Best Country for Trading (Tax efficiency)

@i am nobody : Correct, if you spend three months in Monaco then you're a resident for tax purposes however if you have a home (either rent or ownership) in another country and you spend more than 120 days there and you're using that home like it's your primary home, for instance you're traveling from there, etc. then they can claim that the center of your vital interests are in that country so you're a resident in that country also.

Note that you can be resident in two or more countries easily. Yes, the double tax treaties applies but there's no personal income tax in Monaco so you would have to pay in France. If you want to live like this then it's cheaper to setup a tax-residence in the Bahamas, spend 1 day every 180 days there and live in no less than four other countries during the year.
 
Johnny Debb lived for many years in France with Vanessa Paradis and their children. But he NEVER paid income taxes in France. He had a house there and stayed there more than 120 days a year. France asked Debb to become French citizen or to move his domicile to France. He refused because than he should pay taxes.

If you have your domicile in Monaco as well as your bank accounts, phone, car....and your children live outside of France and you are a citizen from another country, I don't see how France can tax you. Even if you stay more than 120 days there. In Schengen people are free to go anywhere. The only limit is that you can only stay for 3 months every 6 months. For longer stays you must apply. So you can go without any problem 6 months a year to France.
 
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dw31583 said:
@i am nobody : Btw, I'm curious to your opinion about the following structure. I was thinking about this problem, about how to be able to claim that the trading income is foreign sourced.

  1. Create a trust in a zero tax jurisdiction like the Cayman Islands. You can be the settlor and the beneficiary as well but not the trustee.
  2. The trustee should be a reputable bank or trust management company (it's up to you).
  3. Setup a company in a typical zero tax jurisdiction like the Bahamas and the trust will be the shareholder and the director also, so the trustee will be the controlling person.
  4. Create a demo account with a broker you like with fake name, fake phone number, fake address, fake e-mail address.
  5. Open an account with a trade copy company that lets you copy traders with demo accounts (Zulutrade for instance but I don't know which lets you copy traders with demo accounts).
  6. When you create the trust, you should properly draft the trust deed and include that the trustee has to open a brokerage account with another broker of your choice and he/she has to open an account with that trade copy company and he/she must copy that specific trader only.
  7. Register for a VPN service and connect to your broker via VPN connection to hide your location and "trade" with your demo account.
  8. According to the trust deed the trustee is obligated to pay either a fixed amount to you each month or a percentage of the profits.
It's still not bullet-proof but it's something I consider fairly acceptable and almost impossible to argue with since you're not the director, you're not the signature on the bank and brokerage accounts and I think they won't be able to reveal the owner of the demo account.

The money you receive from the trust is taxable of course but not the entire money you make. For instance if you make $50k per month and the trustee pays you 20% then only the $10k you receive will be taxable in your country of residence.

Comments?
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I've done that, been there (BVI). Closed down the whole construction more than 15 years ago. I go and live in a low tax area and trade from there. Simple and easy. And I will travel around Europe when I want and how long I want. Nobody ever asked me in any Schengen country how long I was there, or if I had a job and where I did pay taxes. they even never checked where I really lived.
Really move to the low taxe area is the only viable solution. Constructions cost a lot of money and have a lot of risks too. Especially if it is about "above the average" amounts of money.
 
@i am nobody : I can't agree with you.

Try the following: rent an apartment in London, stay there 120+ days and see what happens. You'll have three ties with the UK thus you'll be a resident.

Before you'd argue with me: http://www.pwc.com/en_JG/jg/publications/the-statutory-residence-test.pdf

I think you misunderstand the free movement rights. Yes, you can travel to any EU country but this doesn't mean that you won't become a resident if either you spend a lots of days there or the center of your vital interests is in that country. Your tax-residence is not your choice.

The rules has changed a lot during the last couple of years. If you spend 3 months in Monaco and 6 in France and you have a home in France then you'll be a French resident. I don't see why you wouldn't be.

