Professional Trading (Futures/FX/Crypto) through own Company

Discussion in 'Taxes and Accounting' started by Thous@nd-lot-Trader, Jul 25, 2018.

  1. Hi,
    imagine you are trading for a living and are a tax resident of a country which does not have the CFC Rules ( ) and which does not tax dividends received from a company abroad.

    Mostly Futures/FX/Options/Cryptos are traded actively ( so it would be considered as income due to high volume and not capital gains anymore; thats the reason to use a own company to trade with).

    Sure you could open a Belize/Seychelles company, but the problem is going to be that you most likely will not get a proper bank or brokerage account with firms like InteractiveBrokers.

    Also, the more offshore you go, the more problematic it will be to get the money properly out in the form of dividends.

    Therefore I thought about a Cyprus Limited Company.
    The tax lawyer I spoke to confirmed that stock trading profits, even though if done through DayTrading, are 0% tax on a corporate level.
    Other trading profits are taxed 12.5% on a corporate level.
    They seem not to have a ruling yet how they consider crypto yet.
    Of course, only the company should be on Cyprus but banks/brokers can be used abroad.
    IB for example accepts Cyprus Companies as Clients and or can be used for corporate bank accounts.

    Does anyone of you have good experience with trading professionally (only own money, no clients money) through a own Company?

    Thank you and have a good Day,
  2. MarkBrown


    i know of a group who tried that, they not only paid back taxes they also paid huge attorney bills. upside it took years to get it to trial so i would go another route.
  3. Hello Mark,
    thank you for your message.

    Could you please elaborate if the group is by chance US based or so? US is for sure problematic to have a structure like that.

    For me there is legally absolutely no issue to have a foreign company as I became tax resident in Malta where you can receive dividends completely tax-free if not remitted to Malta.

    I was just wondering if someone has experience with a Cyprus or another jurisdiction company which does their prop trading?
    MarkBrown likes this.
  4. MarkBrown


    US based yes. Then your only other concern is the security of the Cyprus firm you do business with. I would be very nervous and consider it as risky as Greece.
  5. Hello Mark,
    I would only create a own company there but use banks, brokers, all major assets outside of Cyprus..
    Cyprus is still EU and this also helps for holding structures
    MarkBrown likes this.