Best Country for Trading (Tax efficiency)

The system still makes you liable for taxes, but only on the distributed profit. You can only postpone taxes, in effect this is similar to the soros structure where he was able to defer taxes for a long time by incorporating in the Netherland antilles/Curacao. Right under the nose of the IRS, we are talking billions here
 
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The US, UK, AU, NZ and CA are entirely different countries because they take their laws really seriously. In other countries what may be legal for a politician is strictly illegal for everyone else.

The loophole that Mr. Soros were using is a "bit" different then what you're saying about Brazil. That loophole allowed hedge fund managers whose funds were widely held (had several investors in the fund and he had a minority stake only) to defer tax payments on the performance fees that the manager received. His original capital that he injected into the fund was fully taxable throughout the years.

There are a couple of billionaires in Brazil. Why are they not using foreign entities? There was Eike Batista with a large fortune. Why he was not using a foreign entity to avoid taxes altogether?

Seriously, I got what you're trying to say but it's still unbelievable. My income is fairly big compared to the average Joe therefore I'm a bit hesitant to try this out. I'd be seriously worried what if one day a politician wakes up and he gets envy of my lifestyle and tells the tax authorities to check if my foreign companies has any local sourced income and guess what, I'd fail on the tests as trading income is locally sourced, always.

Btw you put the bug in the ear so I'll ask a Brazilian advisor about this.
 
Maybe it is better to start from the logical starting point. Tell first how much money you make and we can provide the correct answer. That's essential to provide the correct answer. Amount of money defines what is financially affordable and/or optimal.
Proceeding this way will reduce the "problem" of taxes to almost zero as probably less than 1% of ET members have a real problem with taxes. Most have a problem with making the necessary money to cause a tax problem.
 
Mtrader said:
Maybe it is better to start from the logical starting point. Tell first how much money you make and we can provide the correct answer. That's essential to provide the correct answer. Amount of money defines what is financially affordable and/or optimal.
Proceeding this way will reduce the "problem" of taxes to almost zero as probably less than 1% of ET members have a real problem with taxes. Most have a problem with making the necessary money to cause a tax problem.
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8 figure, before tax with leveraged fx trading. I rarely hold positions for a long time. 90% of my trades are intraday.

Countries that I've tried:

I have tried these jurisdictions with an LLC or with trading on my name (that I don't like)
  • Netherlands: I've been told to forget about it as I'd be paying the regular 50%+ income tax
  • Switzerland: The lump sum tax is not available for fx traders, I have contacted a local advisor and he contacted the tax authorities in Geneva and they were not willing to sign the contract with me
  • Malta, UK, Ireland and Cyprus: the non domiciled status is effectively useless for me as my trading income is locally sourced thus taxable
  • Singapore, Hong Kong, Malaysia, Panama: advisors in these four countries were a bit more relaxed than the previous ones (non dom status) although they couldn't confirm that I won't pay taxes because the authorities have the right to say that my trading activity generates local sourced income and I must pay taxes there
  • Portugal, Belgium and Spain: there is a tax incentive for foreigners but I'd be paying taxes on my trading income just like in the Netherlands or in the UK
The countries which could work according to my advisor: Cayman Islands, Bahamas, Monaco and Dubai.

Estonia is attractive also as it has a 0% corporate tax on undistributed profits and only 20% on the distribution but the EU and the UK is a pain in the ass because of the publicly accessible registry of the beneficial owner of the companies. The EU's is not live yet but it will be in 2017 or 2018. I was trying to solve this by relocating to Estonia and incorporating an Ltd in the BVI and paying the 20% tax upon distribution just like any local company but because of the silly CFC rules they would require me to pay the 20% tax regardless of distribution.

This is where I'm now.
 
dw31583 said:
The countries which could work according to my advisor: Cayman Islands, Bahamas, Monaco and Dubai.
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So why making so much fuss? You have your solution.

I know a few very rich people. What they all have in common is that they NEVER speak about their fortune nor about the money they make. Especially not on the internet where you never know to whom you are speaking. Only dreamers speak about these things.

I was for decades in Forex and never meet a private trader making 8 figures a year. I knew one who lost 8 figures a year...
If you would be making 8 figures you would already be in a low taxation area by now because it would hugely improve the net result of your trading.

I found at least 2 very big mistakes in what you wrote about countries and their taxation rules. So I doubt you really took advice from professionals.
 
