Question Spaniard - Crypto - Exit strategy - 7 figures

[FreeBit]

Hello,
I'm new here and I would like to ask you if I'm on the right path with the exit strategy I'm working on.

First, bit of background.
Get into cryptos on 2013, been trading alts for all this time.
As you can imagine I made big money on 2017 but after that I've lost 99% of it.
I had money on cryptsy, mintpal, cryptopia and a few other exchanges that disapeared, meaning I have no way to proof part of the loses I had.
I expect to be back to the seven figures this year. Not even close to it now but I know what a crypto bull year can make.

Point is. I want to move to a low/free tax country and use a cryptofriendly bank to deposit my profits (atleast the money I want to use the next 4 years).

This is the strategy I'm working on:
A) Cyprus non-dom residency (with a dormant company) + Cyprus cryptofriendly bank account
B) Cyprus non-dom residency (with a dormant company) + Swiss company + swiss cryptofriendly bank account
C) Cyprus non-dom residency (with a dormant company) + UAE company + UAE bank account
D) UAE residency + UAE company + UAE bank account
E) Please add some options you guys would consider

Would this work?

 

[Mr Gus]

Malta maybe, as far as I know they are crypto friendly. Portugal NHR maybe, not sure how friendly they are towards crypto. Georgia and Malaysia maybe as well. Probably there are a lot more options but if they will work in practice I don't know.

Main questions is if you are able to get a bank account + being able to cash your crypto out on these accounts without any problems.

However I would personally not start setting up something based on gains that will be made in the future. Because we all know anything can happend in the crypto space. If you have a lot of wealth in crypto already I would start moving to a low tax country asap and realizing some of your profits already.

 

[tsu458]

My opinions as I'm in the same situation but already in cyprus. Currently thinking about C.

A):
It's very hard to get a bank account for an offshore company jurisdiction like belize, and they might enforce local substance and you are controlling your company from cyprus, so theoretically you are subject to the local 12.5% tax again. A cypriot LTD could manage your cryptos (12.5% tax) but no local bank would accept your business. Some private banks could, but I think you need around 100k min deposit. So you could use some EMI but you never know how long they will exist...

Meanwhile it's still not clear if you would pay 20% capital gains on long-term profits from crypto if you keep the cryptos private. Securitys and so on are excempt and I have no clue if you would pay 20% capital gains proactively until that is figured out. But you would have a better chance with banking and lower min deposits if you keep the cryptos private.

B):
I think a Zug setup with a local director might work? I assume they got taxes on the gains there. But the dividends should be tax-free.

C):
Should work but I assume you either need some local presence or at least Dubai instead of RAK or so. I think it's easy to sell via OTC & invoice there and thus the least banking trouble.

 

[troubled soul]

Without Thinking for second


D) UAE residency + UAE company + UAE bank account

That will be the best option.
And with 7 figure You deserve the Dubai Life Style.

 

[offshore xpert]

Main questions are, where are you paying taxes (tax treaties with your country of residence) and what banks are crypto friendly in those countries where you can open the bank account with an offshore or midshore company. FOr my experience form offshore banks , they have so many problems with their correspondent banks that they are afraid of cryptos.

 

[FreeBit]

Malta maybe, as far as I know they are crypto friendly. Portugal NHR maybe, not sure how friendly they are towards crypto. Georgia and Malaysia maybe as well. Probably there are a lot more options but if they will work in practice I don't know.

Main questions is if you are able to get a bank account + being able to cash your crypto out on these accounts without any problems.

However I would personally not start setting up something based on gains that will be made in the future. Because we all know anything can happend in the crypto space. If you have a lot of wealth in crypto already I would start moving to a low tax country asap and realizing some of your profits already.

I've already checked Portugal NHR but my concern is that cryptos are in a grey spot also not sure if there is any cryptofriendly bank. And as you say that is my main concern, finding a bank to cash out that won't freeze my account

 

[Fred]

D) UAE residency + UAE company + UAE bank account

0% tax, no CRS, no public company register, no bureacracy

With a solution inside the EU your current headache will not stop - believe me.

As you want to cash out Bitcoin and don't conduct any business that requires a EU company D) is the way to go.

PS: In Bitcoin since 2015 without any expesnsive mistakes. Living in Dubai since 2016 - I know why.

