Structuring business entity to receive crypto payments as home country has banned exchanges

[moodymanc7]

Hello,


I am new to the forum and this is my first post here, I found this forum while searching for similar solutions.
I am looking for particular advice regarding structuring an entity.

I am a freelance social media manager and receive monthly payments from a client I work for in crypto, amounting to around $35,000 per year. The client does not pay in any other format, they are particular about this as they are a registered crypto business and make all payments in their own cryptocurrency. I receive the payment in crypto, and when I require to exchange it for my local currency, I convert this into BTC or ETH and then trade that for my local currency via a local crypto exchanges.


Up until now, this has been working well there have not been any issues with this arrangement.


However, recently my country of residence/citizenship has banned cryptocurrencies completely so I wont be able to convert the crypto I earn to my local currency via the cryptocurrency exchanges, which are shutting down.


To keep my business relationship intact, I am planning to incorporate a company in a crypto friendly jurisdiction and obtain a bank account in this jurisdiction, and receive all the funds via this entity. When I require the funds in my country, I can trade it via any exchange, withdraw USD/EUR/fiat currency to the new entity’s bank account, and transfer funds to my country via the regular banking route and I can access the funds in my local currency.


The newly incorporated business will be a remote entity and pay all required taxes in the crypto friendly jurisdiction.


In this regard, I am looking for advice on:

1. Which jurisdiction should I consider for such an incorporation? Ideally, I dont want to travel to this jurisdiction to set up the entity or for future compliances, and I would prefer one where bank accounts can be opened remotely too.
2. Is a bank account necessary or can I just use a service like Transferwise or Revolut which can receive fiat withdrawal payments from crypto exchanges, and then make a wire transfer?
3. Do I require a bank account to be opened in the same country where this new entity is incorporated? Or is there any other crypto friendly jurisdiction for banks?
4. If the bank account has debit cards, it would be even better as I can access the funds when I’m travelling abroad too.
5. Any other aspects to consider regarding this business structure?

Thank you in advance!

 

[CyprusLaw]

Hello,


I am new to the forum and this is my first post here, I found this forum while searching for similar solutions.
I am looking for particular advice regarding structuring an entity.

I am a freelance social media manager and receive monthly payments from a client I work for in crypto, amounting to around $35,000 per year. The client does not pay in any other format, they are particular about this as they are a registered crypto business and make all payments in their own cryptocurrency. I receive the payment in crypto, and when I require to exchange it for my local currency, I convert this into BTC or ETH and then trade that for my local currency via a local crypto exchanges.


Up until now, this has been working well there have not been any issues with this arrangement.


However, recently my country of residence/citizenship has banned cryptocurrencies completely so I wont be able to convert the crypto I earn to my local currency via the cryptocurrency exchanges, which are shutting down.


To keep my business relationship intact, I am planning to incorporate a company in a crypto friendly jurisdiction and obtain a bank account in this jurisdiction, and receive all the funds via this entity. When I require the funds in my country, I can trade it via any exchange, withdraw USD/EUR/fiat currency to the new entity’s bank account, and transfer funds to my country via the regular banking route and I can access the funds in my local currency.


The newly incorporated business will be a remote entity and pay all required taxes in the crypto friendly jurisdiction.


In this regard, I am looking for advice on:

1. Which jurisdiction should I consider for such an incorporation? Ideally, I dont want to travel to this jurisdiction to set up the entity or for future compliances, and I would prefer one where bank accounts can be opened remotely too.
2. Is a bank account necessary or can I just use a service like Transferwise or Revolut which can receive fiat withdrawal payments from crypto exchanges, and then make a wire transfer?
3. Do I require a bank account to be opened in the same country where this new entity is incorporated? Or is there any other crypto friendly jurisdiction for banks?
4. If the bank account has debit cards, it would be even better as I can access the funds when I’m travelling abroad too.
5. Any other aspects to consider regarding this business structure?

Thank you in advance!

There are easier ways to structure this for the amount you have mentioned. Happy to PM you if you would be interested in Cyprus

 

[Sols]

1. Which jurisdiction should I consider for such an incorporation? Ideally, I dont want to travel to this jurisdiction to set up the entity or for future compliances, and I would prefer one where bank accounts can be opened remotely too.

