Ireland cryptocurrency opportunities in 2023
Since 2016, Healy Consultants Group assists multi-national Clients with Irish cryptocurrency business set up including i) Irish company registration and multi-currency corporate bank account opening, ii) Virtual Asset Service Provider (VASP) registration with the Central Bank of Ireland, if required iii) Value Added Tax (VAT) registration, iv) leasing physical office premises, v) hiring local staff including an AML officer and vi) compliance with AML/CFT obligations.
Irish citizens are some of Europe’s most enthusiastic cryptocurrency investors. Because Ireland adopted cryptocurrency technology and trading ahead of the global curve, it is an accepted way of life for cryptopreneurs. In addition, Ireland boasts world-class traditional financial institutions and a growing FinTech sector. However, evolving regulations around cryptocurrency in Ireland are making it more complex and costsly to trade.
Why is trading bitcoin in Ireland profitable?
The Irish cryptocurrency business set up strategy
To use an Irish entity for cryptocurrency, our multi-national Clients must:
- Register an Irish LLC.
- Register as a VASP with the Central Bank of Ireland (with the exception of proprietary trading businesses)
- Register for VAT.
- Lease physical office premises in Ireland.
- Hire local staff including an AML officer, if applicable.
- Comply with Irish AML/CFT obligations. Since April 2021, VASPs in Ireland are subject to Ireland’s AML/CFT framework and must register with the Central Bank of Ireland. VASPs are defined as providing i) exchange between virtual assets and fiat currencies, ii) exchange between one or more forms of virtual asset, iii) transfer of virtual assets, iv) custodian wallet provider and v) participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset or both.
- With your preferred Irish bank, open a multi-currency corporate bank account in US$ or Euros. See this page regarding our ‘guaranteed corporate bank account opening’ policy. If required, Healy Consultants Group can offer our multi-national Clients a professional passive nominee resident bank signatory.
- Secure multiple Irish cryptocurrency wallets, with the top four exchanges including; i) Bitcove ii) Bitpanda, iii) Coinbase and iv) Coinmama. Ensure any Irish exchange is registered as a VASP.
- Liquidate Irish cryptocurrency gains into the European corporate bank account. There is no limit on the number or value of daily transactions. For crypto transactions in European countries, 1 Bitcoin cash (BCH) = €423. The withdrawal fee is €0.30 using SEPA transfer.
- Over the following months, repatriate the Irish earnings to overseas bank accounts.
Challenges with Irish crypto trading
- Irish cryptocurrency companies are vulnerable to i) volatility of the industry, ii) regulatory crackdowns and iii) implementation challenges.
- Because of new anti-money laundering regulations, in early 2021, cryptocurrency traders can no longer do business anonymously in Ireland. All traders must i) register with the Central Bank and ii) conduct detailed due diligence on their customers. This means the costs and inconvenience of cryprocurrency trading will increase.
- There are few safety nets for crypto investors in Ireland because regulations are unclear and uncertain.
Tax rates for Irish cryptocurrency companies
- An Irish company generating profits on crypto asset transactions is taxable under the normal corporation tax rate of 12.5%.
- When a gain or loss arises at the time a crypto asset is disposed of it is then realised for capital gains tax purposes. Irish tax residents are liable for capital gains tax (currently 33%) on any gains arising after offsetting current and prior year capital losses.
- Passive income derived from the staking or lending of crypto assets is subject to income tax, rather than capital gains tax.
- Value added tax (VAT) on cryptocurrencies is applied as follows:
- Supplies of good/services – the taxable amount for VAT purposes will be the Euro value of the cryptocurrency at the time of supply.
- Financial Services – Bitcoin and other cryptocurrencies are deemed to be ‘negotiable instruments’ in Ireland and are exempt from VAT, where the company performing the exchange acts as the principal.
- Cryptocurrency Mining – the income received from mining activities is VAT exempt, as the activity does not constitute an economic activity for VAT purposes.
Strategies to legally minimise Irish tax
If properly structured, an Irish entity can eliminate or minimise i) corporation tax, ii) VAT and iii) capital gains tax. Strategies to consider include:
- Using an Irish LLP with no business activities in Ireland. To enjoy this benefit, entity criteria include i) the partners need to reside overseas, ii) no customers and suppliers in Ireland and iii) no employees and office premises in Ireland.
- An Irish LLC can be entirely Irish tax-free once certain conditions are met including i) no business within Ireland or with Irish customers, ii) no physical office space in Ireland, iii) no employees in Ireland and iv) no banking in Ireland.
- Secure exemption from Irish VAT registration. Iif a company’s international sales exceed 75% of their total Irish turnover, then all of their purchases and supplies, including imports, are zero-rated for Irish VAT.
- Qualifying Investor Alternative Investment Funds (QIAIFS) are also a tax-exempt form of i) income, ii) capital gains and iii) stamp duty taxes, if they are owned by non-tax residents and the fund only deals with real estate investments.
- See more information on our Ireland Accounting and Tax webpage here.
Our fees and timelines
Average engagement fees approximate US$53,600 as outlined in the attached pdf file:
Within 10 weeks, our multi-national Clients can expect to have an Irish LLC and multi-currency corporate bank account and exchange trading account. Refer to diagram below to view how engagement will advance:
With VASP license
- There are no capital controls on incoming funds transfers into Irish multi-currency corporate bank accounts.
- Investing in crypto assets in Ireland is inherently risky. Only sophisticated investors should engage in this trading activity. Healy Consultants Group does not recommend trading strategies.
- Through our business relationships with Irish banks, Healy Consultants Group will secure welcome emails from bank officers, inviting a formal multi-currency corporate bank account application from our Client. Our team will aggressively negotiate a travel exemption for the Irish LLC shareholders, directors and bank signatory.
- That being said, the ultimate power of approval of multi-currency corporate bank account applications rests with the Irish bank in-house legal and compliance department. Refer to this web page to understand our guaranteed multi-currency corporate bank account solutions.
- Within eight to ten weeks, Healy Consultants Group opens a quality crypto-friendly corporate bank account for our Client. To view different crypto-friendly banking solutions, view our dedicated map.
- Irish regulations are fluid and unpredictable. Multi-national Clients should expect unexpected obstacles. Healy Consultants Group experts will supply legal work-around solutions.
- For more information on alternative global crypto-friendly countries, visit this page.
From A to Z, Healy Consultants Group supplies our multi-national Clients with all the professional support they need to establish a cryptocurrency trading business in Ireland.