Setup for Crypto and Stock trading

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PhantomOf ThePits

Silver Member
It won't be for crypto trading. The company itself will be an actual crypto exchange (similar to Binance and FTX) with advanced trading platforms. We have a team currently building it and it's due to launch soon. Would the BVI co with US-based silvergate/signature method work in this case?
Running an exchange is a completely different business model -- my posts were all about managing/trading prop money.

To run a crypto exchange, it will be important to work with people qualified enough to guide you to make it bullet proof.
Otherwise you will run into deep trouble later on regarding things like AML and KYC and such.

And for that kind of business US would be the last place where you should do that imho.
BVI it would depend which kind of products you offer -- if its token against token you MAY not fall under SIBA regulation.
If however cash leg or stable coin pairs are involved, this will be different.

To make an exchange platform nowadays from the technical standpoint is 'easy' with the right coders.
To make it bullet proof legally, is a very different issue.

Best advice is to speak with proper lawyers who have experience in that sector and dont save on that as otherwise you will run into potential legal trouble. Only my two cents...
 

beeyouessness

New member
The
Running an exchange is a completely different business model -- my posts were all about managing/trading prop money.

To run a crypto exchange, it will be important to work with people qualified enough to guide you to make it bullet proof.
Otherwise you will run into deep trouble later on regarding things like AML and KYC and such.

And for that kind of business US would be the last place where you should do that imho.
BVI it would depend which kind of products you offer -- if its token against token you MAY not fall under SIBA regulation.
If however cash leg or stable coin pairs are involved, this will be different.

To make an exchange platform nowadays from the technical standpoint is 'easy' with the right coders.
To make it bullet proof legally, is a very different issue.

Best advice is to speak with proper lawyers who have experience in that sector and dont save on that as otherwise you will run into potential legal trouble. Only my two cents...
Thanks for your message but my question was about bank accounts. The exchange has already been built and is live and running. I have several interested investors that are willing to buy equity in the company but I cant accept their funds as I've been trying to open a bank account for the past 3 months and all banks say no. I incorporated it in Delaware... you would think this was a mistake but if it wasn't for this, I would not have met the investors and I would not have met several employees that now work for the company, not to mention all the free credits/perks I receive for being a US start-up company.

The only advice I need Is how to open a bank account to start accepting investor funds. That's why I asked you about the BVI to Signature method or any other method I can do to ensure opening a bank account is an easy process. BVI or Caymen or any other jurisdiction where I won't have trouble opening a bank account, what would your recommendation be?
 

Dom pedro

New member
The

Thanks for your message but my question was about bank accounts. The exchange has already been built and is live and running. I have several interested investors that are willing to buy equity in the company but I cant accept their funds as I've been trying to open a bank account for the past 3 months and all banks say no. I incorporated it in Delaware... you would think this was a mistake but if it wasn't for this, I would not have met the investors and I would not have met several employees that now work for the company, not to mention all the free credits/perks I receive for being a US start-up company.

The only advice I need Is how to open a bank account to start accepting investor funds. That's why I asked you about the BVI to Signature method or any other method I can do to ensure opening a bank account is an easy process. BVI or Caymen or any other jurisdiction where I won't have trouble opening a bank account, what would your recommendation be?

Do you know Bankera ? It is a little pricey, but they have a plan specifically for crypto exchanges:

I also found a list of banks that may be helpful for your case:

If you can't open a bank account for your US company you will probably need to go through the subsidiary route.

By the way, this is off-topic, but are you currently looking for developers? I currently work as a dev in a electronic trading platform for a investment bank. I have some crypto knowledge and I am planning to make a transition to this area.
 

beeyouessness

New member
Do you know Bankera ? It is a little pricey, but they have a plan specifically for crypto exchanges:

I also found a list of banks that may be helpful for your case:

If you can't open a bank account for your US company you will probably need to go through the subsidiary route.

