Best setup for crypto trading

[RobertNozick]

Hi all,
full-time crypto trader here. Italian citizen, want to move abroad to get a better tax treatment.
I make around 100k-150k per year doing active trading via software (algo-trading) on derivatives (perpetual swaps, options etc.) and decentralized finance (DeFi) products which I struggle to explain to my taxman.

I'm searching for:
1) near to 0% capital gain tax;
2) no accounting or reporting requirements (in crypto it'd a nightmare);
3) no need for banking account (again, in crypto it'd a nightmare). EMIs & crypto debit cards are enough to pay bills;
4) not too expensive lifestyle/company setup. I want go abroad to work and save, not to enjoy life in a non-financially responsible way. So, Dubai or Monaco are out of the question;
5) no shitty countries (i.e. Bulgaria);

I was thinking of Panama for tax residency. I don't know if an offshore company is needed to trade crypto, in that case I'm considering Seychelles or BVI for it.

Can it work? Ty

 

[Martin Everson]

You said you do active trading and are a full time crypto trader. This means you are doing it as a business activity in effect and hence you will fall under direct income tax rather than often lower capital gains tax i.e in countries like UK or Switzerland. Switzerland has no capital gains tax but it taxes income from crypto trading if done professionally as you are doing.

In terms of where to live for tax residency you need somewhere that does is tax free of low tax. Dubai would be easiest but its a no from you.

Your not actually passive investing your actively trading so access to lower or sometimes tax free capital gains rates will not apply to you. Don't believe the headlines about various crypto tax friendly jurisdictions read the details first.

Forget Panama unless you want to make yourself untouchable for banks etc.

P.S Maybe read my post on cost of Dubai and reconsider.

https://www.offshorecorptalk.com/threads/image-you-would-have-won-in-the-lottery.31469/post-154444

Last edited: Aug 29, 2021
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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.