MALTA/DUBAI/HUNGARY/CYPRUS - whats the best play in this scenario?

[zaybxc]

Tax residency.

No company: a natural person⁠ trading crypto doesn't need a company.

The idea is:
- relocate to Hungary and live⁤ there 183+ days a year to become tax resident (I won't be resident in any⁣ other country);
- swap between cryptos and stake (tax free);
- sell crypto for fiat⁢ when cash is needed (15% tax).

On paper Hungary looks good but the country is︀ notorious for being corrupted and a bureaucratic nightmare, so I'm wondering if you reckon to︁ be worth to relocate there for a EU crypto trader...
Maybe it's difficult to find︂ a honest and competent accountant to file a tax return? Or maybe other problems?

 

[jesuschrist]

Switzerland abolished numbered bank accounts earlier⁠ than Hungary.

For most people the⁣ biggest problem is the language, even people who work in the banks only speak basic⁢ English, the accountants and professionals speaks it good though.

Actually the difficult language and the︀ bureaucratic nightmare is an advantage for us, because the cryptobros from the west can't go︁ past the first steps, so they choose easier and more straightforward jurisdictions like UAE, if︂ they would choose HU the EU would force all the loopholes here.

So far only︃ the Chinese come to HU to cash out 100millions and buying up castles and other︄ assets in Europe.

I think your plan sounds good, if you are a trader you︅ can even keep the most of the profit in USDC and as long as you︆ don't convert it to fiat you don't have to pay tax after it.
You can︇ even spend some of that USDC with a crypto card.

I suffered some losses a︈ few years ago with FTX and Celsius and I claimed crypto lossess, the next year︉ I paid much less than 15% income tax. 😎

 

[gonliss]

In most cases this is a taxable event. Spending USDC with a crypto‌ card is equal to converting to FIAT - which basically is a taxable event.

 

[toums]

all depend of your residency tax country..

 

[zaybxc]

I guess google translator on‍ mobile phone should suffice in most cases when talking to people... probably renting a house⁠ or buying a car might be tough.

That's good, so there shouldn't be problems to file a⁣ tax return.

Probably I'm missing something, but︂ for a EU cryptobro it looks straightforward, way easier than UAE.

Yep, that's the part︆ I like: it's very handy to plan how much fiat to get the following year︇ and the amount of tax to pay.

I would avoid this, it generates︉ tax events.

So, all in all Hungary seems doable... Thanks @jesuschrist for your comment and︊ as every year tonight is gonna be great for you, enjoy! 🙂

 

[pirbtc]

Estonian company in Cyprus wont become Cyprus︀ company due to company residency rules?

 

[Don]

Foreign company tax residence will be assessed based on a double tax‍ treaty article 4.

"Where by reason of the provisions of paragraph 1 a person other⁠ than an individual is a resident of both Contracting States, the competent authorities of the⁤ Contracting States
shall settle the question by mutual agreement due regard being had to the⁣ place of effective management of such person or any other relevant criterion."

 

[lili247]

@toums @jesuschrist I have an account with OTP HU for 8 years because I have‌ real estate in Budapest. I’m tax resident in Malta.

A few years ago I withdrew‍ 100k€ from Kraken to OTP, no question asked.

Do you think that it would still⁠ be the same today ? And for bigger amounts like 500k€ ?

 

[toums]

Yes. 500K is not really big.
If you are afraid about it, you⁤ can still do it in 2/3/4 transfers to test it.
I would just not keep⁣ the whole money there for too long (= when you send it there you should⁢ know already what you will do / where you will put next the money).

 

[EliasIT]

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[lili247]

I did two withdrawals, one in May and one in June, totaling €250k.⁤
Kraken → OTP → IBKR, all on the same day each time.

The bank contacted⁣ me to ask for documents. I provided the Kraken OTC sell order, the Kraken withdrawal⁢ confirmation, and the IBKR deposit confirmation for each transaction.
I haven’t heard from them since,︀ so I guess it’s okay.

I’d like to make other transfers for a few hundred︁ thousand euros, but I don’t want to risk having my account frozen.
If they just︂ say “please stop withdrawing from crypto exchanges” but don’t close my account, that’s fine with︃ me.

I tried emailing the KYC guy, but it seems he no longer works at︄ OTP.

Have you made any large withdrawals in the past few months?
How did it︅ go?

Do you think upgrading to their digital private banking offer to “please them” would︆ make them less bothersome?

The thing is, I have some medical issues at the moment︇ and can’t fly to Hungary if things go south...

 

[lili247]

@toums I would PM you but it seems I can't.

 

[DeepDrilling]

Malta can work if you qualify as non-dom and remit nothing locally, but the remittance‌ basis has caveats.

Cyprus is popular for crypto with clear frameworks and potential for 0%‍ if structured right - but what’s your timeline and risk appetite?

Are you looking for⁠ personal cashout only, or willing to consider using an offshore company for more flexibility?

 

[jesuschrist]

Yes, even larger than that, everything was fine.
When you‍ opened the account at OTP Bank you probably got a contact card from whoever manages⁠ your account.
Just call or email before you withdraw to notify them.

Hungarian banks don't⁤ really like Kraken though, no idea why, but I got many of my deposits blocked⁣ by them, but nobody has a problem with Bitstamp.
I think if you would have⁢ problem it's more because of Kraken, not because of crypto.

 

[toums]

Never had any pb kraken⁣ -> OTP with high 7 digits. Maybe if you have a 'lakcimkartya' = address card⁢ in hungary (mean you own something here or you rent legally something here), make the︀ thing more easier with the bank. Same with Slovakia.

 

[lili247]

Thank you guys @jesuschrist @toums for the infos it's helpful.

Maybe that now that I've‌ sent docs once to OTP regarding Kraken it'll be smoother next time.
Also they asked‍ me what was the purpose of my account and my link to hungary (since I'm⁠ non-resident) so I told them "real estate" and sent them proofs, maybe they "forgot" or⁤ never noted this when I opened the account.

Ok I also have Binance, I could⁣ try that.

Bitstamp I got an account since 2014 but never used it so I⁢ guess it's like if it was new so maybe they'll ask for stuff if I︀ do big crypto deposits.

Good info about the 'lakcimkartya', I know I have a HU︁ tax number, I try to get it next time I fly there hopefully in a︂ few months.

 

[toums]

If you're an EU citizen, you can complete︂ the entire process online: https://enterhungary.gov.hu/eh/tajekoztato/en/DUMA

As long as you own a flat or rent︃ something in Hungary, you can register as if you're planning to stay more than 90︄ days per year. They'll issue you the 'immigration card', which legally allows you to stay︅ in Hungary beyond the 90-day limit , even though no one really verifies it. After︆ that, they've started automatically sending the 'lakcímkártya' (address card) without requesting any additional documents. So︇ the whole process is much smoother than it was 10+ years ago.

Both cards will︈ be sent to your Hungarian address.

Basically, once you have this address card, banks will︉ assume you live in Hungary or have ties here , so they're much less likely︊ to bother you after that.

 

[lili247]

Thanks that's super helpful, I guess once I got the immigration card and lakcímkártya I‌ could open a new bank account online just in case (I'll just ask someone to‍ take the mail in my mailbox if I still can't fly there).

 

[lory]

You could just rent a mailing address through Clevver or a similar service⁠ for the time you're away.