Correct setup for cryptotrader?

[Fred]

algotrader said:
What is if I want to keep my personal fiscal residence in Bulgaria and have a company setup for crypto/FX/Futures trading with second residence in Dubai (spending only a few weeks/months there but >183 days in Bulgaria). Bulgarian tax authorities would not care about CIT of the Dubai business, only about dividends paid out to myself (and that would be taxed at only 5%). But would Dubai banks accept opening corporate bank accounts for foreigners with Dubai visa/residence but with main fiscal residence in Bulgaria?
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From Dubai Bank point of view you are Bulgarian Citizen (if even - it's not mentioned from your side) with Residence in Dubai, UAE.

They don't care and not responsible for anything outside the UAE.

Assuming you are not even Bulgarian Citizen - it's impossible for Dubai Banks to see any link to Bulgaria Residence.

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[ADROCK123]

algotrader said:
What is if I want to keep my personal fiscal residence in Bulgaria and have a company setup for crypto/FX/Futures trading with second residence in Dubai (spending only a few weeks/months there but >183 days in Bulgaria). Bulgarian tax authorities would not care about CIT of the Dubai business, only about dividends paid out to myself (and that would be taxed at only 5%). But would Dubai banks accept opening corporate bank accounts for foreigners with Dubai visa/residence but with main fiscal residence in Bulgaria?
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your dubai company turns into a bulgarian company because of cfc rules

 

[algotrader]

ADROCK123 said:
your dubai company turns into a bulgarian company because of cfc rules
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No, one of the big advantages in Bulgaria is that " CFC rules do not apply to taxes of individuals. If the company is controlled by a physical person who is a Bulgarian tax resident, the Bulgarian Controlled Foreign Company rules do not matter.". CFC rules are currently only applied if there's a parent holding company in Bulgaria owning a subsidiary abroad. And it depends on how much substance there's abroad.

https://www.newbalkanslawoffice.com/cfc-rules-in-bulgaria/
Of course, it might change in the future.

 

[Don]

algotrader said:
No, one of the big advantages in Bulgaria is that " CFC rules do not apply to taxes of individuals. If the company is controlled by a physical person who is a Bulgarian tax resident, the Bulgarian Controlled Foreign Company rules do not matter.". CFC rules are currently only applied if there's a parent holding company in Bulgaria owning a subsidiary abroad. And it depends on how much substance there's abroad.

https://www.newbalkanslawoffice.com/cfc-rules-in-bulgaria/
Of course, it might change in the future.
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ADROCK123 said:
your dubai company turns into a bulgarian company because of cfc rules
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CFC might not apply, but PE and PoEM might result in the same (so the risk depends on the structure & activities)

 

[Houdini]

Don said:
PE and PoEM
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can you please spell it out for a nowise like me?

 

[Don]

I'mRobot said:
can you please spell it out for a nowise like me?
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Permanent establishment (PE)​

PEs of foreign tax residents (e.g. branches) are treated as separate entities similar to Bulgarian residents for tax and accounting purposes.

The definition of a PE in the Bulgarian legislation follows, in general, the Organisation for Economic Co-operation and Development (OECD) model; however, it covers a broader scope of activities leading to a tax presence in Bulgaria. A PE is generally defined as a fixed place (own, rented, or otherwise used) through which a foreign entity partly or wholly carries out business activities in the country.

Place Of Effective Management (PoEM)​

POEM refers to a place where the key management and commercial decisions necessary for conducting a company's business activities are made. Since the residential status of any entity is to be determined every year, POEM is also required to be determined yearly.
Place of Effective Management is an internationally acceptable test to determine, whether a company incorporated in a foreign jurisdiction, is a tax resident of another country

 

[myhand]

Most traders are located in Bitcoin Valley Zug in Switzerland, have you looked in that direction already?

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[FixieHartmann]

myhand said:
Most traders are located in Bitcoin Valley Zug in Switzerland, have you looked in that direction already?
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Can anyone report how the daily life in Zug is? I'd imagine it to be quite calm and boring?

 

[Fred]

FixieHartmann said:
Can anyone report how the daily life in Zug is? I'd imagine it to be quite calm and boring?
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Boring is what clients told us after living there.

Age of them was between 25-35.

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[algotrader]

Fred said:
Boring is what clients told us after living there.

Age of them was between 25-35.
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It all depends all on your lifestyle preferences. For some it might also be considered boring to spend most of the year indoor in an autocratic sharia law desert country with the air conditioner running all the time.
Zug is located in the middle of the alps with lots of lakes nearby, so it can be interesting for outdoor/skiing/mountaineering/hiking/water sports enthousiasts. There's indeed no nightlife but you can always drive to Zürich (a metropolitain area with 1 Mln inhabitants) which is less than 1h away.
But the main problem I see with Zug is that it has some of the highest living costs in the world with the most expensive real estate and taxes aren't that low when you consider not just corporate taxes but also income and wealth taxes. Dividends are taxed as income in Switzerland (with some discount). Capital gains are only tax free for private passive investors with long holding periods, not for traders and corporations (there's a detailed set of rules applicable for each canton).