Zero-Tax Strategy for Perpetual Traveler: Crypto Income, Offshore Banking, and Land Investments ?

[WormCasting]

You are a Latvian passport holder who sells digital services online and receives payments in cryptocurrency.
You travel perpetually, though sometimes you stay for longer than 183 days in Latin American countries.

You have never paid taxes in Latvia, never registered as a taxpayer there,
and have lived abroad ever since becoming location-independent.
You have no criminal record and maintain a clean legal status.

Your goal is to establish a legal setup that minimizes or eliminates personal and corporate tax obligations while maintaining full legal compliance.

You want to:

• Have a personal bank account for everyday private expenses.
• Have a corporate bank account for larger business-related transactions, such as land purchases between Mexico and Chile.
• Fund your personal account by loaning money from the corporate account and occasionally paying interest back to the company, with the aim of remaining personally tax-free.
• Accept crypto payments through a documented crypto payment processor, and sell that crypto via exchanges or P2P platforms through the company. Proceeds would be transferred into the corporate bank account when large purchases are needed.

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Questions & Relevant Considerations

1. Tax Residency

• Where should you establish tax residency to benefit from territorial or zero-tax systems? (e.g., Paraguay, Panama, Dominican Republic?)
• What are the implications if you stay more than 183 days in a Latin American country?

2. Company Incorporation

• Where should the company be incorporated for favorable tax treatment and crypto acceptance? (e.g., USA LLC, BVI, Panama, Estonia, UAE?)
• Should the company be structured as a disregarded entity, offshore IBC, or something else?

3. Banking

• Where can you open a reliable corporate bank account for crypto-related business income?
• Where can you open a personal bank account that allows international access and is crypto-friendly?

4. Crypto Compliance

• What documentation should be kept for crypto-to-fiat transactions to remain compliant?
• How do payment processor records affect corporate accounting or audits?

5. Loan Strategy

• Is loaning money from your company to yourself (with interest) a viable way to access funds while avoiding personal tax liability?
• What are the legal or tax implications of this setup in your chosen jurisdiction?

6. Residency & Substance

• Do you need economic substance (e.g., office, staff) in the country where the company is registered?
• What are the risks of being considered a tax resident elsewhere due to your travel patterns?

7. Long-Term Considerations

• How do CRS (Common Reporting Standard) and FATCA affect your banking or reporting?
• Is second citizenship or residency worth pursuing for long-term freedom?

 

[daniels27]

1. Tax Residency

• Where should you establish tax residency to benefit from territorial or zero-tax systems? (e.g., Paraguay, Panama, Dominican Republic?)
• What are the implications if you stay more than 183 days in a Latin American country?

This does not really sound like "you" are a perpetual traveller. I think the main question is which country you want to stay longer than the days required to become tax resident or form a permanent establishment.

Apart from that most countries in South America don't actually care about your income from sources outside the country.

2. Company Incorporation

• Where should the company be incorporated for favorable tax treatment and crypto acceptance? (e.g., USA LLC, BVI, Panama, Estonia, UAE?)
• Should the company be structured as a disregarded entity, offshore IBC, or something else?

You can just use a US LLC / Hong Kong Limited / Singapore Pte Ltd. and use your Peruvian etc. address on there. I mean have you asked around in those countries on the street and with notaries? Everybody will tell you that.

3. Banking

• Where can you open a reliable corporate bank account for crypto-related business income?

Why not keep the bitcoins? If the company is tax-free, you just need a personal bank account for off-ramping.

• Where can you open a personal bank account that allows international access and is crypto-friendly?

Just use some EMI. Swissquote, etc.

4. Crypto Compliance

• What documentation should be kept for crypto-to-fiat transactions to remain compliant?
• How do payment processor records affect corporate accounting or audits?

If you use a US LLC and keep your money in coins, nobody will ever ask.

5. Loan Strategy

• Is loaning money from your company to yourself (with interest) a viable way to access funds while avoiding personal tax liability?
• What are the legal or tax implications of this setup in your chosen jurisdiction?

