to tax legislation for corporations operating outside Belize, only if they are conducting business inside Belize.

More detailed explanation of my scenario and what I plan to do:
- Register a corporation in Belize with myself as the sole shareholder (I guess it's best to use a company that specializes in this, any of the companies ranking on 1st page Google perhaps?)
- Let's say I want to start trading with 1 BTC: I make a loan of 1 BTC from my personal assets to the company by writing and signing a loan contract, and transfer 1 BTC to a separate wallet "owned" by the company
- Register account on any exchange I want to use and trade with funds originating from the 1 BTC
- At a later time when 1 BTC is turned into 2 BTC, I can pay back the loan of 1 BTC to myself and continue trading with 1 BTC which is now an asset of the company.
- I can pay myself salary in BTC whenever I want by just transferring some funds to my personal BTC wallet and declare this as income for tax purposes.
- Alternatively I can pay out dividends by also transferring funds to my personal wallet

For all the actions above I actually don't need a bank account since everything is received / sent as BTC directly (or any other crypto). However, if I want to pay for travels, flights, conferences, computer etc that is related to the business activity I would need a bank account set up with the company I believe, in addition to a credit/debit card (VISA or Mastercard) to use for these payments.

Have anyone done something similar to this? It sounds very simple and straight forward on paper, and also 100% legit since I will report and declare all profits I pay out to myself, which I will in turn pay income tax on.

 

[James Turner]

There are a number of Belize changes which are probably too detailed to go into here, but I am happy to discuss with you if you wish. Your scenario seems very straightforward and I can see no issue with it, assuming you can obtain a wallet for the Belize Company. Banking for a Belize Company is not an issue and as you state will allow you to transact in more normal ways.

 

[blockchain4ever]

You need to check your local CFC rules. Owning 100% of a Belize company could lead to it being taxed as if it was resident in your home country.

 

[cryptovkng]

You need to check your local CFC rules. Owning 100% of a Belize company could lead to it being taxed as if it was resident in your home country.

Very good advice, I found out about this myself just before I saw your reply. I have been looking to become a tax resident in Slovenia, but they have a proper CFC law in place so that might be a showstopper. I will need to do some research and will update this thread later. I'm sure there are many people on this forum investing and trading crypto that want to find out how they can optimize their tax situation.

 

[anticfc]

You can always get around CFC rules by owning a minority stake in the company. How minor depends on the jurisdiction. You just have to manage the arising trust issues.

 

[James Turner]

Agree with @anticfc in that it is possible to create a structure in which you are a minority shareholder and as such avoid CFC rules. It would require a more detailed discussion on the matter to see if this is possible in your specific case.

 

[cryptovkng]

Agree with @anticfc in that it is possible to create a structure in which you are a minority shareholder and as such avoid CFC rules. It would require a more detailed discussion on the matter to see if this is possible in your specific case.

That's interesting. Can you explain more how this could be done? What would the structure look like as an example? Let's assume that I must own less than 50% to avoid CFC rules.

 

[James Turner]

It would require detailed discussion with you @cryptovkng

 

[bastard]

crypto is banned in most offshore countries. No one is going to look for it as long as you only have a company, say in Belize, but if you open a bank account the trouble will start. You need to find a bank or EMI that accept crypto like revolut, mister tango, kraken and so on, then find a nice place for your company which is accepted by the banks and EMI's.

I found something nice, new to me method, which I soon will post about in the mentor group.

 

[Steph]

crypto is banned in most offshore countries. No one is going to look for it as long as you only have a company, say in Belize, but if you open a bank account the trouble will start. You need to find a bank or EMI that accept crypto like revolut, mister tango, kraken and so on, then find a nice place for your company which is accepted by the banks and EMI's.

I found something nice, new to me method, which I soon will post about in the mentor group.

Hi ********,
is your method still working and posted in mentor group ?

 

[bastard]

Hello @Steph - yes it is still working like a clockwork no issues rised so far. You can read about it in the mentor group, otherwise I will be happy to let you know details inside there.

 

[gmbh]

Hello @Steph - yes it is still working like a clockwork no issues rised so far. You can read about it in the mentor group, otherwise I will be happy to let you know details inside there.

Would appreciate it if you would post the details here.

 

[pesto]

Would appreciate it if you would post the details here.

there is a reason for why we have the mentor group gold - people get banned if they post stuff from mentor to the public forums so don't ask doing this again it's not fair