As mentioned Cyprus might work, but I'm concerned that the costs will eat up a significant amount of the 35,000 USD/year income. It's an elegant and probably effective solution, but calculate the costs carefully. @CyprusLaw can probably work out a competitive offer for you.

However, based on the description, this might be a case where a cheaper but still somewhat reputable (or at least not irreputable) jurisdiction might a viable option: BVI, Anguilla, Mauritius, Gibraltar, Nevis, Cook Islands, maybe even TCI.

If the flow is just... Form the company. Open accounts with some crypto exchanges. Receive crypto payments from your client. Convert to fiat. Transfer fiat to company bank account. Pay corporate tax, pay yourself, pay personal income tax. ... Then this might be a case where the aforementioned jurisdictions can still work.

1. Is a bank account necessary or can I just use a service like Transferwise or Revolut which can receive fiat withdrawal payments from crypto exchanges, and then make a wire transfer?

A bank account is not necessary. EMIs and other non-bank financial institutions are just fine.

1. Do I require a bank account to be opened in the same country where this new entity is incorporated?

Not required.

1. Or is there any other crypto friendly jurisdiction for banks?

Crypto friendliness is down to individual banks, not jurisdictions. For example, there are crypto friendly EMIs and banks in Lithuania, Cyprus, and Malta but not all EMIs or banks there are crypto friendly.

1. If the bank account has debit cards, it would be even better as I can access the funds when I’m travelling abroad too.

You need to be careful about spending company money, since it's legally not your money. The money belongs to the company.

1. Any other aspects to consider regarding this business structure?

Tax. Unless you live in a tax haven or a country whose tax laws are way out of date, the company you form will become resident for tax purposes ("tax resident") where you live. It will have to pay taxes on its profits, like a local company.

Also make sure that the crypto ban in your country doesn't also include dealing in crypto through overseas companies.

 

[moodymanc7]

There are easier ways to structure this for the amount you have mentioned. Happy to PM you if you would be interested in Cyprus

Thank you, yes, please PM!

As mentioned Cyprus might work, but I'm concerned that the costs will eat up a significant amount of the 35,000 USD/year income. It's an elegant and probably effective solution, but calculate the costs carefully. @CyprusLaw can probably work out a competitive offer for you.

However, based on the description, this might be a case where a cheaper but still somewhat reputable (or at least not irreputable) jurisdiction might a viable option: BVI, Anguilla, Mauritius, Gibraltar, Nevis, Cook Islands, maybe even TCI.

If the flow is just... Form the company. Open accounts with some crypto exchanges. Receive crypto payments from your client. Convert to fiat. Transfer fiat to company bank account. Pay corporate tax, pay yourself, pay personal income tax. ... Then this might be a case where the aforementioned jurisdictions can still work.


A bank account is not necessary. EMIs and other non-bank financial institutions are just fine.


Not required.


Crypto friendliness is down to individual banks, not jurisdictions. For example, there are crypto friendly EMIs and banks in Lithuania, Cyprus, and Malta but not all EMIs or banks there are crypto friendly.


You need to be careful about spending company money, since it's legally not your money. The money belongs to the company.


Tax. Unless you live in a tax haven or a country whose tax laws are way out of date, the company you form will become resident for tax purposes ("tax resident") where you live. It will have to pay taxes on its profits, like a local company.

Also make sure that the crypto ban in your country doesn't also include dealing in crypto through overseas companies.

Thank you for the detailed reply, really appreciated!

 

[JimBeam]

IMO 35k/year is not an amount it will be worth of having a company in Cyprus where the accountant alone will cost you about €3k/year (about 10% of the amount and there will be other costs too).

If it's prohibited it means that there are a lot of things going in closed circles.
So I would just try to find locals and just exchange BTC/ETH it for cash as I'm sure there are people still wanting to buy it.

Maybe you can try LocalBitcoins.com: Fastest and easiest way to buy and sell bitcoins - LocalBitcoins or some local reddits, twitter or something where those people hang out.

Or find some service where you can sell coins and get ATM card like advcash payment hub: mass payments, prepaid cards
(All depends on what's available in your country...)