Cryptocurrency business in offshore zones: pros and cons
Cryptocurrency business in offshore zones is one of the options to maintain anonymity. This way is quite new but effective for legal tax optimization. Transactions with cryptocurrencies are supported and have fewer restrictions. It is possible to develop blockchain startups, open an exchange.
Features of opening a business
Before registering a cryptocurrency company in the offshore, it is advisable to become familiar with the concept of ICO. This is the initial offering of coins, which has a direct link to investments in cryptocurrency assets.
The main advantage of opening a cryptocurrency business offshore is the loyal attitude towards digital instruments. The climate for entrepreneurship is favorable, and the authorities are interested in obtaining additional investments.
The main advantages:
- Ensuring privacy and security of assets;
- Reduced tax costs;
- No currency controls;
- Support from the authorities and a good climate for investment.
Offshore companies are often used to create two international commercial companies - the first offshore is financed by bitcoins, and the second opens as a trading firm, which is invested by the first legal entity. It is possible to open a private foundation incorporation and IBC/LLC registration with wallet activation. Investors often open trusts for protection and maximum optimization of taxes.
Specifics of activity regulation
In Russia and Ukraine cryptocurrencies have no fixed status at the moment and operations with them are not regulated. Using an offshore for operations with such currencies, it is important for residents of the Russian Federation to keep in mind that bitcoin and other digital currencies are not considered foreign, according to the accounting, but are classified as financial investments using account 58.
It is important for residents of Ukraine to know that cryptocurrency does not relate to foreign currency and currency values, and it is not defined as a security. This definition does not apply to electronic means and does not refer to a monetary substitute. The procedure of tax collection when dealing with such currency is not fully spelled out. To clarify the specifics of cryptocurrency regulation in different countries, contact our experts at IT-OFFSHORE.
Top countries for a cryptocurrency company
In many jurisdictions it is possible to work in this direction without obtaining a special license. Offshore has a high level of anonymity, and most of the information is not disclosed. There is an opportunity to choose a corporate structure depending on the purpose of registration.
The government of the country has a positive attitude towards cryptocurrency. In 2018, several draft laws regarding the regulation of blockchain and cryptocurrencies were approved. Jurisdiction is in demand for registering an offshore company for crypto activities. Tax rates are low and it is possible to open an EU bank account.
It is relevant to open a cryptocurrency business in the canton of Zug, which is called the crypto-valley. The country is one of the first to develop laws for ICOs. Currency is perceived as foreign, and more traders are not taxed on capital gains.
The country has several FIZs - zones where there are benefits for businesses, including those related to cryptocurrencies. Entrepreneurs who have opened a cryptocurrency business in Georgia can later obtain citizenship.
The country offers low tax rates for businesses. Banks in the state can store customer funds in cryptocurrency and receive advice on conducting ICOs.
The state government supports cryptocurrency and is considering options for using blockchain technology in health care, the judicial system, etc. The country was the first to offer e-residency.