Just because you say that you have bank accounts in Monaco, phone, etc. this doesn't mean that the center of your vital interests is in Monaco :D

There's another important thing you might not know. You must be able to show that you've spent more days in one single country other than France. If you can, then you're good to go. But if you spend 6 months in France, 3 in Monaco and 3 in Italy then you'll be a French resident according to my KPMG advisor.

If you spend 3 months in Monaco, 3 in France, 3 in Italy and 3 in the UK for instance then you're fine.

This doesn't apply if you don't own / rent a home. So if you spend 180 days in France, UK, etc. in hotels then it's ok.
 
No one mentioned but Brazil is a tax haven for traders of sorts. If you have an offshore company you only pay tax on the amounts that were distributed from the company to you (No CFC crap, top rate is 27.5%). The gains can compound tax free. Dilma tried to close that loophope 2 years ago but Congress shut her down. You are not supposed to trade Brazilian securities with that company though
 
@dw31583

UK regulations are irrelevant for me. So your link has no value for me.


Income tax in France is due if one of the following conditions is meet:

  1. permanently resident in France
  2. primary residence in France (more than 6 months per year)
  3. practice a professional activity in France (can be employed as a free-lancer or through a private company registered in France
  4. the center of economic interest lies in France.

You wrote:Just because you say that you have bank accounts in Monaco, phone, etc. this doesn't mean that the center of your vital interests is in Monaco. Reality is just the opposite:Checks that are used in practice: the use of the debit card and bill of the mobile phone. They will be monegask, payments in France will be done in cash so cannot be traced. I know somebody in Monaco personally (a famous pilot) who was checked in this way by his mobile phone, so this confirms my opinion.

So, if you have a french bankaccount or french mobile phone provider you pay taxes in France. But this means also that if you proof that you have NO french bankaccount or NO french mobile phone provider you pay NO taxes in France. Logic, no? The same check should work in both directions.

Remarks:
  1. The French laws does not speak about providing proof of residing longer in another country. They only speak about 6 months in France.
  2. My children don't live in France too, so that argument they cannot use too. Au contraire: It proofs that my family intrest is not in France.
  3. Trading from Monaco and go there every day if you trade. A drive of maybe 10 km. Never trade from France. So no activity in France whatsover.
  4. Domicile, phone, bankcard NOT in France, trading accounts in the US. So NOTHING of economical intrest in France.
I can additionally use double tax treaty too in my specific situation, but that's another discussion.
 
@i am nobody: If you don't trade in France then it's fine. Furthermore the fact that you're going to use cash shows that you're afraid of something. I'm looking for a 100% legal solution. This isn't that.

There's no such a thing as domicile in France. You won't be able to use this btw. Only English law countries uses the domicile thing like UK, US, AU, NZ, SG, CA, etc.

On top of that there's a 33% corporate tax in Monaco that I don't really like. Of course you can trade on your own name but I don't want that.
 
dw31583 said:
@i am nobody: If you don't trade in France then it's fine. Furthermore the fact that you're going to use cash shows that you're afraid of something. I'm looking for a 100% legal solution. This isn't that.
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The only reason I would use cash is to prevent France to use that to tax me; I had a similar experience in another country in past. They taxed out of frustration on a discutable basis. It took me years and a lot of $$$$$ to fight this taxation. I won after many years but learned from this incident. Taxation can happen on any basis even a ridiculous one, it is up to you to fight it then. And even if you win, you lose. Lawyers can be very expensive. That's why I also want a fiscal ruling before going anywhere. Only then you are save for the period that the ruling is valid. And then you don't need lawyers.

You wrote:If you don't trade in France then it's fine.
I don't agree. If they decide that for whatever reason you are resident (and they can use their imagination without any limits), then you have probably to declare your worldwide income, so also Monaco. You are only sure with a fiscal ruling, all the rest is a potential risk.
 
dw31583 said:
@Daal : You're wrong. Check my "study" on the 34th page, especially the important notes section.
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No, you are wrong because I have consulted with tax attorneys of that country. They call it the cash flow regime, you only pay taxes from the cash flow that comes from offshore company. That is, unless the owner of the company is a brazilian company. In the case there is a profit repatriation schedule over 9 years or so.
 
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