Setting up crypto companies abroad

If you were unable or missed our conference, we have prepared a short article summarizing the essential information presented in the last panel on doing business with cryptoassets in various foreign jurisdictions. Miloslav Makovini (Incorporatas, United Arab Emirates), Peter Howitt (Ramparts, Gibraltar), Petros Rialas (Totalserve, Cyprus) and Michal Hanych (smpl_, Czech Republic) shared their experiences. The discussion was moderated by Peter Varga from Highgate Group.

But if you want to know even more – including detailed insights and specific advice – we recommend you watch the full conference recording:

Key aspects of doing business in different jurisdictions

United Arab Emirates (UAE)

Dubai and the UAE in general is a very attractive area for crypto enthusiasts mainly because of taxation, although the UAE has introduced a corporate income tax, however this has large legal loopholes where it can move when set up well, ultimately leading to non-taxation. And of course individuals do not tax income as there is no personal income tax in the UAE.

The cost of setting up a crypto company in the UAE ranges from $7,000 to $20,000, for funds over $100,000.

Czech Republic

In the Czech Republic, there have been no significant legislative changes in the area of cryptoassets. Nevertheless, smpl_ experts know how to set up structures with cryptos where taxation is close to zero. Mostly, for basic structures, schemes of contribution of cryptos to the share capital or gifting between close persons, etc. are used. However, what can be very interesting is the use of trusts and foundations due to their great flexibility.

Establishing a classic crypto LLC is around 50 000 CZK.

In the meantime, however, new legislation has been adopted. Peter Varga also spoke about the new Czech legislation on crypt taxation in a webinar where he outlined the new Czech legislation adopted, which included the introduction of the time test.

Cyprus

Cyprus is also a popular location for crypto companies, mainly due to its attractive tax benefits and stable legal system. For example, occasional sales of cryptos can benefit from tax exemptions. In addition to favourable tax conditions, Cyprus also offers a structure and regulations that support crypto business.

The cost of setting up a crypto company is from EUR 3 000.

Gibraltar

Gibraltar, although it has left the EU, remains a regulated jurisdiction with favourable conditions for crypto companies. Gibraltar has the most attractive funds, where individual fund structures can be set up very reliably, but there is a lot of administration involved. However, what Peter Howitt sees as key in cases where, for example, Slovak entrepreneurs want to set up structures in Gibraltar is experienced advisers on both sides. Any company must have a defensible structure and a real presence. However, Gibraltar also stands out because they apply the territorial principle of taxation, but this does not apply to regulated entities.

Although Gibraltar has a 15% corporation tax, capital gains are not taxed.

As for the cost of setting up a crypto company, a private fund (unregulated) with up to 50 investors costs €12,500. Such an investment fund already starts from €15,000 plus an annual fee.

Rationalising the move abroad

In conclusion, we feel it necessary to stress that, as experts, we often point out the necessity of a thorough rationalisation of the move abroad. If individual structures are not thoughtfully optimised and lack economic logic, this can lead to unintended consequences. The tax authorities are uncompromising and have no room for leniency in the absence of a clear economic rationale. Peter Varga spoke about the possibilities to rationalise such transfers either at the conference or in more detail in this webinar.

It is therefore crucial to approach these processes with discretion, professional precision and thorough documentation to ensure not only efficiency but also legal certainty. At Highgate Group, we can set up these structures in a way that meets all the requirements, is robust to controls and at the same time enables efficient operation in an international environment.

If you are interested in this topic, please do not hesitate to contact us:

• Peter Varga, e-mail: peter.varga@highgate.sk
• Roman Baranec, e-mail: roman.baranec@highgate.sk

For more on the legal, tax and accounting regulation of cryptoassets, see this section of our website: crypto and legal and tax structures.

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Alternatively, you can address your specific questions in a consultation with our partner Peter Varga, who specializes in financial regulation (including cryptoassets) and tax law. You can book a consultation here: