Have you earned a lot of funds with cryptocurrencies and do not want to "give them away" to tax agencies in your country? Well, know that generally owning cryptocurrencies are not taxable events, unless you sell in fiat or stablecoin so in this case you are in time to move to crypto-friendly countries. They are really very. In this article we will see that, crypto friendly banks and offshore trusts.
Crypto friendly countries:
✅Dubai (United Arab Emirates, Asia): No taxation on cryptocurrencies for individuals. However, there are specific regulations for companies. Residency is generally obtained in 3 or max 6 months.
✅Hong Kong (Asia): No taxation on capital gains from investments in cryptocurrencies. Companies that offer services related to cryptocurrencies are subject to taxation.
✅Singapore (Asia): No taxation on capital gains from investments in cryptocurrencies. Cryptocurrencies used for the payment of goods and services are subject to VAT (GST).
✅Malaysia (Asia): No tax on cryptocurrencies for individuals. However, there are regulations regarding the use of cryptocurrencies for businesses.
✅Switzerland (Europe): Capital gains tax for day trading and mining. Cryptocurrencies held as investments are not taxed. Tax residency is obtained after 90 days.
✅Portugal (Europe): No capital gains tax for individuals holding cryptocurrencies as investments. Cryptocurrencies earned by providing services are taxed as ordinary income. Tax residency is obtained by living in the country for at least 183 days per year.
✅Germany (Europe): Cryptocurrencies held for more than a year are exempt from taxation. Cryptocurrencies held for less than a year are taxed if the earnings exceed 600 euros. Residency is obtained after six months.
✅Cyprus (Europe): No capital gains tax on investments in cryptocurrencies.
✅Malta (Europe): No capital gains tax on long-term cryptocurrency investments. Day trading is taxed as ordinary income.
✅Liechtenstein (Europe): No capital gains tax for individuals. Businesses must pay corporate income tax, with a maximum rate of 12.5%.
✅Belarus (Europe): No capital gains tax and mining tax until 2023. After that, the rules may change. Currently, there is a 1% turnover tax for cryptocurrency-related businesses.
✅Georgia (Europe): Other country with 0 tax.
✅Slovenia (Europe): No capital gains tax on cryptocurrency investments for individuals. Mining is taxed.
✅Gibraltar (Europe): No capital gains tax on cryptocurrency. Companies offering cryptocurrency-related services are taxed at a flat rate of 10%.
✅Monaco (Europe): No income or capital gains tax on cryptocurrencies for residents.
✅El Salvador (Central America): Bitcoin is legal tender. There is no tax on capital gains from trading with Bitcoin.
✅Puerto Rico (Central America): No tax on capital gains from cryptocurrencies if you reside for at least 183 days per year on the island and participate in the Act 22 incentive program.
✅Panama (Central America): Panama currently has no specific laws for taxing cryptocurrencies, so there are no capital gains taxes for individuals.
✅Paraguay (South America): There are no specific laws for taxing cryptocurrencies. Residency can be obtained in less than 30 days.
✅British Virgin Islands (Caribbean): No tax on cryptocurrencies.
✅Cayman Islands (Caribbean): No income or capital gains tax on cryptocurrencies.
✅Bahamas (Caribbean): No income or capital gains tax on cryptocurrencies.
✅Barbados (Caribbean): No income or capital gains tax on cryptocurrencies. Residency obtainable in 14 days, following a medical examination and starting a business. Apart from the lifestyle (very different), very similar to Dubai in terms of taxes.
✅Saint Kitts and Nevis (Caribbean): No taxation on cryptocurrencies.
✅Bermuda (Atlantic): No taxation on cryptocurrencies.
✅New Zealand (Oceania): No taxation on cryptocurrencies for individuals. However, cryptocurrencies used as payment for goods and services are subject to VAT.
✅Cook Islands (Oceania): In addition to having no taxation, they are among the most banking and tax-secret places in the world.
✅Vanuatu (Pacific): No cryptocurrency tax.
✅Seychelles (Africa): No taxation on cryptocurrencies.
Taxes are obviously paid where you are resident. The change of residence usually occurs after 180 days abroad.
CRYPTO FRIENDLY COUNTRIES FOR CASHOUT (CRYPTO-FIAT)
There is no reason to sell your $BTC for fiatcurrency, however if you generate high income that allows you to live without regular jobs, you may need to sell crypto for fiat (unfortunately it is not yet possible to pay everything in crypto). These countries and banks are crypto friendly but obviously, to use them legally, you must be a resident in that country. Furthermore, it must always be noted that the funds must be legal (Swiss and Liechtenstein banks will carefully check customer data).
✦ Switzerland: especially the Zug region ("Crypto Valley"), is known for its acceptance of cryptocurrencies and clear regulations. Local banks like SEBA Bank and Sygnum Bank are crypto-friendly. Others to mention are: Maerki Baumann Bank and Dukas Copy Bank. A crypto-friendly IBAN account is Yuh.
✦ Germany: Fidor Bank is a bank known for accepting cryptocurrencies.
✦ Malta: Known as the "Blockchain Island" due to its crypto-friendly regulatory framework. Banks like BNF Bank and AgriBank are crypto-friendly.