Mtrader said:
So why making so much fuss? You have your solution.

I know a few very rich people. What they all have in common is that they NEVER speak about their fortune nor about the money they make. Especially not on the internet where you never know to whom you are speaking. Only dreamers speak about these things.

I was for decades in Forex and never meet a private trader making 8 figures a year. I knew one who lost 8 figures a year...
If you would be making 8 figures you would already be in a low taxation area by now because it would hugely improve the net result of your trading.

I found at least 2 very big mistakes in what you wrote about countries and their taxation rules. So I doubt you really took advice from professionals.
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You're correct. I never speak about the money I make. This is the internet, you don't know me nor my name or anything about me :)

Interesting, there are people who make way more than me. Take a look at the Japanese guy's performance who made $120 million in 2015.

I'm already in a low tax country but it's not tax-free.

Nice, could you please share those "mistakes"?
 
dw31583 said:
The US, UK, AU, NZ and CA are entirely different countries because they take their laws really seriously. In other countries what may be legal for a politician is strictly illegal for everyone else.

The loophole that Mr. Soros were using is a "bit" different then what you're saying about Brazil. That loophole allowed hedge fund managers whose funds were widely held (had several investors in the fund and he had a minority stake only) to defer tax payments on the performance fees that the manager received. His original capital that he injected into the fund was fully taxable throughout the years.

There are a couple of billionaires in Brazil. Why are they not using foreign entities? There was Eike Batista with a large fortune. Why he was not using a foreign entity to avoid taxes altogether?

Seriously, I got what you're trying to say but it's still unbelievable. My income is fairly big compared to the average Joe therefore I'm a bit hesitant to try this out. I'd be seriously worried what if one day a politician wakes up and he gets envy of my lifestyle and tells the tax authorities to check if my foreign companies has any local sourced income and guess what, I'd fail on the tests as trading income is locally sourced, always.

Btw you put the bug in the ear so I'll ask a Brazilian advisor about this.
More...
Well, Eike Bastista did. He controlled a structure with 22 entities according to the Panama Papers
http://fernandorodrigues.blogosfera...strutura-com-22-offshores-da-mossack-fonseca/
He also held a number of Nevada entities as well he is reported to have wired about $300m to the Cayman Islands before he run into legal trouble. That money was moved around different entities and has dissapeared. Legally its not his anymore

This guy has yatches, sports cars and never missed a chance to go to the media and brag about how rich he is. He was worth several billion dollars once. The only tax issue that I know he run into was that he supposedly owe about $50m in non paid capital gains taxes (a mere 15% rate)
 
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Daal said:
Well, Eike Bastista did. He controlled a structure with 22 entities according to the Panama Papers
http://fernandorodrigues.blogosfera...strutura-com-22-offshores-da-mossack-fonseca/
He also held a number of Nevada entities as well he is reported to have wired about $300m to the Cayman Islands before he run into legal trouble. That money was moved around different entities and has dissapeared. Legally its not his anymore

This guy has yatches, sports cars and never missed a chance to go to the media and brag about how rich he is. He was worth several billion dollars once. The only tax issue that I know he run into was that he supposedly owe about $50m in non paid capital gains taxes (a mere 15% rate)
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Hmm, interesting. I'll take a closer look at Brazil in a few weeks.
Btw I was thinking about this and to make myself comfortable I could make this safer by creating a discretionary trust which would own an Ltd in the BVI. According to the trust deed I would be the director as long as I live thus I could manage (trade) the company but legally I would not be the owner anymore thus it would be an additional layer as it would separate me from the company. This would make the company a resident in most countries but this may work in Brazil or Estonia.
 
dw31583 said:
Hmm, interesting. I'll take a closer look at Brazil in a few weeks.
Btw I was thinking about this and to make myself comfortable I could make this safer by creating a discretionary trust which would own an Ltd in the BVI. According to the trust deed I would be the director as long as I live thus I could manage (trade) the company but legally I would not be the owner anymore thus it would be an additional layer as it would separate me from the company. This would make the company a resident in most countries but this may work in Brazil or Estonia.
More...
The trust is probably a bad idea. The former leader of the lower house (eduardo cunha, the same guy who blocked the 2014 loophole) has run into problems because he used trusts to hide offshore funds. It appears that the government will 'look through' trusts after this scandal. It could be different with foundations but im not entirely sure, its more of a grey area. but with trusts, its more clear because of the scandal.
 
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