Setup for pooling resources for invoices

[AnchoredUnbound]

Have a small mission DAO/cooperative basically and need a company/financial setup where we can pool resources (some crypto, some fiat) to then be able to pay subcontractor project invoices in fiat international wire.

Looking for cheap/easy setup, low hassle (not going to get blocked over proof of funds, or at least there's a clear path to appeasing the service; what info do we need? Hard with crypto...), and support probably $50->$100k "turnover" but this really isn't a business, all money pooling into account will be spent on contracting fees. So a country/bank/EMI/etc that's cool with decent amount of throughput, not a huge hassle, and tax-wise doesn't care that will have a couple years of zero profit just in-out.

Please mention all decent options that come to mind so I can research/educate myself further. Thanks so much!

 

[Sols]

Form a company some place easy and decent (US, UK, Cyprus, Hong Kong, Mauritius, UAE). This company is a business services company with clients (your business/es) and service providers (the contractors).

Client and Contractor agrees on a price. Both sign agreements with the Services company.

Contractor invoices Services company for example 10,000 USD.
Services company invoices Client 10,000 USD plus some margin (usually somewhere in the range of 0.50-5.00%).
Client pays Services company.
Services company pays Contractor.

At the end of the year, the Services company is left with a tiny profit on which it pays corporate income tax. Think of this as cost of doing business. The profits can be paid out as dividends to the shareholder/s of the Services company.

It's a pretty common setup. Shouldn't be a huge problem opening EMI/bank accounts for it. Depends on overall profile of the involved parties.

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This is the probably the answer to your question.

 

[AnchoredUnbound]

"Form a company some place easy and decent (US, UK, Cyprus, Hong Kong, Mauritius, UAE)."
"Depends on overall profile of the involved parties."

This is the part I was asking about. We need a country and bank/EMI that's cheap and easy to setup, where we can pool our crypto to in order to pay vendors. I doesn't seem easy since it'll look like plain crypto cashout/money laundering, so I'm asking for experience/wisdom on this topic for specific countries and banks/services and how to avoid issues.

 

[Sols]

AnchoredUnbound said:
This is the part I was asking about. We need a country and bank/EMI that's cheap and easy to setup, where we can pool our crypto to in order to pay vendors.
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Form a company in for example one of the places I mentioned. Then you can bank them with crypto-friendly EMIs/banks like Zen, Verifo, Klarpay, iSX, Wallter, or Capital International.

I don't know what you consider cheap. But it's going to cost a few thousand EUR/GBP/USD to get it all set up, especially if you want crypto friendly fiat rails.

AnchoredUnbound said:
I doesn't seem easy since it'll look like plain crypto cashout/money laundering, so I'm asking for experience/wisdom on this topic for specific countries and banks/services and how to avoid issues.
Click to expand...

Have done and seen these setups dozens of times, using the jurisdictions and banks/EMIs mentioned above. Avoid issues by structuring the agreements correctly and by explaining the setup clearly to your banking partner(s), so that if they accept you, they do it with a full and complete understanding of your business.

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This is the probably the answer to your question.

 

[AnchoredUnbound]

Sols said:
Form a company in for example one of the places I mentioned. Then you can bank them with crypto-friendly EMIs/banks like Zen, Verifo, Klarpay, iSX, Wallter, or Capital International.

I don't know what you consider cheap. But it's going to cost a few thousand EUR/GBP/USD to get it all set up, especially if you want crypto friendly fiat rails.


Have done and seen these setups dozens of times, using the jurisdictions and banks/EMIs mentioned above. Avoid issues by structuring the agreements correctly and by explaining the setup clearly to your banking partner(s), so that if they accept you, they do it with a full and complete understanding of your business.
Click to expand...

Would like to keep setup under $1000. Any chance an easy UK Ltd would work with any crypto friendly EMIs? And at what point does EMI start asking about origins of crypto, and what documentation can we provide to clear things? Thanks for your insight so far.

 

[Sols]

AnchoredUnbound said:
Any chance an easy UK Ltd would work with any crypto friendly EMIs?
Click to expand...

