Question Spaniard - Crypto - Exit strategy - 7 figures (Part 2)
- Thread starter FreeBit
- Start date
- Status
I have bank accounts in Georgia since 2018 - never heard successful story about Crypto cashout with significant amount of money.
See my full anser here:
https://www.offshorecorptalk.com/threads/cryptofriendly-banks.32480/post-163423
See my full anser here:
https://www.offshorecorptalk.com/threads/cryptofriendly-banks.32480/post-163423
Hey there is an article on cointelegraph today about UAE written by a CPA : The United Arab Emirates’ green digitization vision
He mention there about VAT : "On the other hand, utility tokens and non-fiat cryptocurrencies are considered commodities and are not subject to market regulations. Law No. 20 of 2018 on Anti-Money Laundering defines laundered funds to be assets in whatever form, including digital currencies. Article 3 of Law No. 8 of 2017 on value-added tax imposes a 5% tax on imported and exported︀ commodities. This tax may apply to utility tokens and non-fiat cryptocurrencies, as the FSRA considers︁ them to be commodities."
does it mean if you trade some utility erc20 tokens on︂ a platform online (outside of UAE, but same question for inside) or on the blockchain︃ directly, as a resident of UAE you could end up having to pay a 5︄ % vat on your whole volume (which can be much more than profit if you︅ are scalping), or VAT would not apply in any case to a trader or a︆ simple seller/buyer but only to some companies launching icos/token offering, or there is no risk︇ currently or having vat applied on crypto transactions ?
He mention there about VAT : "On the other hand, utility tokens and non-fiat cryptocurrencies are considered commodities and are not subject to market regulations. Law No. 20 of 2018 on Anti-Money Laundering defines laundered funds to be assets in whatever form, including digital currencies. Article 3 of Law No. 8 of 2017 on value-added tax imposes a 5% tax on imported and exported︀ commodities. This tax may apply to utility tokens and non-fiat cryptocurrencies, as the FSRA considers︁ them to be commodities."
does it mean if you trade some utility erc20 tokens on︂ a platform online (outside of UAE, but same question for inside) or on the blockchain︃ directly, as a resident of UAE you could end up having to pay a 5︄ % vat on your whole volume (which can be much more than profit if you︅ are scalping), or VAT would not apply in any case to a trader or a︆ simple seller/buyer but only to some companies launching icos/token offering, or there is no risk︇ currently or having vat applied on crypto transactions ?
Hey Fred I had a question,
When the bank starts to ask to provide entire documentation for invoices, as it happened to a contact 2 times in last 3 years for a very legit consulting business, he had to provide the same file for review the client would get. Thus they would spot your business is crypto related and freeze the account instantly or forever until you clear your case,︀ you might also not be able to open an other account for this company in︁ uae right ?
I wanna ask, if the company is mostly here to provide the︂ residence visa and a salary to secure the tax residency (including obtaining a tax residence︃ certificate), isn't there a risk that if the company get "busted" and blocked by uae︄ banks one who would stay in UAE would fail to get the tax residence requirement︅ despite respecting the 183 rules ? (with the consequence we imagine)
But maybe even then︆ one could bank offshore and send the salary from offshore which would still secure the︇ residence at an individual point of view, Am I right ?
If your target is︈ not to find a quick way to cashout but more to secure a 100% tax︉ residence in UAE can your method guarantee it ? Or is there a better way︊ to secure it when your only business is crypto trading, maybe if you hire someone︋ lets say an IT specialist you could make sure the substance in your company would︌ secure it and your own tax residence in the UAE?
As the cashout could be︍ made slowly at an individual point of view without risking too much with the FZ︎ which is here mostly to secure your residence at the personnal level.
When the bank starts to ask to provide entire documentation for invoices, as it happened to a contact 2 times in last 3 years for a very legit consulting business, he had to provide the same file for review the client would get. Thus they would spot your business is crypto related and freeze the account instantly or forever until you clear your case,︀ you might also not be able to open an other account for this company in︁ uae right ?
I wanna ask, if the company is mostly here to provide the︂ residence visa and a salary to secure the tax residency (including obtaining a tax residence︃ certificate), isn't there a risk that if the company get "busted" and blocked by uae︄ banks one who would stay in UAE would fail to get the tax residence requirement︅ despite respecting the 183 rules ? (with the consequence we imagine)
But maybe even then︆ one could bank offshore and send the salary from offshore which would still secure the︇ residence at an individual point of view, Am I right ?
If your target is︈ not to find a quick way to cashout but more to secure a 100% tax︉ residence in UAE can your method guarantee it ? Or is there a better way︊ to secure it when your only business is crypto trading, maybe if you hire someone︋ lets say an IT specialist you could make sure the substance in your company would︌ secure it and your own tax residence in the UAE?
