Here is some kind of tax comparison between the countries. https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates In Monaco, there is NO income tax, although it is hard to believe.
That is a complete oversimplification, in reality taxes are much more complicated (and I think we've talked about this before).
No objection to yours. I know a football(soccer) star with huge income from ManUnited has Monaco entity, for his tax purpose. It is legal to stay out of original country.
I have always been a fan of legal tax avoidance since tax is 51% for higher earners where I live (Ireland) Would the following effectively allow us traders to nullify tax on our trading profits: 1. Live where you want: USA,EU,Asia wherever. 2. Set up an LLC in Cayman Islands, BVI, UAE (or any country with no taxes) 3. Open brokerage account + bank account in the LLC's name deposit your funds. Trade away and your money is compounded tax free. 4. You draw a salary when you want which is taxable. But since your money is compounding tax free the difference in wealth gain is huge when you not giving half away each year.
In the CorpoTax-free country, suppose SnP500 is 10% up in 2013 and SnP is down 10% in 2014. 1) most person (individual investor) pay income tax for the 2013. 2) However, for the above new Corporate, there will be NO tax at all during the two years (2013 and 2014) Cayman+BVI+UAE, how about Monaco? For the above 4, if you draw small salary in particular year, the small tax in that year. But the problem is "Do they open brokerage account under the NewCorpoName?" and "If so, can you use margin?"
Fundlord, it depends on where you are a tax resident. In some countries it works and you could even receive dividends tax free from the company rather than a salary (in HK for instance ). Do that in much of continental Europe and you are in trouble. You still have to think how it works taxwise to dissolve the company and receive back the profits accumulated there.
Since I live in Ireland (51% tax) and If I was making millions I would either live in Monaco more than 183 days of the year and I will have no taxes whatsoever (US citizens unfortunately can't take advantage of this) Monaco however has corporation taxes so setting up an LLC would not be wise there. But that being said I wouldn't mind paying 55% if I was living in Beverly Hills, CA no matter how much I make. 55% for great weather year round, nice shops where you can actually spend real money, beaches, clubs doesn't sounds like a bad deal to me etc. Paying 51% living in horrible weather, garbage shopping, crime/drug ridden, small city with little to do is highway f****n robbery IMO.
It makes sense to me. Suppose one made a million in the past 10 years, with initial seed of 200K, for example. Annual compounded profit rate is 17% based on (100/20)^(1/10) = 1 + 0.174619. For the past 10 years, if you paid half of the pre-tax profit, then probably pre-tax annual rate is roughly double of 17% for the 10 years. If you live 30 years more, and are promised to keep the annual 34% profit, then you better change location of residence with LLC expense. For the entire 40 years until you die (of course like everyone), 1)With annual 17%, you will have 1.17^40 = 533.8687 times than the seed 2)With annual 34%, however, 1.34^40 = 121392.5 which is a lot bigger than the 533 times. If one change from 17% to 34% for sure, then he would pay ONE MIL cash to me.
However, Buffet made 4000 times for his 45 years of investing term, WITH THE ANNUAL COMPOUNDING 18%, as long as it is true. That is best among what I heard. Probably that is why Buffet use LLC for tax purpose. Even if it cost ONE MIL for founding paper company, after 40 years, it makes you better living.