Incorporating offshore for trading cryptocurrency

#1

Hello everyone,

I am a resident of Canada and I just found this site. I have been involved in cryptocurrency since 2011. I have been taking a bit of profits and paying capital gains taxes on my withdrawals for the 5 years. The problem is, 2018 is going to be a big for me because I have some investments that I expect to 10x in value. If I proceed with active trading the gains are getting to be so much that they are really going to cut into my bottom line.

I would like to incorporate offshore somewhere so I can trade in a company’s name and then pay myself a wage through that company that I can pay taxes on. What would be the best location to do so?

I have looked at Hong Kong because I am in the area fairly often (living in Phuket now) but it seems that there are a lot of hidden costs to the 0% tax rate according to this thread:

Would someone be able to offer advice or point to someone who can?

#2

There is fresh and promising law in Belarus related to the cryptocurrency. There is rights granted by government of mining, ownership, exchange, buy-sell operations with 0% taxation till 2023. I can help you with incorporation as well as an accounting support.

#3

Hi there,
I’m busy going through a similar process.
You could check out NomadCapitalist for a bunch of free information. I recall reading about a place in Malayasia that was attractive and a couple Eastern Europe opportunities. He also offers a service to help you get it all setup, dont quote me but I recall it costing around $10k.
I have the time so I’ve looked into things myself and considering the following.
You can email me for details but basically as a Panamanian resident you don’t need to pay tax on foreign earned income (crypto). They make it pretty easy to become a resident and open a bank account.
Part of the process is opening up a company which the lawyer does
Its $3700 for the first family member. Thereafter its $1700 for the next adult/child older than 12 and $800 for children younger than 12. But if you’re only doing it for crypto then perhaps skip doing your family memebers
As part of the process you have to open a bank account and deposit $5000. Once your application process is completed, you may withdraw these funds.
You and your family would be required to visit Panama twice. Once to start your application and again once it’s been processed. So you’d need to factor in these plane tickets which will vary for everyone as well as costs while in country.
I’m already in the country so it makes sense for me to goes this way.
The only catch is that you have to visit the country every 2 years for 3 days.
I can put you in touch with the lawyer I’m using and more guidance with my experience so far.

Good luck, lets us know what turned out to be your best option

#4

Hello there!

Maybe it is a bit too late, but I would suggest to check Cryptocurrency trading company license in Estonia and go towards this solution.
For sure, company in Hon Kong with 0% tax sounds nice, however as you mentioned yourself, there will be a lot of following costs afterwards.

I’ve been helping to small and medium businesses to manage their operations across the world and from my point of view, I see several problems with your proposed solution - number one being the fact that most probably you won’t be able to open bank account for your Hon Kong company which conducts business with trading cryptocurrency. And without bank account there is really nothing you can do with it.

For sure, these offshore solutions sounds nice on paper with 0% tax rates on foreign income, however, nowadays more and more people face various problems with account opening and company without bank account in most cases is like a car without engine.

Therefore I recommend you to consider cryptocurrency company licence in Estonia which would make it a lot easier to open an account in banks or PSP which in your case would work. It would be totally legal, without any hassle with regards to administration and with corporate tax rate of 20% only on distributed profit, which in fact is great advantage. To get cryptocurrency trading license you would have to spend approximately EUR 4000, but in my opinion if you are interested in long - term business in this sphere, then it is worth it.