UK company and banking with Zen or Verifo might work and not be prohibitively expensive to set up.

AnchoredUnbound said:
And at what point does EMI start asking about origins of crypto, and what documentation can we provide to clear things?
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They will ask about it during the account opening. Explain everything in full. Give them a chance to understand your business entirely from the get go. If it turns out that they can't accept you, that's something you want to find out ASAP ”” not after a few months in and suddenly they close the account down.

As for documentation, it's the usual stuff: agreements and invoices will suffice in most cases. You might need to show copies of passports or other KYC for the Contractors, so be prepared for that. Each counterparty should ideally be independently verifiable somehow (website, LinkedIn profile, social media presence, public company registry). In lieu of that, you'll need to provide whatever supporting docs the EMI/bank asks.

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This is the probably the answer to your question.

 

[AnchoredUnbound]

Sols said:
UK company and banking with Zen or Verifo might work and not be prohibitively expensive to set up.


They will ask about it during the account opening. Explain everything in full. Give them a chance to understand your business entirely from the get go. If it turns out that they can't accept you, that's something you want to find out ASAP ”” not after a few months in and suddenly they close the account down.

As for documentation, it's the usual stuff: agreements and invoices will suffice in most cases. You might need to show copies of passports or other KYC for the Contractors, so be prepared for that. Each counterparty should ideally be independently verifiable somehow (website, LinkedIn profile, social media presence, public company registry). In lieu of that, you'll need to provide whatever supporting docs the EMI/bank asks.
Click to expand...

Well again it's not a business and (much of) the input is going to be crypto, so I don't know what documentation we could provide. An example heads up would be good, otherwise just recommendation of which EMI least likely to ask in the first place.

We're a cooperative of scientists/engineers. We'll be grouping crypto (and likely some fiat) funds, and then paying invoices from legit/public scientific business/vendors.

Invoices from the (some EU, some India) vendors/contractors (just 2->3 probably) will be very easy to provide.

But money we're wanting to input to account in order to make these payments, that's where I'm confused. I hear scare stories of Revolut etc wanting proof of origin/funds and then sometimes not even believing documentation once provided. I dont know what documentation we could even provide, a letter saying "hey my name is Tim and this $3k crypto inputted totally belongs to me plz believe me"? Members providing proof of where/when they originally bought the crypto however many months/years ago (cuz thats gonna be a wildly intrusive hassle lol)?

 

[Sols]

AnchoredUnbound said:
Well again it's not a business and (much of) the input is going to be crypto, so I don't know what documentation we could provide. An example heads up would be good, otherwise just recommendation of which EMI least likely to ask in the first place.
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They will all ask sooner or later. You're going to have explain and prove where the money is coming from and going to.

AnchoredUnbound said:
But money we're wanting to input to account in order to make these payments, that's where I'm confused. I hear scare stories of Revolut etc wanting proof of origin/funds and then sometimes not even believing documentation once provided. I dont know what documentation we could even provide, a letter saying "hey my name is Tim and this $3k crypto inputted totally belongs to me plz believe me"? Members providing proof of where/when they originally bought the crypto however many months/years ago (cuz thats gonna be a wildly intrusive hassle lol)?
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Well, you can't just have a bunch of people and entities pool money in another company for sake keeping purposes or as a communal piggybank or expense vehicle. That's called being a bank, or some other financial service.

You can set up joint ventures for specific investments or something like an investment funds if you want the funds to be more broadly usable (subject to regulatory approval). But you can't act like a makeshift bank.

What I proposed above, where you create an entity for specific transactions (recurring or one-off), is not considered a financial service. That's just companies paying for and providing services.

But if you want Tim to be able to randomly deposit 3,000 USD in fiat in a company bank account, that's not sustainable. That type of transaction only makes sense if Tim is buying something from the company, inserting capital as a shareholder, or issuing a director's/shareholder's loan to the company (which must be carefully controlled to not trigger tax concerns).

I think your expectations unfortunately are at odds with the realities of the fiat systems of today. If you stick to just crypto, there are far fewer controls in place, although many of the same laws may still apply.

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This is the probably the answer to your question.