Hello offshoretalk,
I'm currently evaluating this strategy with respect to legality and legitimacy, its a little grey zone. I've been advised by an accountant that its definitely doable and now I'm curious to see what the offshore community thinks. For context, I'm a crypto trader with a trading corp and a holding co in Canada, I am also born/raised here. In the last 2 years I've managed to make a good deal of money from the markets from futures, spot, memes etc. Lets say for hypotheticals I've made over 3m cad this year. Last year my company declared 400k cad (whatever the value declared from last year is fully accurate). Here's the interesting part.
This year I would declare something like 600k. Now let's say I were to move my company to Dubai from a CCPC to now a Dubai Corp, register there, open bank account, get law + accounting firm. Prior to moving, for my final year of my Canadian corp I'd pay income tax for the year lets say again at 600k. I would also pay a departure tax from the value of my company at 600k.
Now next year I could create a new wallet and transfer funds/continue trading and when its tax time I'd do another portion of the 3m so 800k now and file tax etc at 0% rate in Dubai. My holding co in Canada would fully own the foreign entity and file a t-1134 indicating foreign entity is owned. CRA verifies for up to 3 years (statute) and comes back to ask about my holding co filings, inquires about foreign co, and I give them the tax paperwork and filings related to my Dubai corp. I can now pull the money from Dubai corp to my holding co in Canada tax free at 0%. Continue process until all the money is back in Canada. FYI I open a trading desk in Dubai with an employee or contact work (Prove not FAPI).
What do you guys think? How much of a grey zone is this? How much risk do you guys believe this is taking?
I'm currently evaluating this strategy with respect to legality and legitimacy, its a little grey zone. I've been advised by an accountant that its definitely doable and now I'm curious to see what the offshore community thinks. For context, I'm a crypto trader with a trading corp and a holding co in Canada, I am also born/raised here. In the last 2 years I've managed to make a good deal of money from the markets from futures, spot, memes etc. Lets say for hypotheticals I've made over 3m cad this year. Last year my company declared 400k cad (whatever the value declared from last year is fully accurate). Here's the interesting part.
This year I would declare something like 600k. Now let's say I were to move my company to Dubai from a CCPC to now a Dubai Corp, register there, open bank account, get law + accounting firm. Prior to moving, for my final year of my Canadian corp I'd pay income tax for the year lets say again at 600k. I would also pay a departure tax from the value of my company at 600k.
Now next year I could create a new wallet and transfer funds/continue trading and when its tax time I'd do another portion of the 3m so 800k now and file tax etc at 0% rate in Dubai. My holding co in Canada would fully own the foreign entity and file a t-1134 indicating foreign entity is owned. CRA verifies for up to 3 years (statute) and comes back to ask about my holding co filings, inquires about foreign co, and I give them the tax paperwork and filings related to my Dubai corp. I can now pull the money from Dubai corp to my holding co in Canada tax free at 0%. Continue process until all the money is back in Canada. FYI I open a trading desk in Dubai with an employee or contact work (Prove not FAPI).
What do you guys think? How much of a grey zone is this? How much risk do you guys believe this is taking?