By the way, this is off-topic, but are you currently looking for developers? I currently work as a dev in a electronic trading platform for a investment bank. I have some crypto knowledge and I am planning to make a transition to this area.
Interesting. is there a way I can contact you?
 

peerpep

New member
Most of the times these setups are seen as too simplistic for reality.

Lets exclude Crypto for simplicity and focus on trading:

If that setup would work:
1. get a US LLC
2. get an trading account with Interactive Brokers
3. get the IB debit card
4. fund the IB account, trade

Potential profits you would draw from ATMs and or pay stuff with your debit card.


If that would work, not a single stock trader in the EU (or outside US) would pay taxes on trading the stock market.
And therefor it does not work.
At least not if the tax authorities from the country you are living in have a look at you.

For Germany for example just opening a foreign company is not enough.
If you run the daily business for the foreign company from Germany, then that is not valid and the business result will be fully taxed in Germany.

You would have to prove that the business decisions are taken in the US in our case.
You have to prove that by flight tickets, protocols and so on.
As a trader every major decision (buying/selling) would have to be made in the US then.
 
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Dom pedro

New member
Interesting. is there a way I can contact you?
Please check my profile :)


Most of the times these setups are seen as too simplistic for reality.

Lets exclude Crypto for simplicity and focus on trading:

If that setup would work:
1. get a US LLC
2. get an trading account with Interactive Brokers
3. get the IB debit card
4. fund the IB account, trade

Potential profits you would draw from ATMs and or pay stuff with your debit card.


If that would work, not a single stock trader in the EU (or outside US) would pay taxes on trading the stock market.
And therefor it does not work.
At least not if the tax authorities from the country you are living in have a look at you.

For Germany for example just opening a foreign company is not enough.
If you run the daily business for the foreign company from Germany, then that is not valid and the business result will be fully taxed in Germany.

You would have to prove that the business decisions are taken in the US in our case.
You have to prove that by flight tickets, protocols and so on.
As a trader every major decision (buying/selling) would have to be made in the US then.
You only forgot the bank account to be able to fund your IB account (you must fund your account using a bank in the name of the company). But yeah, it is a simple setup. The taxation will depend on the laws of the country you reside. As I said in a past post, my country (Brazil) is trying to change its tax code to directly tax the annual profits of offshore companies owned by residents. But currently you will only pay tax if you pay yourself dividends. So yeah, it depends a lot on where you are situated. Sometimes the best strategy is to pay yourself as an director/employee of that company if your country has a high 0% income tax bracket floor. In my case, the new law would apply only for tax havens or 0% tax setups (such as US LLC). As solution would be to use more a more complex setup or a simple setup in a low tax jurisdiction (instead of zero tax). Estonia seems an interesting place as it is crypto friendly, has a high reputation, easy access to banks and other services, and you don't pay tax on profits as long as you reinvest that. But I am still researching alternatives.
 

Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
Entrepreneur
Yes - since last year they don't like Belize, Seychelles etc. comapnies anymore if they are obviously shell companies in combination with some Wise banking or other EMI.


After this news a lot of user here reported that there Belize/Seychelles/BVI account got shut down.
 

morfixx

New member
Hey folks!

I'm in the exact situation as Dom Pedro, I'm also from Brazil, and looking to incorporate offshore to trade cryptocurrencies and open an IBKC account.

I've described my business to different incorporation companies and asked them what jurisdiction they think would be the best fit for my case. Below, I summarize what I got so far:

BBCIncorp: SVG*. Because SVG doesn't regulate crypto and I wouldn't need a license.
OffshoreCompanyCorp: SVG. Because SVG doesn't regulate crypto and I wouldn't need a license.
CFSFormations: Panama, SVG or Malta. According to them, Panama is the only country on this list which I wouldn't need a license to trade cryptocurrencies.
SFM: Belize. No reason provided.

*SVG = St Vincent and the Granadines

From what I got from those companies, SVG seems to be a good option. Have you guys already considered it?
 

pragmatic mouse

New member
Hey folks!