As the cashout could be︍ made slowly at an individual point of view without risking too much with the FZ︎ which is here mostly to secure your residence at the personnal level.
No you can still open another account with another bank.
No residency is based︅ on the rule of 180, you don't even need to do any business.
Correct
If you use a website like Etoro︎ or even Kraken as they are established in the UAE it will be ok.
Funneling it through the FZ would be a better solution as it's deemed as business receiving payment is better. To put your mind at ease you can also set up an offshore account like an LLP in the UK as a pass through.
No residency is based︅ on the rule of 180, you don't even need to do any business.
Correct
If you use a website like Etoro︎ or even Kraken as they are established in the UAE it will be ok.
Funneling it through the FZ would be a better solution as it's deemed as business receiving payment is better. To put your mind at ease you can also set up an offshore account like an LLP in the UK as a pass through.
Please allow me to clarify something here - No licensing is required, but since February 2021 it is regulated for AML purposes, crypto asset service providers will have to register in a registry that will be held by the regulator and have to pass certain requirements. This could potentially change the wat Cyprus banks treat such crypto asset service providers, however, even if they don't there are a number of options with EMIs both in Cyprus and abroad, as well as, other foreign banks. With respect to the tax question︀ I note that when it comes to the taxation of cryptocurrencies these will fall under︁ the same tax principles as with any other business activities and a tax rate of︂ 12.5% will apply.
This in fact the case as no legal definition was attributed to︃ cryptocurrencies in Cyprus Tax legislation. Thus no clarification exists whether cryptocurrencies are securities (“titles”), currency︄ or a digital asset. The accounting practice (IFRS) considers cryptocurrencies as either inventory or intangible︅ assets, and as the the tax practice usually follows the accounting practice, inventories/intangible assets are︆ part of the normal business operations which are taxed at 12.5%.
This in fact the case as no legal definition was attributed to︃ cryptocurrencies in Cyprus Tax legislation. Thus no clarification exists whether cryptocurrencies are securities (“titles”), currency︄ or a digital asset. The accounting practice (IFRS) considers cryptocurrencies as either inventory or intangible︅ assets, and as the the tax practice usually follows the accounting practice, inventories/intangible assets are︆ part of the normal business operations which are taxed at 12.5%.
It says that residency certificate is delivered when six conditions are met, including providing these two :
- Six months worth of bank statements in the UAE so they need to see an income coming to your uae account probably from a UAE business
- Valid proof of income in the UAE (i.e., employment agreement, salary certificate, etc.)
Its all how you position it and it can be done very quickly depending on WHO does it for you. In some cases if you work for a well known Real Estate agency/developer you can get your tax certificate almost immediately as the tax︀ rules in certain countries require you to provide proof before they deregister you for tax.︁ Without it you can be taxed by your previous country up and until you provide︂ it.
But if you do not get in fact uae sourced income, as a salary (for example if your FZ is dormant in the setup) but︀ respect the 187days presence in uae, along with the other point (apartment reantl contract), are︁ you guaranteed to get that tax residence certificate ?
Yeah, regarding the company formation and getting the company+personal bank accounts, there are no issues as everything is straight forward.
The actual issues are regarding the “methods” used to obfuscate the origin of the funds that will be received into those bank accounts.
Why should anyone obfuscate since we’re talking about legit coins bought when one btc was $500-$1000?
And that’s a big red flag since the people offering the setup are not willing to provide more details.
I mean, the setup involving that the payouts to be considered merchant payments by the local UAE banks is considered money laundering since those invoices will be fake and have nothing to do with a real business.
And not to mention that︀ the risk is very high if you end up with some money laundering charges. Why︁ risk that instead of paying taxes in your local country?
here’s a news article regarding︂ money laundering charges in UAE (of couse, it says drugs and pakistan....but still)
https://m.khaleejtimes.com/news/cri...ines-up-to-dh160-million-for-money-laundering
PS: I think that people offering “solutions” on top of simple company formation services should provide︃ more details because some people might end up regretting when something will go wrong.
The actual issues are regarding the “methods” used to obfuscate the origin of the funds that will be received into those bank accounts.
Why should anyone obfuscate since we’re talking about legit coins bought when one btc was $500-$1000?
And that’s a big red flag since the people offering the setup are not willing to provide more details.
I mean, the setup involving that the payouts to be considered merchant payments by the local UAE banks is considered money laundering since those invoices will be fake and have nothing to do with a real business.
And not to mention that︀ the risk is very high if you end up with some money laundering charges. Why︁ risk that instead of paying taxes in your local country?
here’s a news article regarding︂ money laundering charges in UAE (of couse, it says drugs and pakistan....but still)
https://m.khaleejtimes.com/news/cri...ines-up-to-dh160-million-for-money-laundering
PS: I think that people offering “solutions” on top of simple company formation services should provide︃ more details because some people might end up regretting when something will go wrong.
- Status