Tax Optimization Part 2

The greater the value of your cryptocurrency wallet, the potentially greater the tax problems but also the greater the opportunities to solve them. As a general rule of thumb, the less developed and the more foreign investment-hungry country, the easier it is to avoid or minimize taxes.

Many of these countries are also very pleasant places to live. Thailand, for instance, regularly changes its mind on crypto taxes, once mentioning a 20% tax and another time saying there will be no taxes at all by the end of 2023. All this changes little, given that more than half of Thais do not even have a Tax Identification Number. Those who do, report their income on the self-assessment basis. So who would care about a foreigner on a longterm tourist, marriage or business visa?

If you are not a citizen of the European Union but would like to be able to live there legally, many countries offer a special type of visa. For example, if you invest between €280,000 and €500,000 in Portugal, you can apply for the so-called Golden Visa which can be valid for a maximum of five years. At the end of this period, you qualify for Portuguese citizenship.

By investing in the Caribbean, you can obtain citizenship of Grenada, Antigua and Barbuda, Dominica, St Kitts and Nevis, St Lucia and others. The required level of investment starts from as little as $100,000.

For less than $50,000 you can become a tax resident of Paraguay where there is no tax on income generated from investments outside the country. After three years of being a resident, you can apply for a Paraguayan passport without necessarily living there all the time. Being a resident of the country allows you to live in Paraguay, Argentina, Brazil, Chile and Uruguay.

With another country’s tax residency or passport, you can open bank accounts with the reassurance that your home country’s tax authorities will not pursue you. Acting within the crypto community, I have met tax residents of Uruguay with bank accounts in the Caribbean and living in Indonesia. Many of them also have multiple tax residences and several passports. As you can see, the options available are only limited by your needs, your imagination and the amount of money you have.

Tax evasion is of course a criminal offence mentioned in numerous, if not all legal codes. However, this does not change the fact that the so-called Panama Papers scandal a few years ago disclosed that at least five heads of state and many government officials, their families, friends and associates from more than 40 countries were using similar arrangements to optimize their taxes.

Dozens of celebrities such as Bono, Nicolas Cage and Pamela Anderson have also tried to evade tax payment and have suffered different consequences. Many of the 26 billionaires, including Elon Musk and Jeff Bezos, have paid only a fraction of the taxes compared to the average American. Although, this is because their income comes from various investments rather than a salary like in the case of the most of us. Could it be that tax optimization is only illegal or unethical when it affects us average and ordinary citizens?

Read more in my book ‘Second Crypto Revolution: Build Generational Wealth With Richard Heart’s Crypto Ecosystem’.

‘Second Crypto Revolution’ is now also available as an audiobook! Click here to listen!

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