Malta, Cyprus or UAE for a trader?

[GrumpyMess]

The idea is to get a residency in a country where you don't have to pay taxes on trading activities and spend most of the time, but <180 days in other countries. Ideally, the country should provide TRC also. I am aware of three options:

1. Malta with non dom remittance basis taxation. 5k tax only. The drawbacks are the incomprehensible status of trading activity and possible requirement to stay 183 days. They have other programs, but there is little clear information about them.
2. Cyprus. It is possible only with the registration of the company, and tax-free trading using it. All other income will be taxed. About the same 5k for the audit and maintaining. Would like to avoid owning the company, as it adds a lot of extra hassle, but this is the only option here as far as I understand it. On the plus side, the requirement to stay only 60 days on the island to get TRC.
3. UAE. Requirement to stay 90 days to get TRC and many options for obtaining a residency. You don't have to worry about foreign income at all as I understand, especially if it is not remitted to UAE.

What points could I have missed and what else would you advise?

 

[Bill D]

About Malta and Cyprus -non dom status, I saw some jurist saying this could mean your tax domicile could remain in your previous domicile (country of citizenship), would need a confirmation from western EU lawyer that the tax residence as a non DOM is actually as solid as any other (for western eu countries which require you to prove your tax domicile elsewhere to avoid the tax)
CAn anyone confirm the non dom status of malta or cyprus cannot create any risk and that when acquiring the non dom status and living full year there you are actually transferring your tax domicile there in the sense of most agressiv western eu countries (Spain France Germany...)

 

[algotrader]

It is possible only with the registration of the company, and tax-free trading using it.

Not all trading revenues are tax free in Cyprus, only for capital gains arising from disposal of "titles". The exact wording according to PWC's tax summary:

Profits from disposals of corporate 'titles' are unconditionally exempt from CIT. 'Titles' are defined as shares, bonds, debentures, founders’ shares, and other titles of companies or other legal persons incorporated in Cyprus or abroad and options thereon. According to a circular issued by the Cyprus tax authorities, the term includes, inter alia, futures/forwards on titles, short positions on titles, swaps on titles, depositary receipts on titles, repos on titles, units in stock exchange indices on titles, and units in open-ended or closed-ended collective investment schemes (including, inter alia, undertakings for collective investment in transferable securities [UCITS], investment trusts and funds, mutual funds, and real estate investment trusts [REITs]).

I always thought that the previous definition from them included all kinds of financial instruments (including options/futures/CFDs/ETNs/ETFs on commodities/currencies/cryptos/indices) and excluded only forex trading and binary options but the new definition seems to exclude all other as well. Also, I'm not sure whether CFDs on shares fall under that new definition. So, tax-free trading in Cyprus seems only possible for certain instruments and underlying's. Otherwise CIT is 12.5% (and the Govt is currently discussing increasing it to 15%)

For UAE, the question is whether trading income for a freezone company will be considered foreign sourced and remain tax-free or whether it will be considered UAE-based activity and later taxed at 9%.

 

[zaybxc]

The idea is to get a residency in a country where you don't have to pay taxes on trading activities and spend most of the time, but <180 days in other countries. Ideally, the country should provide TRC also. I am aware of three options:

1. Malta with non dom remittance basis taxation. 5k tax only. The drawbacks are the incomprehensible status of trading activity and possible requirement to stay 183 days. They have other programs, but there is little clear information about them.
2. Cyprus. It is possible only with the registration of the company, and tax-free trading using it. All other income will be taxed. About the same 5k for the audit and maintaining. Would like to avoid owning the company, as it adds a lot of extra hassle, but this is the only option here as far as I understand it. On the plus side, the requirement to stay only 60 days on the island to get TRC.
3. UAE. Requirement to stay 90 days to get TRC and many options for obtaining a residency. You don't have to worry about foreign income at all as I understand, especially if it is not remitted to UAE.

What points could I have missed and what else would you advise?

I was also looking into Cyprus and UAE but just for crypto trading/investment:

• Cyprus is not tax-free: corporate tax if trading through a company (and yes, a lot of hassle) or income tax if trading as an individual (the good thing about Cyprus is that the crypto-to-crypto swaps are not tax events);
• UAE is changing its legislation, we don't know yet if it will remain tax-free, both for freezone company and individual.

About Malta and Cyprus -non dom status, I saw some jurist saying this could mean your tax domicile could remain in your previous domicile (country of citizenship), would need a confirmation from western EU lawyer that the tax residence as a non DOM is actually as solid as any other (for western eu countries which require you to prove your tax domicile elsewhere to avoid the tax)
CAn anyone confirm the non dom status of malta or cyprus cannot create any risk and that when acquiring the non dom status and living full year there you are actually transferring your tax domicile there in the sense of most agressiv western eu countries (Spain France Germany...)

The domicile does not depend on the country you are moving to, but on the country you are moving from and/or your citizenship country; it's something you have to check with a tax advisor in your current country of residence and/or citizenship.

 

[Bill D]

The domicile does not depend on the country you are moving to, but on the country you are moving from and/or your citizenship country; it's something you have to check with a tax advisor in your current country of residence and/or citizenship.

What I mean is for some country, even if not written in the law, it is required to prove that you are a full tax resident in an other country (in the same term as everyone). Being under an exception status which exempt yourself especially from specific taxes and a non-dom status could make you fail proving that from what I hear and make you tax residence in that specific citizenship country, and fail in the sense of that country to have transfered your full tax residence abroad even if you spend every single minut in that country and have all your interests solely in this country.

 

[khinkali]

'Titles' are defined as shares, bonds,

I wonder if Cyprus "looks through" a foreign company that trades crypto. If not, then there could be a nice solution; the company in a tax free jurisdiction trades crypto, buys back shares from profits, CY non dom shareholder is golden?

I believe that UK already has a problem with this if a non-dom owns a share in an offshore crypto fund then UK "onshores" it because...well nobody ever found a valid reason but they do it anyway.