 

[FreeBit]

My opinions as I'm in the same situation but already in cyprus. Currently thinking about C.

A):
It's very hard to get a bank account for an offshore company jurisdiction like belize, and they might enforce local substance and you are controlling your company from cyprus, so theoretically you are subject to the local 12.5% tax again. A cypriot LTD could manage your cryptos (12.5% tax) but no local bank would accept your business. Some private banks could, but I think you need around 100k min deposit. So you could use some EMI but you never know how long they will exist...

Meanwhile it's still not clear if you would pay 20% capital gains on long-term profits from crypto if you keep the cryptos private. Securitys and so on are excempt and I have no clue if you would pay 20% capital gains proactively until that is figured out. But you would have a better chance with banking and lower min deposits if you keep the cryptos private.

B):
I think a Zug setup with a local director might work? I assume they got taxes on the gains there. But the dividends should be tax-free.

C):
Should work but I assume you either need some local presence or at least Dubai instead of RAK or so. I think it's easy to sell via OTC & invoice there and thus the least banking trouble.

How is life in cyprus? paphos? are you because of crypto?

A) That means the worst sceario if I create an offshore company and cyprus goverment considers I'm managing it from cyprus is that I have to pay 12.5% corporate tax from the cash out?
I don't understand what do you mean with the 20% capital gain tax in cryptos. Isn't it tax exempt too?

B) What do you think about the swiss company + SEBA bank account from Cyprus?
Have you considered the loan way (coinloan, celsius, silvergate, etc)?

 

[FreeBit]

Without Thinking for second


D) UAE residency + UAE company + UAE bank account

That will be the best option.
And with 7 figure You deserve the Dubai Life Style.

what do you mean by dubai lifestyle??

Main questions are, where are you paying taxes (tax treaties with your country of residence) and what banks are crypto friendly in those countries where you can open the bank account with an offshore or midshore company. FOr my experience form offshore banks , they have so many problems with their correspondent banks that they are afraid of cryptos.

ok, offshore banks in belize and other small places discarded. Gibraltar would fit in that list? or are the banks there more crypto friendly?

D) UAE residency + UAE company + UAE bank account

0% tax, no CRS, no public company register, no bureacracy

With a solution inside the EU your current headache will not stop - believe me.

As you want to cash out Bitcoin and don't conduct any business that requires a EU company D) is the way to go.

PS: In Bitcoin since 2015 without any expesnsive mistakes. Living in Dubai since 2016 - I know why.

Do I get a fiscal residency there staying 2 days a year? If I don't do I still have to comply with Hacienda in Spain?
What are the problems I will encounter if I stay in EU?
Not worthit to have EU residency and a company in Dubai?

 

[Fred]

Do I get a fiscal residency there staying 2 days a year? If I don't do I still have to comply with Hacienda in Spain?
What are the problems I will encounter if I stay in EU?
Not worthit to have EU residency and a company in Dubai?

The Dubai company grants you the residence visa. The bank accounts will be opened with the residence visa therefore the banks consider you as UAE resident. As the bank consider you a UAR resident no reporting of your financial statements of UAE banks to your home country will happen. To keep this active you have to be 2 days a year in UAE. Beside of that UAE don't care were you stay.

That's why OECD calls it residence by investment to shield CRS reporting.

Beside of that Dubai is the right place to cash out small sums like low or mid figure 7 figure.

Cyprus doesn't have Crypto friendly banks and with 7 figure they will heavily start asking many questions I mean the average Joe earns maybe 1200€/m.
In UAE it's normal to have millions and the lifestyle requires it that's why the banks can't ask stupid questions for low millions.
Take care that the economy and society needs to fit your cash out plans as well. On cyprus with 1 million you are already one of few. In Du so you are one of many. Much more easy to fly under the radar.

 

[manukahoney]

Frick Bank in Liechtenstein claims they are very friendly to crypto, even offering custody, trading and other things.
It is a tiny bank comparing with other private banks around, but it may be a start.

Cyprus is a good choice for a tax-efficient jurisdiction, just make sure you will have enough evidence of "relocation" in case Spain tax authorities try to claim you still had "life" in Spain.

