Best Country for Trading (Tax efficiency)

[Nab]

As a potential tax refugee of EU origin, just do some research by yourself ...

Step1:

Google for a list of countries which do not tax foreign capital gains, or have a tax rate you can live with.

Step2:

Check what the (non)-residency requirements are.

Usually this is the problem. For instance, tax like some Asian countries are quite convenient for foreigners. However, getting a long term visa (e.g. Japan, China, ...) is not easy. But there are ways ... (as higher your net-worth and/or your degree/professional skills, as easier it gets)

Step3:

Visit the so found tax heaven of your choice for a couple of months as a tourist.

Step4:

If you like it, move ... if not, try out the next on the list ...

 

[cmb]

guys,

all of this talkm and nobody has really given a firm answer regarding US passport holders.

not sure if this would work, but. Lets keep an open mind before blurting out US passports need to pay taxes worldwide!

This strategy is illegal.

1 set up a residence and live in either Panama, Belize, Uruguay*, Paraguay*.

2. for example, if you set up a residence in Panama, now set up a business in Belize. Now open a trading account in the name of your belize corporation and bank account.

3. wire your profits from Belize to your bank account in your residence.

4. set up another corporation in your resident country with a bank account.

after wiring your money through 2 countries and 2 corporations in which the US has no jurisdiction over, what are the risks of being caught?


obviously you have a lawyer which can fine tune the strategy,

thats my 2 cents, lol the markets are closed today, this is where I wandered off too

 

[d08]

The risk might be small but it's still there, the question is how well can you sleep knowing the risk can realize.

 

[symbian11]

It seems that Gibraltar would be the best option.
Here is the official information from the inland revenue department:

Question:
Is trading (FOREX) and earned interest tax exempt or are the regular personal income tax brackets applied?

Answer:
As a general principle, I can confirm that passive income earned by a person is not taxable under the Act unless it is a trading receipt from a licensed banking/money lending activity.

As a general principle, I can also confirm that income from FOREX trading is not taxable if it is earned on an “own account” basis only and provided that it is not a trade activity carried on behalf of others which is taxable.

 

[d08]

Quote from symbian11:

It seems that Gibraltar would be the best option.

You must be making a killing then. If you consider living expenses, Gibraltar is not a great choice. It's also a very difficult place due to the UK/Spain disputes over there.

 

[symbian11]

Quote from d08:

You must be making a killing then. If you consider living expenses, Gibraltar is not a great choice. It's also a very difficult place due to the UK/Spain disputes over there.

It's not that bad. You can expect rent to be about 2x the price compared to other cities in Spain (e.g. Barcelona). For everything else you can just cross the border to get it.

And here is also the response I got from Malta. They did not specifically answer my forex question, but since I am making my money with carrytrades Malta seems to be out:

Interest earned is not tax exempt and has to be declared in the income tax return and taxed with the normal arising tax rates.

 

[H2O]

Quote from d08:

You must be making a killing then. If you consider living expenses, Gibraltar is not a great choice. It's also a very difficult place due to the UK/Spain disputes over there.

Gib is not overly expensive compared to the rest of Europe.... (I've been living here for for a number of years now, and yes I moved here to trade)

Rent for a 2 bed place starts ~1k, 1 bed ~£750 (I'm talking 'acceptable' places). Of course you can get much more expensive as well....
For your day-to-day expenses you can either take the convenient (local) option which is slightly more expensive than Spain, or cross the border and shop / go out in Spain...

Many of us also have a place in Spain to enjoy the weekends..

 

[symbian11]

Quote from H2O:

Gib is not overly expensive compared to the rest of Europe.... (I've been living here for for a number of years now, and yes I moved here to trade)

Rent for a 2 bed place starts ~1k, 1 bed ~£750 (I'm talking 'acceptable' places). Of course you can get much more expensive as well....
For your day-to-day expenses you can either take the convenient (local) option which is slightly more expensive than Spain, or cross the border and shop / go out in Spain...

Many of us also have a place in Spain to enjoy the weekends..

Hi H2O,

Good to have you with first hand experience. How hard was it to get a residence permit (I am a EU citizen so it should be easy >>?)
Do you have to file a tax report? What do you declare?
In some contries it seems that they try to tax you with income tax rather than CGT once they now you make your living from trading. Any problems with that in GIB?

thanks, Chris

 

[H2O]

Quote from symbian11:

Hi H2O,

Good to have you with first hand experience. How hard was it to get a residence permit (I am a EU citizen so it should be easy >>?)
Do you have to file a tax report? What do you declare?
In some contries it seems that they try to tax you with income tax rather than CGT once they now you make your living from trading. Any problems with that in GIB?

thanks, Chris

A residence permit depends on your financial and/or employment situation, but as you said, as EU citizen it shouldn't be a problem.
Tax filing again depends on your financial and/or employment situation (sorry I cannot be more specific) - Gibraltar has several options, including at least one specifically for professional traders.
If you are a professional trader (trading is your main source of income) Gibraltar will also see (part of) this income as income tax. If your trading activities are carried out in a personal account and are not your main income source, Gibraltar doesn't tax (No capital gains tax in Gib)

Hope this helps

 

[symbian11]

Quote from H2O:

A residence permit depends on your financial and/or employment situation, but as you said, as EU citizen it shouldn't be a problem.
Tax filing again depends on your financial and/or employment situation (sorry I cannot be more specific) - Gibraltar has several options, including at least one specifically for professional traders.
If you are a professional trader (trading is your main source of income) Gibraltar will also see (part of) this income as income tax. If your trading activities are carried out in a personal account and are not your main income source, Gibraltar doesn't tax (No capital gains tax in Gib)

Hope this helps

I just read through some legal texts and found the mentioned different options.
However, the special status of 22.000 max tax is only available above a net worth of 2million. unfortunately this is not the case for me.

The text did not say anything about "trading tax". It even explicitly states that dividends and interest are exempt. So income from swaps (interest from rollover) should not be taxed:
http://www.pwc.gi/publications/assets/Tax_Facts_Booklet_11-12-altered.pdf

Can you illustrate how you are taxed. I don't need to know any exact numbers And how can you contribute to social security (e-card) without being employed? Do you enjoy living there?

I trade with a private account and only for myself. However, it is also my only source of income.

regards, Chris