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UAE vs Cyprus for crypto trading company

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yeah what jim beam said.

no need to compare. Just open uae freezone, easy banking.‌ become resident, enjoy november-may in uae and rest of year in CY or somewhere else.‍ f**k the cy corps, always hassle and slow to get anything done. CY does not⁠ check if you got foreign corps, they dont care
 
I agree︍ with the financial/tax related part. Still wondering if transferring money back from UAE to Europe︎ is such a big deal when you can prove the source of funds (already the️ case when you open bank accounts), unless you have points in mind that could possibly‌ be elaborated.

I'm not a fan of the 60 days rule personally, the tax residence‍ is much weaker; esp. in case of conflict of residence between countries.

Regarding beaches and⁠ nature I completely agree; if subjective elements had to be considered this is only a⁤ small part of the overall view though I believe (depending on the person too).
 
So, if you reside in EU (Cyprus) you can bank in any EU country and‌ could use many of the EMIs and banks available so your money doesn't has to‍ be only Cyprus.

Also, none of the UAE banks are currently crypto-friendly the way to⁠ cash out crypto it is via OTC where they will provide you with some SoF⁤ documents (at a price).

If you're trading with your own money (without a company), you⁣ can do it in both places in your name as there are no capital gains⁢ tax.

BUT:
Dubai has issued a statement where this kind of activity is considered business︀ activity (so 9% tax applies but no one know how to report it and pay︁ it) while there is no such thing in Cyprus.
Also, with Cyprus you have more︂ options to easily open accounts with crypto-friendly EMIs (both for personal and business use) as︃ most of these are in EU while that's not the case with UAE.
 
I was more referring to the difficulty to transfer money back from︅ UAE to EU than banking in general actually; though good to have your view on︆ it.

I'm not sure Cypriot banks are crypto-friendly either to be honest; I find the︇ way you're stating things quite weird. For crypto-friendly EMIS I think there's no big issue︈ on both sides, I guess it's a minor point in the comparison.

Your end note︉ is right, as UAE is about to apply the corporate income tax. I'd invite you︊ to read more about the capital gains taxation in Cyprus though, as your statement is︋ not correct (I'm sure other threads discuss the topic here on OCT).
 
You're right about this one!

"Individual traders in Cyprus can⁠ enjoy tax-free status for securities such as shares, stocks, bonds, ETFs, derivatives, and futures, but⁤ other assets like forex, precious metals, and crypto may be subject to progressive income tax⁣ rates up to 35 percent."
 
Good if it helps for this thread. Nb: derivatives and⁤ futures are not meant to have forex/crypto/precious metals as underlying (for those wondering)
 
DMCC crypto company solves all of your problems:

- No income tax
- No corporate‌ tax in DMCC FZ
- Crypto trading license

Only downside is you will pay a‍ 0.75% fee for OTC trades using off-shore banks and an additional fee for swift payments.⁠
 
That's interesting,‌ I didn't know that DMCC was exempt from CIT.

I remember someone in the past‍ (Fred I think) commenting that they were rejecting almost all application. Is this something you⁠ tried yet?

Do you know if a DMCC proprietary trading company is easy to onboard⁤ with exchanges?
 
I set-up a company in DMCC⁤ 6 months ago.

You can open a company account with all exchanges and you work⁣ under a regulated environment which is good (VARA)

Only current issue is exchanges do not⁢ have proper on/off ramps so you need to do OTC trades for that through an︀ off-shore bank.

Off-shore crypto banking options have also improved recently.
 
would be very new. Nothing is really cit exempt except a very small of‍ qualifying activities.
 
A number of finance and investment activities are exempted‍ (with some conditions).

I was told by another FZ that proprietary trading in cryptocurrency is⁠ a non-regulated activity and not exempted. I wonder if voluntary VARA regulation can change that.⁤
 
Yes, there are many‌ approved business activities.

Also some financial services are regulated activities. Those tend to be exempt‍ from CIT.
 
If Cypriot resident is trading crypto as an individual capital gains might be︂ taxed significantly with progressive tax rates.

So having Cypriot residency means that you can set︃ up a company outside Cyprus, preferably in a zero-tax country, and start a business on︄ behalf of that company.

Dividends received from such a company would be taxable with 2,65︅ GESY contributions only (with threshold).

Trading crypto in Dubai (even at the individual level) might︆ lead to a 9% tax. But having Dubai residency you can also set up a︇ foreign zero-tax country and receive dividends (non-taxable in UAE). In both cases, there is a︈ theoretical risk of PE, but this risk is usually manageable.
 
Do you think that a Cyprus IP Box company‍ could service the offshore trading company or fund?

The manager of the IT company would⁠ live in Cyprus with office and staff performing software development.

The trading company or fund⁤ would deal with KYC, risk management etc.

The IT company would charge royalties giving it⁣ a decent profit margin.
 
This video clarifies that day trading is subject to UAE CIT while︅ swing trading isn't:
 
But it︍ would be easier to withdraw the money tax-free in the UAE rather than in Cyprus,︎ as there is still some uncertainty regarding his software and business model as I understand️ it.

In any case, the savings in those two countries compared to many (other) European‌ countries are significant.
 
Which implies the need for audited accounts I guess? I've‍ spoken with a couple of auditors (not in UAE though) and complex crypto to crypto⁠ trading (many small transactions, not round trip to the original quote currency) across different venues⁤ could lead to high professional fees.

That worries me a lot more than paying 9%⁣ on profits.
 
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