My personal advice: Just abstain from it. You use a company that is tax free and take the money out to your personal account. Shareholder loans most often lead to troubles. If you really want to do it, you need to check the rules of the jurisdiction that wants to tax you. Some countries completely forbid it, while other countries have strict rules on minimum interest. Most of the time the rules just counter act any tax benefit you can gain.

6. Residency & Substance

• Do you need economic substance (e.g., office, staff) in the country where the company is registered?
• What are the risks of being considered a tax resident elsewhere due to your travel patterns?

If you are a permanent traveller, you avoid any substance and taxes. If you are not a traveller, you can read more here.

7. Long-Term Considerations

• How do CRS (Common Reporting Standard) and FATCA affect your banking or reporting?
• Is second citizenship or residency worth pursuing for long-term freedom?

Get some South American residency and have them report there where they won't care. Better get a residency where you spend 0 days for that one.

 

[WormCasting]

Thanks for the advice!

Would the following setup be the most useful?

Step 1: Residency

• Obtain Temporary or Permanent Residency in Paraguay
  (Possibly through the “Sauce” investment program for permanent residency)
• Apply for Paraguayan tax residency certificate.

Step 2: Incorporate Business

• Register a U.S. LLC (e.g., in Wyoming, Delaware, or New Mexico)
• Use only your Paraguayan residency ID, not your EU passport.

Step 3: Receive & Use Crypto

• Receive payments in cryptocurrency for digital services.
• Hold crypto until you need to cash out for larger purchases (e.g., buying land).

Step 4: Bank Account

• When ready to cash out:
  • Sell crypto through a corporate exchange account.
  • Transfer fiat proceeds to a corporate bank account or EMI.
  • Use your Paraguayan ID for KYC (avoiding CRS links to Latvia).

1.This setup should, in theory, prevent any CRS reporting to Latvia , assuming you avoid using your Latvian or EU identity in any part of the financial structure?

2. Is a Permanent or Temporary Paraguayan residency sufficient to open all these accounts, or is a passport still required?

3. Avoid any Paraguayan banks if you plan to use them outside the country , too many issues ?

 

[daniels27]

Step 1: Residency

• Obtain Temporary or Permanent Residency in Paraguay
  (Possibly through the “Sauce” investment program for permanent residency)
• Apply for Paraguayan tax residency certificate.

Why is that? Why would you need a certificate? And why Paraguay? Did ChatGPT come up with this?

No, I would not recommend either. If I was a government and somebody would come with a certificate or mentions Paraguay, I would launch a full investigation against him as it is almost certain that he is into some sort of bulls**t. Maybe sales in the dark net, illegal fakes, etc.

Step 2: Incorporate Business

• Register a U.S. LLC (e.g., in Wyoming, Delaware, or New Mexico)
• Use only your Paraguayan residency ID, not your EU passport.

Why are you so obsessed with your Latvian passport if you never lived there?

If you really never lived in Latvia, I would probably find somebody there and then use their address on all banks and documents, while never ever going back there. Otherwise, use something from South America, maybe Paraguay, but I would probably first scoop the whole internet to see what hipsters are selling and then abstain from that as it is too suspicious.

Step 3: Receive & Use Crypto

• Receive payments in cryptocurrency for digital services.
• Hold crypto until you need to cash out for larger purchases (e.g., buying land).

Yes, keep all in bitcoin. Why buy land? You want to live there? I would not do this unless I wanted to settle. And even then I may consider investing in REITs and rent.

Step 4: Bank Account

• When ready to cash out:
  • Sell crypto through a corporate exchange account.
  • Transfer fiat proceeds to a corporate bank account or EMI.
  • Use your Paraguayan ID for KYC (avoiding CRS links to Latvia).

Why avoid links to Latvia if you are not there? Why not use a personal account to cash out?

1.This setup should, in theory, prevent any CRS reporting to Latvia , assuming you avoid using your Latvian or EU identity in any part of the financial structure?

2. Is a Permanent or Temporary Paraguayan residency sufficient to open all these accounts, or is a passport still required?

3. Avoid any Paraguayan banks if you plan to use them outside the country , too many issues ?

You will still need a passport. But Maybe explain first why you are concerned about Latvia if you are not there?