 

[FreeBit]

Frick Bank in Liechtenstein claims they are very friendly to crypto, even offering custody, trading and other things.
It is a tiny bank comparing with other private banks around, but it may be a start.

Cyprus is a good choice for a tax-efficient jurisdiction, just make sure you will have enough evidence of "relocation" in case Spain tax authorities try to claim you still had "life" in Spain.

Silvergate and SEBA in switcherland are also cryptofriendly, offering loans using bitcoin as collateral.
But not sure if I'll be able to proof the source of everything since I've lost a lot in missing exchanges.
also I don't know if I can be a cyprus resident and open an account there...
I'll contact them tomorrow and ask a few questions

The Dubai company grants you the residence visa. The bank accounts will be opened with the residence visa therefore the banks consider you as UAE resident. As the bank consider you a UAR resident no reporting of your financial statements of UAE banks to your home country will happen. To keep this active you have to be 2 days a year in UAE. Beside of that UAE don't care were you stay.

That's why OECD calls it residence by investment to shield CRS reporting.

Beside of that Dubai is the right place to cash out small sums like low or mid figure 7 figure.

Cyprus doesn't have Crypto friendly banks and with 7 figure they will heavily start asking many questions I mean the average Joe earns maybe 1200€/m.
In UAE it's normal to have millions and the lifestyle requires it that's why the banks can't ask stupid questions for low millions.
Take care that the economy and society needs to fit your cash out plans as well. On cyprus with 1 million you are already one of few. In Du so you are one of many. Much more easy to fly under the radar.

Sounds good but I still have some concerns about how I'm gonna still be considered by Spain. I'm still a resident in Spain since noone is reporting that i'm a fiscal resident in UAE?

Another issue is that I shouldn't be spending more than 183 days in any other country right?

 

[Fred]

Sounds good but I still have some concerns about how I'm gonna still be considered by Spain. I'm still a resident in Spain since noone is reporting that i'm a fiscal resident in UAE?

Another issue is that I shouldn't be spending more than 183 days in any other country right?

Of course to keep it clean you always have to move.

I just mention you the UAE side.

Look even if we have neutral position to this I see in reality that majority of our clients are most of the time abroad and using the UAE as there piggy bank.
Once they want to remit the money back to the EU they simply stay 1-2 years for 183 days in the UAE get the tax certificate and they are good.

In the practice experience you even don't need to stay 183 days in the UAE. 3-4 times each year for 2 weeks was enough. Tested by myself already in the past.

What you have mentioned is for all of your possible solutions necessary. The UAE is just the straightest and cleanest way. As already said if you move within the EU you still have tax, accounting, public company register - bureaucracy. With the UAE once everything is setup you can concentrate on building wealth and building your business. As mentioned many times 7 figure crypto cash out is the beginning and after it you go to the DIFC to build some good investment banking connections. They will be all happy to onboard you when they see that you have made your money through a UAE company being UAE resident with already existing local UAE bank accounts.

Cyprus is good as additional to a UAE residence in case your business require a company in the EU. In your case I can't see any need to do so.

Summary:

A) no crypto friendly bank on cyprus - you have to deal with some lithuania EMI (7figure? Never ever! Ask mistertango user)
B) complicated and expensive. You have to deal with two jurisdictions for tax, bookkeeping
C) overpowered. Of course if you really love Cyprus over everything or would you already live there - ok.
D) everything within one jurisdiction-no issues with turnover, no issue with workarounds regarding crypto covering as business earnings and so on.

Cyprus was sold as offshore in the past till now. At the end of the it's still in the EU. No matter how hard they try to sell you that it's offshore - it is not.
I can't transfer my experience to you but try Bank if Cyprus with 7 figures. That will be fun.

You already mentioned that you have lost 99% due to the last bear market. Do it this time better and don't fail with the cash out.