I'm in the exact situation as Dom Pedro, I'm also from Brazil, and looking to incorporate offshore to trade cryptocurrencies and open an IBKC account.

I've described my business to different incorporation companies and asked them what jurisdiction they think would be the best fit for my case. Below, I summarize what I got so far:

BBCIncorp: SVG*. Because SVG doesn't regulate crypto and I wouldn't need a license.
OffshoreCompanyCorp: SVG. Because SVG doesn't regulate crypto and I wouldn't need a license.
CFSFormations: Panama, SVG or Malta. According to them, Panama is the only country on this list which I wouldn't need a license to trade cryptocurrencies.
SFM: Belize. No reason provided.

*SVG = St Vincent and the Granadines

From what I got from those companies, SVG seems to be a good option. Have you guys already considered it?
got the same response when I asked,

I deduct SVG is used much less frequently than Seychelles and Belize, therefore brokers like IBKR or binance may aprove it. If I'm right that is a temporal solution, sooner or later legislators will force SVG trading companies out of business, it's a matter of time. A real and completely legal solution is to change tax residency moving to a tax haven. That's game over, you're out of the reach of legislators becoming expat.
 

username84447

New member

This link doesn't work as is. The following link is the same one, but without the tracking in the url.

 

complex

New member
- Stocks: If using US LLC to trade US stocks/options/futures, need to pay US taxes as generated in the US

From what I see this is not true. As per IRS at least:

NOTE: If your only U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent, you are NOT engaged in a trade or business in the United States.

The dividends paid from said company should also be taxed at a personal level. So you're liable to pay dividend/income taxes in your residency country if they are taxed at all.
 

complex

New member
Most of the times these setups are seen as too simplistic for reality.

Lets exclude Crypto for simplicity and focus on trading:

If that setup would work:
1. get a US LLC
2. get an trading account with Interactive Brokers
3. get the IB debit card
4. fund the IB account, trade

Potential profits you would draw from ATMs and or pay stuff with your debit card.


If that would work, not a single stock trader in the EU (or outside US) would pay taxes on trading the stock market.
And therefor it does not work.
At least not if the tax authorities from the country you are living in have a look at you.

For Germany for example just opening a foreign company is not enough.
If you run the daily business for the foreign company from Germany, then that is not valid and the business result will be fully taxed in Germany.

You would have to prove that the business decisions are taken in the US in our case.
You have to prove that by flight tickets, protocols and so on.
As a trader every major decision (buying/selling) would have to be made in the US then.

As @Dom pedro noted, the accounting trail will still show how funded the account and on top of that US authorities are likely to classify you as operating a business inside the US and you'd be taxed as such.
 

LimitlessPossibilities

Mentor Group Gold
What did you do, @Dom pedro?

I'm looking for the same lineup (Dellaware LLC for stocks, BVI for Crypto), but I'm still not sure about that, as far as making a C CORP (paying 21% on all pure profit) or LLC Sole Proprietorship (in this case, all taxation would come to my personal tax)
 

mAzzy

New member
With a Gibraltar non-dom LLC (resident in Andorra), would I have any troubles to open accounts with Interactive Brokers and Wise ?
 

FlipnShip

New member
With a Gibraltar non-dom LLC (resident in Andorra), would I have any troubles to open accounts with Interactive Brokers and Wise ?
Hey mAzzy, since you are an Andorrian resident, may I ask you in regards of the benefits of having Gib non-dom LLC?

Since Andorra is one of my top candidates of escaping the Eussr (not been there yet). I looks like you can open an IB account with an Andorrian residency and at least profits via shares (as long as you own less than 25 % of the company) should be tax free. I assume investing in GBTC & ETHE via Grayscale trusts should be free since they are ETFs? Which would be an interesting option for a part of one`s crypto holdings (ofc not your keys not your crypto).
 

mAzzy

New member
About the Gibraltar side company, I have a very specific need that should not apply to anyone else.

Yes for IB and shares. I have not heard the same for ETFs, sorry.
 
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