Looking for a crypto-exit strategy

[OlegB]

Hello,

I am researching what my exit strategies from crypto will be within the next 4-18 months, with portfolio worth $1mm - $2mm. My country is a member of EU (Central Europe) with significant taxation on crypto, I do not want to cash out to fiats here. The CRS and CFC obviously limit my options, my country participates in both. I am tax resident here where I live, it' likely to stay this way in the near future, in 5-10 years from now strongly considering to relocate. Travelling abroad from time to time to deal with the company matters is what I'm used to.

I'm considering what my options are as for 2021 considering my plans and needs:
- Required: I want to exit crypto to fiats with the minimal taxation possible (0% - 15% max in the worst case) with a new company set up and bank account somewhere.
- Required: I will use the company for active trading in financial markets (stocks, futures, options, crypto). Will need international broker account set up in the name of the company and friendly taxation rules.
- Nice to have: I might also consider to buy some very modest real estate (nothing fancy) in Cyprus, UAE in 2-5 years. Not sure yet to buy as a company or as an individual.
- My biggest considerations are CRS and CFC rules. By all possible means I do not want the company to be considered CFC and reported to where I live, neither the bank account reported with CRS.
- I know nothing is permanent in this world with exit options tightening, but I'm looking for a solution that would likely be stable for a couple of years at least. Reworking the structures every year costs money and time.

Any suggestions will be appreciated.

 

[CaptK]

You need a full package in the UAE that is a small studio for about 60K that wont get you much rent but builds substance in the UAE. Company and residency and ideally stay there for 6 months and cash out your crypto as comms or whatever your business is. You can then return back to your country rent the unit out and run your business as is. You will be liable for tax in your country of residency but if you pay yourself a salary and don't buy a Lamborghini you should be fine.

 

[OlegB]

Thank you, UAE is one of the ways to go based on my research.
I understand that I should stay in UAE for these 6+ months in order to get a tax residence there for me and my family, so that then I will be considered UAE tax resident by the local banks, so that they do not report by CRS/CFC to my country. Is that correct? Will that matter in a longer term if my company in UAE is an active / passive NFE?

How often will I need to travel there after that to keep that residence?

How much money should I prepare to set up the structure with the company, residency?
Can you advise reliable lawyers that can set up such structure?

 

[CaptK]

Yes, buy staying 6 months you get tax residency local banks wont report if you have a UAE address and telephone number on file.

Once every 6 months will suffice for residency.

PM me to discuss

 

[Fred]

Thank you, UAE is one of the ways to go based on my research.
I understand that I should stay in UAE for these 6+ months in order to get a tax residence there for me and my family, so that then I will be considered UAE tax resident by the local banks, so that they do not report by CRS/CFC to my country. Is that correct? Will that matter in a longer term if my company in UAE is an active / passive NFE?

How often will I need to travel there after that to keep that residence?

How much money should I prepare to set up the structure with the company, residency?
Can you advise reliable lawyers that can set up such structure?

You are already considered as a local UAE resident when you have your residence visa.

We open the local UAE bank accounts for you with the residence visa therefore the banks consider you fully as local UAE resident and no CRS reporting is triggered.

It's called residence by investment:

https://www.oecd.org/tax/automatic-...sistance/residence-citizenship-by-investment/
To keep the the residence visa active you have to be every 180 days for 1 day in the UAE. That's it.

Setup: 7.000 EUR
Yearly: 4.000 EUR

The above mentioned are for a Dubai Company Setup - no small emirate out in the nowhere.

We can do the Dubai Company Setup for you.

I'm already living since 2016 in Dubai and since 2015 in Bitcoin.

 

[OlegB]

Thank you both, Fred and CaptK.

This is definitely the most interesting option I have seen. I'm going to keep your contacts and I'm likely to follow this path this year.

Will I be able to open an account for the Dubai company at some international broker to trade on markets?
Are there any solid domestic market brokers in Dubai with exposure to international markets trading? Like the Saxo Broker level?

How do you judge the durability of such solution? I mean how likely you think it is OECD might push jurisdictions like UAE and their banks to change the way they consider residency, force them to ask the additional questions (like in the Fred's provided article) like "Where else do you have residency, etc. ".?

 

[CaptK]

If you use a UAE address and telephone number when registering your company then the bank have no reason to report as you are resident.

To be safe suffer a year in the UAE but after the 12th May as that is the end of Ramadan.
You don't want to be their during Ramadan!!!!!!

This gives you 2 months to plan and prepare.

 

[JackAlabama]

If you use a UAE address and telephone number when registering your company then the bank have no reason to report as you are resident.

To be safe suffer a year in the UAE but after the 12th May as that is the end of Ramadan.
You don't want to be their during Ramadan!!!!!!

This gives you 2 months to plan and prepare.

what is so bad during ramadan? just take it easy for a month and get some work done.

 

[CaptK]

what is so bad during ramadan? just take it easy for a month and get some work done.

Fair point

 

[Archer7]

Germany has a nice Crypto law; If you keep your Crypto for more than 12 month (1 year) then you pay ZERO tax. since you are an EU member, you can easily move to Germany, register your company, buy property and Get Residence Permit or BLUE CARD.