 

[xxx19980416]

Hello everyone,
I kindly would like to ask you about my tax strategy on crypto gains as my situation is similar to original thread author.
I currently lives in Japan and have Japanese passport, and expect to have million dollers of realized gains from cryptocurrency trading this year. Gains will come from both long term hodling and short term trading(Mainly futures and option trading), generated in offshore exchanges like Binance.
To reduce tax burden, I first thought I should move to countries with foreign income tax exemption like Georgia, Panama, Thailand. However, in this thread I see UAE residency+ UAE company+ UAE bank account strategy seems more attractive since I don't have to stay in one country for 183+ days and cost of setting up seems not much differ from Thailand Elite Visa or Panama friendly nations Visa.
Just to confirm, once I get UAE company and residency permit, I don't have to stay more than 183 days in UAE to be tax resident of there? It seems Residential property lease agreement or proof of ownership is required to obtain certificate of tax domicile of UAE, and I hear rent is expensive there. Anyone know if there are any way to save as much money as possible while maintaining tax residency of UAE?
If UAE tax residency maintenance cost is expensive, maybe I should start with Georgia or Thailand strategy and wait for mid 7 figures or 8 figure so that I don't have to reduce my crypto exposure.
Thanks in advance.

 

[whattay]

Sounds good but I still have some concerns about how I'm gonna still be considered by Spain. I'm still a resident in Spain since noone is reporting that i'm a fiscal resident in UAE?

Another issue is that I shouldn't be spending more than 183 days in any other country right?

I can tell you that - as long as you hold Spanish passport - you are liable to pay tax on your WW income. And spanish tax regime is one of the strictest on defaulters.
If you are a non-spanish-passport holding resident in Spain, then by changing domicile to UAE , you are good.

Dxb is the way to go, but i dont see how you can keep the spanish tax inspector away for good. And afaik UAE does CRS reporting since 2018.

You may need a bit more complex setup involving a trust + a non freezone company to work around UBO , but even then there is no real hiding.

 

[Fred]

I can tell you that - as long as you hold Spanish passport - you are liable to pay tax on your WW income. And spanish tax regime is one of the strictest on defaulters.
If you are a non-spanish-passport holding resident in Spain, then by changing domicile to UAE , you are good.

Dxb is the way to go, but i dont see how you can keep the spanish tax inspector away for good. And afaik UAE does CRS reporting since 2018.

You may need a bit more complex setup involving a trust + a non freezone company to work around UBO , but even then there is no real hiding.

As before mentioned - due to local UAE bank account opening with residence visa - the local UAE bank consider you as UAE resident and doesn't report under CRS - that's the key and main advantage of UAE setup.

Link:
https://www.oecd.org/tax/automatic-...sistance/residence-citizenship-by-investment/

Hello everyone,
I kindly would like to ask you about my tax strategy on crypto gains as my situation is similar to original thread author.
I currently lives in Japan and have Japanese passport, and expect to have million dollers of realized gains from cryptocurrency trading this year. Gains will come from both long term hodling and short term trading(Mainly futures and option trading), generated in offshore exchanges like Binance.
To reduce tax burden, I first thought I should move to countries with foreign income tax exemption like Georgia, Panama, Thailand. However, in this thread I see UAE residency+ UAE company+ UAE bank account strategy seems more attractive since I don't have to stay in one country for 183+ days and cost of setting up seems not much differ from Thailand Elite Visa or Panama friendly nations Visa.
Just to confirm, once I get UAE company and residency permit, I don't have to stay more than 183 days in UAE to be tax resident of there? It seems Residential property lease agreement or proof of ownership is required to obtain certificate of tax domicile of UAE, and I hear rent is expensive there. Anyone know if there are any way to save as much money as possible while maintaining tax residency of UAE?
If UAE tax residency maintenance cost is expensive, maybe I should start with Georgia or Thailand strategy and wait for mid 7 figures or 8 figure so that I don't have to reduce my crypto exposure.
Thanks in advance.

That's not true.

The rent in UAE is the same like in Bangkok and Tbilisi or even Panama.

From your mentioned above is UAE and Panama the most business oriented places. Do you really want to bank 7 figures in Georgia or even Thailand? Do you were ever to Georgia? I was and I can't imagine how somebody can put 7 figures there.

There is a reason why the king of thailand is living the whole year in Munich, Germany. Thailand can easily be a tax trap but most people get away with it because of lack of enforcement.

Panama has a very bad reputation from the past that's a fact. Some people say here you can bank with banks from Venezuela. Again do you want to bank 7 figures in Venezuela or a Venezuela Branch in Panama?

Simple reputation test: ask your mother what she have heard about Dubai and what about Panama. Let us know her answer.