✦ Gibraltar: Gibraltar International Bank is known for being crypto-friendly.
✦ Liechtenstein: A crypto-friendly bank is Bank Frick.
✦ Slovenia: Local banks are generally cooperative with crypto customers.
✦ Estonia: LHV Bank is a very crypto-friendly Estonian bank.
✦ Singapore: It is a major crypto-hub with clear and favorable regulations. Banks like DBS Bank are starting to offer cryptocurrency services and are very cooperative.
✦ United Arab Emirates: First Abu Dhabi Bank is a crypto friendly bank in Dubai. Although the Emirates are very crypto friendly and you can pay for everything in crypto (houses, properties, luxury cars), some banks for high cashout may freeze your account. The idea behind it is to get the economy going: buy high value properties and resell them.
✦ Bahamas: Deltec Bank, however it ended up under investigation for financial fraud and suspicious transactions
✦ Non-crypto friendly countries but with more open banks Monzo/Revolut/Halifax/Metro Bank/First Direct (UK), Fineco/Banca Sella (Italy), Ally Bank (USA).
HIGH BANKING AND FISCAL PRIVACY
Even though they are subject to KYC recognition and rules to ensure that the funds are not illicit, some nations renowned for their tax and banking privacy are: Switzerland, Monaco, Panama, Cook Islands (mentioned above), Bermuda, Antigua and Barbuda, Saints Kitts and Nevis.
CRYPTO ATM WITHOUT KYC
In some nations there are ATM that allow you to withdraw crypto in exchange for cash, without KYC. Obviously these are legal ATM, deriving from the right to privacy that some of these nations apply. Clearly the withdrawable amounts have daily/monthly limits, due to anti-money laundering and the fight against terrorism regulations.
Some nations with no KYC ATM: Bulgaria, Switzerland, Czech Republic, Spain, Mexico, Argentina, Hong Kong, Lebanon, Nigeria, USA (small amounts) and in general North America.
TRUST: OAPT
Offshore asset protection trusts (OAPT) are used to protect your assets (not just funds but also property). These structures are created in offshore jurisdictions that are very sensitive to privacy and protection of funds, the most well-known being the Cook Islands and Saints Kitts and Nevis, and provide protection against future creditors and potential existing creditors who fail to act within the statute of limitations. They are very private and highly secure. OAPT also offer other benefits, such as access to global wealth advisory services and international investments, and are often managed in tandem with a company owned by the trust. The trust resides in the same jurisdiction where it is located, often using foreign banks (Liechtenstein and Switzerland).
The main advantage of an OAPT lies in the specific legislation of the offshore jurisdiction used. For example, the Cook Islands trust legislation (established in 1984) contains a number of highly protective provisions. Foreign judgments are not recognised, so any creditor wishing to make a claim against a Cook Islands or Nevis trust must file proceedings in a local court. This is a very lengthy and expensive process for any creditor, especially in Nevis (established in 1994 and based on Anglo-Saxon law). The country has strict bank secrecy laws that make it difficult for creditors to access information about the trust or its beneficiaries. Trusts earn interest by depositing funds (for third party accounts) in banks. The funds cannot be seized because they belong to the trust and not to private clients. They also manage property and other valuable assets. Any litigation against the trust would require the creditor to fly to the country where the trust is located, the problem is that the local jurisdiction would most likely see the creditor lose (unless there is serious wrongdoing on the part of the client using the trust). What are the problems in litigating against Nevis trust?
-Great difficulty in reaching it (if you live in Europe)
-Nevis does not recognize foreign judgments
-Creditors must pay 100k deposit (and there is a high risk of being defeated)
Similar to the Cook Islands, Section 60 of the Ordinance states that a charging order is the only remedy that can be used by a creditor and that it cannot be associated with any punitive charges. Section 60(15) states that charging orders are only valid for three years.
In the event of a lawsuit, Section 60(4) simply allows you to surrender your share of the LLC ownership to your members, or exchange it for some other property, providing you with liquidity. Section 60(7) states that no foreign judgment will be taken into consideration in Nevis.
Belize also does not recognize foreign judgments and orders against an LLC. There are major disincentives to filing lawsuits in the country. In order to file a lawsuit in Belize, the plaintiff must first deposit with the Supreme Court of Belize the greater of the following two amounts:
a) $50,000
b) half the amount sought
So if someone comes to Belize claiming $40,000 of your assets, they will first have to deposit $50,000 with the court. If the claim is larger (say $10 million), the bond amount will be $5 million, a huge disincentive to even consider suing someone in Belize. Other well-known trusts are also present in the Cayman Islands, Bermuda, Guernsey, Jersey, Isle of Man, Panama, Hungary and Switzerland.
Tax laws are constantly evolving. I am not a tax expert so I am basing this on online research. If you have any corrections to make because you live in one of these countries, please let me know. I live in Italy (absolutely NOT crypto friendly) so I was thinking about where to move in the future for tax residency. Obviously you can do this, if your business is based exclusively on capital gains from cryptocurrencies. Don't think of moving to Dubai with 100k! If you also have experiences of large cashouts with crypto friendly banks, let me know in the comments!
Are you interested in ways to earn crypto bonus? Check it out here: Some Sites To Earn Crypto Bonus (Old & New)