 

[CaptK]

Germany has a nice Crypto law; If you keep your Crypto for more than 12 month (1 year) then you pay ZERO tax. since you are an EU member, you can easily move to Germany, register your company, buy property and Get Residence Permit or BLUE CARD.

How will he sustain himself for a year?
Otherwise Germany will hit him for 50% plus his home country my also want a slice of the pie. He needs to break ties in the EU for the most tax efficient route.

 

[Silvio]

Germany has a nice Crypto law; If you keep your Crypto for more than 12 month (1 year) then you pay ZERO tax. since you are an EU member, you can easily move to Germany, register your company, buy property and Get Residence Permit or BLUE CARD.

Never heard of that and I highly doubt this "law" exists. I know many Germans that left germany solely to cash out their crypto so I find this story unreliable, unless you can prove it

 

[Saho]

Never heard of that and I highly doubt this "law" exists. I know many Germans that left germany solely to cash out their crypto so I find this story unreliable, unless you can prove it

This law exists and is alive. One you bought Bitcoin and wait one year you can sell without having to pay taxes in Germany. There's a few rules for that. You shouldn't move or stake your coins in that one year. Staking or generating dividends in any other way makes the period of one year invalid. And your coins can ONLY be moved between your personal wallet. If you send your coins to an exchange the period starts over again. Exchanging between coins etc. makes you taxable. Don't move your coins for one year and your coins are completely free of any taxes. Mining etc. is a different story. Buying BTC and selling after one year can be done without paying any taxes.

The persons you know are regular traders which makes you taxable or simply stupid.

Please check the following sources:
https://www.coin.ink/bitcoin-haltefrist-von-einem-jahrhttps://www.steuern.de/bitcoin-steuer.htmlhttps://www.btc-echo.de/bitcoin-ethereum-und-co-9-steuertipps-fuer-krypto-trader/

 

[Saho]

How will he sustain himself for a year?
Otherwise Germany will hit him for 50% plus his home country my also want a slice of the pie. He needs to break ties in the EU for the most tax efficient route.

That's not true. If he manages to get some money to survive one year or has some money then he should go for Germany and live there. Why should he break ties in the EU if Germany is a good solution? If he has sufficient documentation then it's no problem. How will he face taxes from Spain when living in another EU country completely independent from Spain?

 

[Silvio]

This law exists and is alive. One you bought Bitcoin and wait one year you can sell without having to pay taxes in Germany. There's a few rules for that. You shouldn't move or stake your coins in that one year. Staking or generating dividends in any other way makes the period of one year invalid. And your coins can ONLY be moved between your personal wallet. If you send your coins to an exchange the period starts over again. Exchanging between coins etc. makes you taxable. Don't move your coins for one year and your coins are completely free of any taxes. Mining etc. is a different story. Buying BTC and selling after one year can be done without paying any taxes.

The persons you know are regular traders which makes you taxable or simply stupid.

Please check the following sources:

Amazing. I stand corrected

 

[CaptK]

That's not true. If he manages to get some money to survive one year or has some money then he should go for Germany and live there. Why should he break ties in the EU if Germany is a good solution? If he has sufficient documentation then it's no problem. How will he face taxes from Spain when living in another EU country completely independent from Spain?

What is the definition of bought crypto.
I doubt you can bring crypto in from another country which you have owned for a year and cash out.

So if allowed he can take his crypto to Germany. His year starts on that day and he hopes and prays that they don't change the law in the 12 month period.

 

[Saho]

What is the definition of bought crypto.
I doubt you can bring crypto in from another country which you have owned for a year and cash out.

So if allowed he can take his crypto to Germany. His year starts on that day and he hopes and prays that they don't change the law in the 12 month period.

The definition is to have enough proof of your purchase. It doesn't matter where you purchased them as long as you're a tax resident in Germany when selling. The country @OlegB is living in could have some exit taxation on crypto. But since we don't know anything about that we'd need to wait for his reply. Most probably no company needed. The only problem could be his current country. In Germany you can also contact the local tax authorities for a "verbindliche Auskunft" where they guarantee to give you 100% valid information by law for your case. This probably also exists for his country. So, why not asking before spending lots of time, money and headache on useless company structures?

 

[thisisgood125]

Maybe I can help- having a Seychelles IBC. It maybe prudent to break down the amounts via different routes as well. That way you are always under radar.

 

[Archer7]

Never heard of that and I highly doubt this "law" exists. I know many Germans that left germany solely to cash out their crypto so I find this story unreliable, unless you can prove it

A simple google search could verify that. This law exist in Germany. In fact I myself moved to Germany simply because of that. Portugal has similar law on Crypto.

 

[gridline]

The definition is to have enough proof of your purchase. It doesn't matter where you purchased them as long as you're a tax resident in Germany when selling. The country @OlegB is living in could have some exit taxation on crypto. But since we don't know anything about that we'd need to wait for his reply. Most probably no company needed. The only problem could be his current country. In Germany you can also contact the local tax authorities for a "verbindliche Auskunft" where they guarantee to give you 100% valid information by law for your case. This probably also exists for his country. So, why not asking before spending lots of time, money and headache on useless company structures?

What would happen in case there is an exit taxation on crypto? I.e. the country taxes you on your holdings if you move to another country. Is there any ways to get around that? Given that the holdings are not declared to the local tax authority ofc.