 

[FreeBit]

I can tell you that - as long as you hold Spanish passport - you are liable to pay tax on your WW income. And spanish tax regime is one of the strictest on defaulters.
If you are a non-spanish-passport holding resident in Spain, then by changing domicile to UAE , you are good.

Dxb is the way to go, but i dont see how you can keep the spanish tax inspector away for good. And afaik UAE does CRS reporting since 2018.

You may need a bit more complex setup involving a trust + a non freezone company to work around UBO , but even then there is no real hiding.

I do have a spanish passport

As before mentioned - due to local UAE bank account opening with residence visa - the local UAE bank consider you as UAE resident and doesn't report under CRS - that's the key and main advantage of UAE setup.

Link:
https://www.oecd.org/tax/automatic-...sistance/residence-citizenship-by-investment/

Should I let them know that I'm not a fiscal resident there? You make this with "modelo 030" which details your new fiscal residency
https://www.agenciatributaria.gob.es/AEAT.sede/en_gb/procedimientoini/G321.shtml

 

[FreeBit]

Of course to keep it clean you always have to move.

I just mention you the UAE side.

Look even if we have neutral position to this I see in reality that majority of our clients are most of the time abroad and using the UAE as there piggy bank.
Once they want to remit the money back to the EU they simply stay 1-2 years for 183 days in the UAE get the tax certificate and they are good.

In the practice experience you even don't need to stay 183 days in the UAE. 3-4 times each year for 2 weeks was enough. Tested by myself already in the past.

What you have mentioned is for all of your possible solutions necessary. The UAE is just the straightest and cleanest way. As already said if you move within the EU you still have tax, accounting, public company register - bureaucracy. With the UAE once everything is setup you can concentrate on building wealth and building your business. As mentioned many times 7 figure crypto cash out is the beginning and after it you go to the DIFC to build some good investment banking connections. They will be all happy to onboard you when they see that you have made your money through a UAE company being UAE resident with already existing local UAE bank accounts.

Cyprus is good as additional to a UAE residence in case your business require a company in the EU. In your case I can't see any need to do so.

Summary:

A) no crypto friendly bank on cyprus - you have to deal with some lithuania EMI (7figure? Never ever! Ask mistertango user)
B) complicated and expensive. You have to deal with two jurisdictions for tax, bookkeeping
C) overpowered. Of course if you really love Cyprus over everything or would you already live there - ok.
D) everything within one jurisdiction-no issues with turnover, no issue with workarounds regarding crypto covering as business earnings and so on.

Cyprus was sold as offshore in the past till now. At the end of the it's still in the EU. No matter how hard they try to sell you that it's offshore - it is not.
I can't transfer my experience to you but try Bank if Cyprus with 7 figures. That will be fun.

You already mentioned that you have lost 99% due to the last bear market. Do it this time better and don't fail with the cash out.

Round 1: UAE vs Cyprus
UAE wins by ko

It definetly looks easier than Cyprus to handle a 7 figures cash out.
What about Switzerland? They do have some cryptofriendly banks there..
What are the biggest problems there?

Round 2: UAE vs Switzerland

 

[troubled soul]

Round 1: UAE vs Cyprus
UAE wins by ko

It definetly looks easier than Cyprus to handle a 7 figures cash out.
What about Switzerland? They do have some cryptofriendly banks there..
What are the biggest problems there?

Round 2: UAE vs Switzerland

My friend any round UAE will win.
UAE has no competition in this area.

 

[Fred]

Round 1: UAE vs Cyprus
UAE wins by ko

It definetly looks easier than Cyprus to handle a 7 figures cash out.
What about Switzerland? They do have some cryptofriendly banks there..
What are the biggest problems there?

Round 2: UAE vs Switzerland

You have to ask yourself: why additional headache?

It's again so many do's and dont's - bureaucracy, accounting and so on.

What we do sometimes is to setup a bank account in Switzerland for a client that have already setup his Dubai Company with residence. We always say if you want to overpay for a privat bank in Switzerland to have a good fealing - of course why not if you feal better with an overpriced Bank in Switzerland.

Take a look at this thread:
https://www.offshorecorptalk.com/threads/any-good-setups-in-switzerland.30453/page-4#post-163821