Bitcoin Forum

Someone owns cryptocurencies since long time ago, been exchanging them one to another via shapeshift and other anonymous exanges, never sold them for fiat yet. Value of portfolio dramatically increased.  At one day he decides to move some part of capital into other assets, like real estate, stocks, or create a business. He is free to move anywhere around the world and/or change  tax residency.

What would be the best strategy for him?

PS. He is libertarian minded and wishes to prevent terrorism financing (invest in state violence via taxation scheme).

Why does he need to move anywhere? I don't get it because if he is willing to diversofy his investmentnt portfolio investing on other assets on multiple countries is a bad idea because you will be taxed in multiple places. All earnings whether it is foreign or domestic will be both taxes by your local government authority and at the same time be taxed by another country. If I were you I'll only diversofy my portfolio with its operations on that country.

I'd think about simply moving to a country with low income tax. If that person you're talking about has a a lot of money, enough to make moving to a distant country worth the trouble, think about the Cayman Islands or Monaco. You wouldn't be subject to any tax, although it's possible all the paperwork required for residency would cost you. If that happened to be hard, there are countries with very low income tax and cheap everything, like Bulgaria. With $1000 a month you can live like a king there and income tax is just 10%.

Yes, there are many countries and places which offered many incentives for people who are looking for tax haven and possible retirement place for good. and many countries are even promoting their programs via agents. I have seen many advertisements to this effect online. It is just a matter of looking for them using Google and then comparing what can be the best choice according to someone's situation and financial capacity.

This is actually a good option since moving to another location or a new country is not for everybody as it can mean some stress and one must be prepared to do so. I am sure that the best way to move forward is to see someone who is specializing in tax matters and also legal matters. Securing a professional opinion can broaden one's choices in making a decision and can help someone see a better perspective of his situation. This is, of course, aside from researching and using Google where people might have already shared their experience and insights.

I think OP's reason for moving it out is partially explained in his last sentence: he is a libertarian and does not wish to contribute to state taxation, which he believes is helping to sponsor violence (war?). We can assume then that he is seeking the best alternate jurisdiction to do something like this.

The bad news is that OP may still have to cough up some fiat and get taxed on that if you want to move and change your tax residency - unless you already have an initial capital. Papers to legitimise your move cost money. Unless you find a lawyer willing to settle everything for you and get paid in crypto (all the same, the lawyer will pay tax on your behalf in that case). Initial tax unavoidable I feel.

The good news? Plenty of tax jurisdictions that would welcome your investments. Luxembourg comes to mind and is Bitcoin friendly. Brunei Darussalam is even better for 0 tax, is neither pro nor anti crypto, but almost impossible to gain citizenship if that's also a concern.

This is fortunately, untrue.

If there is a tax treaty between countries, you get taxed once.

How do we open a personal account with Luxembourg or Brunei? I know some jurisdiction doesn't need you to live or work there to qualify for one.

Do we really need to be a residence to open an account there?

I'm not sure about the two countries that I've mentioned, but usually you need at least a local address to be able to open a bank account. In Germany for instance you must be a resident to do it or have a business registered there.

Also, if you want to avoid taxes, you will have to be a resident, simply because most countries require their nationals to pay taxes regardless of where their bank accounts are located. To be able to file your tax reports elsewhere you need to either run your own business or be employed in another country, or (much more difficult) obtain a citizenship.

I am not a tax person, but what if I have a company that operates in a tax free location, and I am depositing my bitcoin sales money into this company, doesn't that work ?

Withdraw enough to pay income tax on & buy property in a chosen country with low/no income tax, one which gives residency once property of a certain dollar amount has been purchased. Move there, be a resident. Now you can cash out all you want without pay much/any on it.

That's all there is... if you want to stay in the state which you live now pay income tax on it, that simple. Don't try to launder it or whatever, the stress will ruin your retirement.

I would suggest you move to Africa since you don't have any issue moving anywhere because in Africa the process of entry is not as difficult as European countries or advanced countries, cost of living is relatively low, and aside thst, the financial system is not fully regulated like that of the advanced world what you need is just a net of trust worthy guys to make the exchange to the fiat of the country you looking to go, and you are good.

Come to Germany or Austria, we pay an awful lot of taxes but not for Bitcoin holdings that have been kept for longer than a year ;)

Bad news is you'd have to relocate and obtain citizenship.

The good news is the beer is good.

The beer is really good.  Gutmann!  Ich bin ein Gutmann!  er, jelly donut, I mean.

Seriously though, all this guessing about tax regimes is silly.  Try contacting Simon of Sovereign Man if you are serious and have real assets:

SovereignMan.com

Yes, If your company resides abroad all your corporate taxes are being paid there. That's the main reason why people register companies abroad.
Nobody knows how many coins you have, so you can as well declare them as sold by your company in tax haven.

Anybody can move anywhere so far he is allowed entry and if you are from Europe, then I don't see any difficulty in movement its only people in either Middle East or Africa can have some difficulty if they  intend to move to Europe or America. But much more analysis should be done in terms of security and political tension of the environment and also be willing to contributed to the development of the community. With all this, you are sure to have good reception especially in places like Africa.

It can actually be hard to prove that you have owned the coins for more than a year. The "Finanzamt" (the German
equivalent to the IRS) may want to know where you got all your bitcoins initially. With the disappearance of
several major exchanges like BTC-E or Mtgox not every user still has a way to prove where they bought
their BTC. If you obtained your Bitcoins from even more questionable places than these extinct exchanges
this could get even more difficult.

Do you have any workaround for this problem?

Of course you have an easy time, if you bought your BTC on a still existing exchange and can therefore
easily prove that you hold them for more than a year.

That's good thinking. How does the Finanzamat actually track ownership period? Has anyone been taxed already if you own less than a year? Or they are really trying to manage the big whales? aka exchanges and people with 10000 BTCs? I'd expect it to be pretty pretty hard to track a someone with 10 BTCs.

Not sure how legal this is for you but you could always cash out smaller amounts through a trust somewhere else, localbitcoins, use that money to buy everything you need.

I would suggest try nothern europe
like estonia, finland and sweden