With the price of Bitcoin having surged by over 100% in the past 12 months (perhaps not surprisingly) we are seeing an upsurge of interest in Cryptocurrency Trading.
Cryptocurrency Trading is an activity which lends itself well to an Offshore Corporate Structuring Plan. Here’s how:
- You set up a zero tax Offshore Company/International Business Company (“IBC”) with a nil tax jurisdiction based “Nominee” Director
- The IBC opens an account with a Cryptocurrency Exchange/s
- You are appointed as the IBC’s Authorised Trader or Trading Manager (ie you are given the power place the buy and sell orders on behalf of the company)
- All Exchange Account agreements would be accepted/signed/closed “Offshore” by the Company under the hand or by the authority of the Director
- You as the IBC’s Authorised Trader or Trading Manager go ahead and place buy orders & sell orders on the Company’s Exchange Account
- Periodically the Board of Directors meet to review and ratify (ie approve retrospectively) trades made in the previous period by the Authorised Trader/Trading Manager
- The Director sits in (& is seen to be managing/controlling the Company from) a nil tax jurisdiction.
- On any objective assessment it is clear that trading profits arise from decisions made by the Company Director ie in a nil tax environment.
- When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of trading profits generated)
- That living/spending money can be paid to your local bank account (which means it would be assessable income wherever you are tax resident though you should also be able to claim a sizeable amount of allowable deductions eg for home office, car, equipment, insurances, travel, stationary etc etc to reduce the amount of your “taxable” income at home)
- If you don’t want the vultures to know how much money you are earning by way of wages/commissions you could use an anonymous ATM or Debit/VISA card to withdraw your wages/commissions from an Auto Tele Machine. That said, (unless this is reimbursement for expenses incurred by you in working for the IBC) technically these receipts should be declared
- The majority of trading profits could be reinvested Offshore potentially tax free.
Where to incorporate?
If ease of set up/maintenance and/or ownership privacy are priorities and/or if you’re on a budget you might want to think about incorporating your Company in a Privacy Haven ie somewhere which (i) does NOT have a public register of directors, shareholders or owners & (ii) which does not require any local presence. Most people in that position choose to incorporate in either:
- Nevis – For detailed information click on this link: http://offshoreincorporate.com/st-kitts-and-nevis-offshore-companies/ ; or
- Seychelles – For detailed information click on this link: http://offshoreincorporate.com/seychelles-offshore-companies/; or
- Belize – For detailed information click on this link: https://offshoreincorporate.com/belize-offshore-companies/
Cost there would be:
- For a Belize IBC Company, including incorporation, registered/agent office service and one year’s basic admin: $US1,000. 2nd and subsequent years $690
- For a Nevis Company, including incorporation, registered/agent office service and one year’s basic admin: $1,400. 2nd and subsequent years $1,350
- For a Seychelles Company, including incorporation, registered/agent office service and one year’s basic admin: $720 2nd and subsequent years $575
Belize also offers an (Asset Protection focussed) LLC product. Check this link for details.
https://offshoreincorporate.com/belize-offshore-companies/
Other low cost and/or low maintenance and/or private and/or potentially nil tax jurisdictions worth considering include:
- Panama – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/panama-offshore-companies/
- Samoa – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/samoa-international-business-companies/
- St Vincent – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/saint-vincent-and-the-grenadines-svg-companies/
- The BVI – For detailed information (including pricing info) Check this Link: https://offshoreincorporate.com/products-services/offshore-companies/bvi-tax-free-ibcs/
- Hong Kong – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/hong-kong-companies/
(Sadly Nevis has recently declared Cryptocurrency Trading a prohibited activity so you won’t be able to incorporate a Crypto Trading Company there!)
You may be interested to know that the most popular place to incorporate a (potentially) tax-free Offshore Company is Hong Kong. Check this link which explains why it’s so popular: https://offshoreincorporate.com/why-incorporate-in-hong-kong/
If you’re looking for ease of maintenance you might want to take a close look at Samoa which has the simplest Account Keeping requirements (Check this link for details: https://offshoreincorporate.com/where-to-set-up-an-offshore-company-with-no-accounting-requirements/ )
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
