Opening offshore exchange companies has helped frequent traders eliminate a ton of headaches, and in extreme cases it’s the only way to really make it possible to file a correct US tax return. There has been an increase in using offshore vehicles to enhance benefits for cryptocurrency transactions, especially bitcoin. Many crypto traders set up offshore companies for the non-tax benefits as well. Some non-US crypto exchanges will not allow a US citizen or US legal entity to open an account, and many ICOs do not allow participation by US persons. Many crypto traders use offshore companies for the purpose of getting around these restrictions. Additionally, offshore companies can provide a privacy benefit as well. Now that we’ve learned that crypto trading isn’t as private as we once thought, many crypto traders find it nice to have another layer of anonymity between them and the crypto exchange. Particularly, company setup in crypto-friendly offshore jurisdictions is one of the most recommended options for cryptocurrency traders. Crypto traders can gain maximum advantages from setting up a company in an offshore jurisdiction. The following are key advantages in sentences above which are highlighted below: Efficient asset protection; A high level of beneficial owners’ confidentiality and separation of company assets from personal assets; Tax incentives: some states consider cryptocurrencies financial instruments but they do not consider them moneys; A simple procedure of setting up an account with payment systems including those domiciled with the EU; Several forms of company ownership available: the choice will depend on your business goals. Here’s what an offshore company does for a frequent crypto trader: It turns all of those line items on your tax return for each crypto-to-crypto exchange into one simple line item for income allocated to you from the offshore company. So, instead of having to attach an impossibly long statement to your return, you’ll simply report one item of income. Was this brief article helpful? Have you learned something? If yes, then click on the UPVOTE icon , SHARE, drop a COMMENT and FOLLOW my profile for more interesting contents on finance and cryptocurrency related issues. For further information you can as well reach out to me through my inbox or link attached to my profile. Thank you for reading.
If you intend to enter the cryptocurrency industry and start a cryptocurrency or blockchain based business, it is important to understand how the jurisdiction you are in can impact the success or failure of your business as well as the scope of business you are allowed to do, for example you can start with https://www.offshorecorptalk.com/, it is a great resource where you can find everything you need.
