ECN brokerage discussion

[comintel]

Under all tax treaties a corporation is considered a resident where it is incorporated.

However according to http://www.greencompany.com/blog/index.php?sectionid=22

Dummy offshore corporations: Not a good idea

Even if you hear from some that the CFTC may focus its enforcement efforts against foreign unregistered intermediaries rather than on individual traders, it’s important to understand the CFTC considers evasion a “prohibited transaction.” Forming a dummy offshore corporation to open a retail off-exchange forex trading account with an unregistered offshore bank or broker is considered evasion, according to the CFTC. Attorneys, CPAs and financial advisors who suggest using dummy corporations to evade these CFTC rules may face challenges by their professional license boards and bars on infractions to their ethical codes of conduct.

If you are foolish enough to use a dummy offshore corporation in this regard, you still need to disclose your American ownership of the corporation to your foreign broker, who may deny the account treating it as an American-owned account. If you don’t make that “know the client” disclosure, the broker may have grounds to take action against you.

 

[gtor514]

Quote from comintel:

Under all tax treaties a corporation is considered a resident where it is incorporated.

However according to http://www.greencompany.com/blog/index.php?sectionid=22

Thanks for the link. It's very informative. But, let me clarify the intent of setting up an offshore account is not to evade paying taxes. The intent of setting up an offshore account is to allow one to trade. Income/profit made by trading would be distributed to shareholders annually or quarterly who will in turn pay income tax to the country of residency.

If the law says you can't setup a foreign account to trade legally than so be it, but that is not the same as setting up a foreign account to trade so as to avoid paying taxes. There is a distinction.

 

[comintel]

Quote from gtor514:

Thanks for the link. It's very informative. But, let me clarify the intent of setting up an offshore account is not to evade paying taxes. The intent of setting up an offshore account is to allow one to trade. Income/profit made by trading would be distributed to shareholders annually or quarterly who will in turn pay income tax to the country of residency.

If the law says you can't setup a foreign account to trade legally than so be it, but that is not the same as setting up a foreign account to trade so as to avoid paying taxes. There is a distinction.

I agree but I believe that if one reads the article carefully, he is talking about running afoul of the CFTC, not of the IRS in this case.

I think that he may be being over-cautious though (or the CFTC over-reaching).

It might be ideal if the foreign corporation could have some activities apart from FX trading in the foreign country but this may not be essential. Maybe buy some local stocks.

After all, foreign trading corporations in tax havens are common and are not improper per se.

The immediate problem may be to get nervous foreign brokers to accept such ab account. Probably small ones may, but would the big ones such as ACM? Probably they would ask for a personal guarantee and for a U.S. resident night be reluctant to accept the account.

By the way, there may be an even easier way. Investors Europe offer to set up "a personal, segregated nominee trading account" at no charge even if you trade with them.

http://investorseurope.com/offshore_companies.html

I have not looked into it in any detail.

 

[gtor514]

Quote from comintel:


The immediate problem may be to get nervous foreign brokers to accept such ab account. Probably small ones may, but would the big ones such as ACM? Probably they would ask for a personal guarantee and for a U.S. resident night be reluctant to accept the account.

Yes, this is the key. My whole plan hinges on this point and that is why I made it step one in my plan. It all depends on whether reputable broker exists that will not be intimidated by U.S. regulators and laws and will accept the account.

Since the regulations are new, I suspect many brokers will need time to interpret the laws and impacts. Over time they may begin to cater to such entities as a result of the regulations. In the meantime, maybe there is an ET member who is a U.S. citizen out there who as some experience with matter and can shed some light as to feasibility. If this subject becomes popular, I recommend ET setup a "sticky" post dedicated to this matter in order to have a central location to exchange ideas and experiences.

 

[fxPadawan]

As I said in my first post on this topic, all you need is $10M to play outside of the US.

(v) a corporation, partnership, proprietorship, organization, trust, or other entity—
(I) that has total assets exceeding $10,000,000;

We are living the propaganda I was taught about Russia and China when I was growing up, right here in the good old US of A.

