Relocating with an UAE or Seychelles Offshore Company

[Babzi]

I am thinking about starting a UAE or Seychelles offshore company for buying/selling of virtual items. I rarely know names of individuals I deal with, and also deal anonymously with customers in crypto.
So basically, not being able to account this properly, except I can screenshot the trade of the items to the username linked and the transaction. Will this be enough?

To the question, I am a EU citizen. Where can I relocate to and be able to run this offshore company at the location, this is not possible in my current country due to CFC rules. I won't do any business with the resident country. No bank accounting there.
I do need low cost of living, and I am kind of sceptical moving all the way to UAE. Is it possible in EU still? Seychelles is an option but it is very expensive..
Cyprus? Malta? Spain? Does this work with their CFC rules for individuals with foreign companies?

What are your recommendations? UAE or Seychelles or any other offshore company structure for my business, and where to relocate.
Kind regards.

 

[Martin Everson]

If you can raise enough money for UAE living then move there. See below sample cost of livingin UAE

Image you would have won in the lottery!

Let's start dreaming.... Imagine you win a lot of money. Let's say 50 million €/$. You live in Germany or any country where lottery/gambling profits are not taxed and you are an EU citizen. What would you do to keep the burden of tax as low as possible? I have some options in my mind. If you...

www.offshorecorptalk.com

Just pick the cheapest and least bureaucratic offshore company to run your business. Keep in mind global minimum tax is coming at 15%. We have to see if they set a threshold from which the tax applies. i.e maybe businesses with under $1m revenue are exempt who knows .

What does the global minimum corporate tax mean for GCC countries?

The G7 nations’ recent agreement to go ahead with a global minimum corporate tax rate will have reverberations for low-tax GCC countries such as UAE and Bahrain.

www.cityscape-intelligence.com

 

[Babzi]

If you can raise enough money for UAE living then move there. See below sample cost of livingin UAE

Image you would have won in the lottery!

Let's start dreaming.... Imagine you win a lot of money. Let's say 50 million €/$. You live in Germany or any country where lottery/gambling profits are not taxed and you are an EU citizen. What would you do to keep the burden of tax as low as possible? I have some options in my mind. If you...

www.offshorecorptalk.com

Just pick the cheapest and least bureaucratic offshore company to run your business. Keep in mind global minimum tax is coming at 15%. We have to see if they set a threshold from which the tax applies. i.e maybe businesses with under $1m revenue are exempt who knows .

What does the global minimum corporate tax mean for GCC countries?

The G7 nations’ recent agreement to go ahead with a global minimum corporate tax rate will have reverberations for low-tax GCC countries such as UAE and Bahrain.

www.cityscape-intelligence.com

This sample cost of living would be abit to heavy to start my company.
Is it not possible to run from a country where I would only need to pay for an apartment for example, quality of living is of no concern to me. Just that I would need some basic infrastructure

 

[khinkali]

What is the objective of the company? If it's for asset protection then OK, but if it's for tax you might be better off moving somewhere suitable and having the company where you live.

Given that you will manage and work for it, the company will probably have a Permanent Establishment where you are living. Most jurisdictions that don't tax foreign earnings and don't have CFC, do tax you or the company based on where it's managed or where the work is done (not to mention VAT or sales tax where the customers are, but I doubt you care too much about that).

I do need low cost of living, and I am kind of sceptical moving all the way to UAE.

If your objective is a low cost of living and no taxes on crypto sales, then Georgia might work for you if you don't have a company. Companies pay 20% on crypto sales and while there's no CFC your offshore company would have a taxable PE after 30 days, but crypto sales as a private individual are not considered Georgian Source income according to Georgian Revenue Service Public Decision 201.

I don't know if the Georgian definition of crypto exactly matches the kinds of virtual items you're selling, but it might be worth looking into.

 

[Babzi]

What is the objective of the company? If it's for asset protection then OK, but if it's for tax you might be better off moving somewhere suitable and having the company where you live.

Given that you will manage and work for it, the company will probably have a Permanent Establishment where you are living. Most jurisdictions that don't tax foreign earnings and don't have CFC, do tax you or the company based on where it's managed or where the work is done (not to mention VAT or sales tax where the customers are, but I doubt you care too much about that).



If your objective is a low cost of living and no taxes on crypto sales, then Georgia might work for you if you don't have a company. Companies pay 20% on crypto sales and while there's no CFC your offshore company would have a taxable PE after 30 days, but crypto sales as a private individual are not considered Georgian Source income according to Georgian Revenue Service Public Decision 201.

I don't know if the Georgian definition of crypto exactly matches the kinds of virtual items you're selling, but it might be worth looking into.