And it's not Obama. Don't be a lemming and have the mentality to put this all on one man. Sure technically he could have vetoed what the House and Senate both passed, but I posted a list of names YOU can vote out. Unless you think the entire Dodd-Frank Act had no good in it.

Better yet, maybe write your elected officials and see if certain parts of the Dodd-Frank Act can be revoked. Perhaps they even voted against the act.

 

[southbeach4me]

Quote from EmpireGlobalfx:

Try an offshore vehicle... or be a victim of authority

You talk like a used car salesman

Id rather have "authority" trying to make sure my broker doesn't interfere with my trades and spreads like the grand majority of you offshore brokers do.

....no pun intended .....pffffffffffffft !!

 

[ElectricSavant]

So as a US Resident, I am expected to "don't ask don't tell"...

Then to make matters worse....I must worry about my funds being safe....The sort of dealers that would accept my funds now have disclaimer forms!!!!

The world of of Forex dealers has always been shady...now this CFTC thing....

No thanks...I quit (If I had more money to lose, I would use a US dealer like Oanda) Those of you entertaining the thought of continuing are just in denial...Get out of Spot Forex, Trading, Leveraging and Speculating! In this worldwide depression the only ones that will make any money are the dealers and the brokers IN ANY RETAIL INVESTING IN ANY MARKET...(the money grabbers got too greedy and we now know their tricks).

ElectricIsHetroSexualForexSavant

 

[fxPadawan]

Dukascopy is regulated, and the best overall FX broker I know for my preferences in a broker (which includes regulation).

We'll have to see what kind of spin FXDD puts on Dukascopy's technology.

In the meantime, MB Trading is the best overall broker I know of in the US (or is that the United States of Socialist Republics?).

"Now eat all your food Hans. Think of the unfortunate children in the US whose parents can't trade outside of their country." -Hans' parents

 

[gtor514]

Quote from comintel:



By the way, there may be an even easier way. Investors Europe offer to set up "a personal, segregated nominee trading account" at no charge even if you trade with them.

http://investorseurope.com/offshore_companies.html

I have not looked into it in any detail.

After the watching the big run in gold the last couple of days and being unable to trade it in either my spot accounts, I am now looking very seriously at all options. This actually looks pretty good. I downloaded two of their platforms and tested each. The spreads are actually pretty good and execution is fast. Haven't heard much about them elsewhere but am looking.

 

[southbeach4me]

Quote from ElectricSavant:

So as a US Resident, I am expected to "don't ask don't tell"...

Then to make matters worse....I must worry about my funds being safe....The sort of dealers that would accept my funds now have disclaimer forms!!!!

The world of of Forex dealers has always been shady...now this CFTC thing....

No thanks...I quit (If I had more money to lose, I would use a US dealer like Oanda) Those of you entertaining the thought of continuing are just in denial...Get out of Spot Forex, Trading, Leveraging and Speculating! In this worldwide depression the only ones that will make any money are the dealers and the brokers IN ANY RETAIL INVESTING IN ANY MARKET...(the money grabbers got too greedy and we now know their tricks).

ElectricIsHetroSexualForexSavant

ElectricSavant, with all due respect, you have no business posting such baseless, erroneous info claiming that retail traders are losing and will lose to their broker/dealer bcuz of the current economic situation. Just bcuz you havent been able to even achieve "break even" on your win-loss column is not an excuse to post the negativity you're throwing around with the intent of hoping other traders share in your misery of not being able to make it in the business( under ANY economic timeframe, past present, or future).
You seem to be embarking on a personal quest to be the poster child of "misery loves company"

You have truly overstepped your bounds as a moderator. Your posts are shameful and highly irresponsible; and are a detriment to aspiring/learning traders who come here to learn and try to become successful in the business(whether it be part or full time, under any economic conditions). I ask that this site review your posts and qualifications if you are to continue to be a moderator here.


If you want to be ban me for stating the obvious and making it known to others on here, fine with me, you'll just have proven my point.

My apologies to fellow ET members for bringing this up, but this false info and negativity crap has got to STOP!!....it helps no one!!

Sincerely
southbeach4me