I can't do this business in EU due to VAT applied to digital services AKA virtual items, and I also buy and sell using bank transfer.
What do you think about Seychelles and moving somewhere else that is cheap.
It's not for asset protection or tax reasons. I just need to be able to do this business without a bunch of paperwork and reciepts..

 

[Martin Everson]

I can't do this business in EU due to VAT applied to digital services AKA virtual items, and I also buy and sell using bank transfer.
What do you think about Seychelles and moving somewhere else that is cheap.

Ok so your customers are not in EU? Otherwise if they are even your non-EU company has to register for EU VAT in one EU country and make use of MOSS system when providing digital services to them.

 

[Babzi]

Ok so your customers are not in EU? Otherwise if they are even your non-EU company has to register for EU VAT in one EU country and make use of MOSS system when providing digital services to them.

I think there really is not any clear cut rules around this, the skins are digital goods and should not really be taxed with VAT, it does not make sense, it is just my stupid country that decided to make that rule.
Maybe I just trade these skins for crypto, then cash out? Maybe this would work in Malta were crypto transactions are VAT exempt?
I have researched so hard on this past few weeks, but I really have not found any suitable solution and I also know that very few people does it legit, everyone just does tax evasion pretty much in this virtual item trade.

 

[Martin Everson]

It is really is not worth avoiding VAT. People go to jail for VAT evasion or fraud as tax man likes to call it...lol.

Maybe I just trade these skins for crypto, then cash out? Maybe this would work in Malta were crypto transactions are VAT exempt?

Even if you do this and bypass banks and any sort of VAT or reporting obligations at some point you may run into problems I think if you ever go into fiat. The due diligence is only ever gonna get more stringent sadly and will soon take on a customer tax compliant angle.

 

[Babzi]

Well then I would have to stop this business I guess.
I don't see why digital ingame items can't be seen as vat exempt?
They should be treated like crypto in Malta, vat exempt
I buy and sell to private individuals only, so I can't get back any VAT..

 

[Babzi]

I am willing to pay for anyoen who is willing to help me this get setup properly. I know it is possible somehow, I know a german guy who is doing it with a VAT registred business. But they are keeping it a secret.

 

[maybelater33]

What is the objective of the company? If it's for asset protection then OK, but if it's for tax you might be better off moving somewhere suitable and having the company where you live.

Given that you will manage and work for it, the company will probably have a Permanent Establishment where you are living. Most jurisdictions that don't tax foreign earnings and don't have CFC, do tax you or the company based on where it's managed or where the work is done (not to mention VAT or sales tax where the customers are, but I doubt you care too much about that).



If your objective is a low cost of living and no taxes on crypto sales, then Georgia might work for you if you don't have a company. Companies pay 20% on crypto sales and while there's no CFC your offshore company would have a taxable PE after 30 days, but crypto sales as a private individual are not considered Georgian Source income according to Georgian Revenue Service Public Decision 201.

I don't know if the Georgian definition of crypto exactly matches the kinds of virtual items you're selling, but it might be worth looking into.

Does Georgia also exempt personal taxation on crypto assets when thousands of sales are done per day? E.g. as part of algorithmic trading? I could not find this mentioned in Public Decision 201.

 

[khinkali]

Does Georgia also exempt personal taxation on crypto assets when thousands of sales are done per day? E.g. as part of algorithmic trading? I could not find this mentioned in Public Decision 201.

I've had informal chats with tax professionals. The line I've been getting is that the Georgian Revenue Service consider cryptocurrency to be outside the scope of Georgian tax (for natural persons, not companies) and don't want anything to do with it, other than issues like using crypto to buy and sell good or services in which case those goods and services would be taxed as if purchased using any other currency.

But this is quite new and nobody wants to commit 100%. One concern that I and others have, is that this year the RS re-interpreted the application of Virtual Zone rules and decided to tax some VZ companies retrospectively. I don't think it's too much of a reach to re-interpret the wording of the Georgian tax code and PD 201 in some kind of 'badge of trade' approach that you and I are probably concerned about.

I'm at the point now where I need to clarify this so my next move will be to get a tax lawyer or tax auditor who wants to put the questions into the right wording and apply for an Advance Tax Ruling. If given, the ATR is legally binding so it looks to me like the right approach.

 

[mad1max]

You only have to pay VAT if you have enough sales. So create multiple companies sell in different countries and stay below, what you are allowed before you have to get vat registered.

 

[zerosugar]

Depending on your exact situation you don't even need a company. You don't even know your clients names hence i guess they don't require an invoice and your clients pay you in crypto.
Basically you save costs for the company and one trace less how you could get caught committing tax evasion. In the end it is tax evasion using an offshore shell or not.
You will have to deal with money laundering in both cases too.