Best Country for Trading (Tax efficiency)

luisHK · Jul 24, 2014

Jakobsberg

I was in Helsinki again a couple of weeks ago and as usual, especially in the heat of summer over here, I wished I was in Scandinavia...
I checked a while ago, prolly when you mentionned it, the investment scheme in Sweden (not so sure about the name) where one pays that little tax.
It seemed to allow most financial products to be traded, including international derivatives but it was not clear which brokers one could use.
Are international brokers allowed ?
I'll have a hard time convincing the family to move that far north if we head back to Europe but I'm still curious...

Jakobsberg · Jul 24, 2014

luisHK - I dont know if Finland has something similar. For Sweden Nordnet and Avanza are the main brokers for trading. Since they are in the Swedish system they sort all the taxes out and you dont have to do anything. I have not looked into using anything other than a Swedish broker since I can do everything I need through them. Nordic markets are part of NasdaqOMX which is somehow linked to the main US Nasdaq so you can trade that cheaply.

For Avanza here is the pricelist (time for you to use google translate!)

https://www.avanza.se/prislista/premium/handel.html

You can put anything in an ISK account (options, certificates etc). Swedish banks often offer certificates with upto x15 leverage on popular stocks and indexes, e.g. apple, S&P etc which is normally the cheapest way to do it.

Hittfeld · Jul 24, 2014

Jakobsberg said:
Given all the talk of high tax nordic countries Sweden is surprisingly good for investments (it has to be or else all the rich families would leave). The majority of taxes come from the workers salaries.

For investments/trading every year you have to pay a tax on the total account value which is 30% of the state borrowing cost. With ultra low interest rates this means that for 2014 you have to pay just 0.627% of account value plus any payments into the account.

This will be less attractive as rates rise but in the current environment its great.

Spreadbetting is tax free in the UK as well which is another good option for those who want to stay in the developed world.
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That sounds like the dutch system: They assume you earn an of 4% on your account and ask for a tax of 30% on these. So your actual taxation is 1.2% .

Kind Regards

luisHK · Jul 24, 2014

Thanks Jakobsberg
Brokers price don't seem competitive with IB for instance on international markets but tax wise it's sure a sweet deal.
I haven't read of anything similar in Finland btw, Sweden seems to be the friendliest Scandinavian country to high net worth families, and visiting Stockholm it seems quite a few of them elected domicile there. Nice city.

Melissa Meiste · Mar 30, 2015

there are ZERO ways of avoiding taxes as a us citizen that aren't either 1) illegal 2) convoluted/gray area/expensive. believe me, i've researched them. in depth.

dealmaker · Mar 30, 2015

Melissa Meiste said:
there are ZERO ways of avoiding taxes as a us citizen that aren't either 1) illegal 2) convoluted/gray area/expensive. believe me, i've researched them. in depth.
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If you are a US citizen and you live abroad legally TEN years you gain ex-pat status and you won't have to pay IRS....

bawr · Mar 30, 2015

dealmaker said:
If you are a US citizen and you live abroad legally TEN years you gain ex-pat status and you won't have to pay IRS....
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This is false.

dealmaker · Mar 30, 2015

bawr said:
This is false.
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Then I stand corrected....

Gueco · Mar 31, 2015

marzullo63 said:
Many times the problem is that you can have all sorts of offshore triangulations, but if you buy a car, it's registered, it's an asset, needs to be declared hence will be taxed. In other words as soon as you take the money on-shore, then u need to pay.
For example in Switzerland you need to declare all you have, on all bank accounts in the world, of course you can hide, but as soon as they see you buy a 500k $ car, then you are caught, where did that money come from?

A trader needs a place like this:

- to be "resident" in a decent place and paying 5% income tax or less (of course ideally 0%), governments are just wasting our money anyway and personally, paying more than 5% income tax (all included) is equivalent to robbery.
- the place should also be relatively cheap in rents, because I see rent also as a tax, Monaco may be a super duper tax free place, but in the end you pay taxes in your inflated rent.
- Normally he doesn't want to buy anything, except gold, a luxury car or boat (and have no obligation on declaring it as an asset, just pay the plate tax/license to local authority, which would anyway be low because it's a fixed rate).
- low criminality is essential, you don't want to deal with this problem otherwise no matter how successful you are if someone is ready to stab you in front of your house gate.
- The country needs to hold such advantage conditions for a realistic long term of 10+ years, not like Andorra for example, if you now go there, your income free rights will be removed from 2016, same is for the lump sum tax in Switzerland, it will be abolished soon. You don't want to be in the situation were after a large effort to relocate your family, then you discover yourself with the ass on the floor once again.

And If you have an US passport (thanks god not me), you need to find a way to give that up, for example if you marry an Italian woman, after 3 years you get the passport without even being resident there, so that you can trash your US one.
Furthermore, you wanna leave your pension funds in a private account somewhere trusted, for example Switzerland, not a banana country which will be anyway under sea level in 30 years from now.
Personally I have a double EU passport, and those countries do not tax non-residents, but they tax resident traders!
Let's see if someone comes with some good hints.
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are you complaining about the new andorran 10% income tax?
what about the capital gains tax, thats still 0%.

Ditch · Mar 31, 2015

marzullo63 said:
Many times the problem is that you can have all sorts of offshore triangulations, but if you buy a car, it's registered, it's an asset, needs to be declared hence will be taxed. In other words as soon as you take the money on-shore, then u need to pay.
For example in Switzerland you need to declare all you have, on all bank accounts in the world, of course you can hide, but as soon as they see you buy a 500k $ car, then you are caught, where did that money come from?

A trader needs a place like this:

- to be "resident" in a decent place and paying 5% income tax or less (of course ideally 0%), governments are just wasting our money anyway and personally, paying more than 5% income tax (all included) is equivalent to robbery.
- the place should also be relatively cheap in rents, because I see rent also as a tax, Monaco may be a super duper tax free place, but in the end you pay taxes in your inflated rent.
- Normally he doesn't want to buy anything, except gold, a luxury car or boat (and have no obligation on declaring it as an asset, just pay the plate tax/license to local authority, which would anyway be low because it's a fixed rate).
- low criminality is essential, you don't want to deal with this problem otherwise no matter how successful you are if someone is ready to stab you in front of your house gate.
- The country needs to hold such advantage conditions for a realistic long term of 10+ years, not like Andorra for example, if you now go there, your income free rights will be removed from 2016, same is for the lump sum tax in Switzerland, it will be abolished soon. You don't want to be in the situation were after a large effort to relocate your family, then you discover yourself with the ass on the floor once again.

And If you have an US passport (thanks god not me), you need to find a way to give that up, for example if you marry an Italian woman, after 3 years you get the passport without even being resident there, so that you can trash your US one.
Furthermore, you wanna leave your pension funds in a private account somewhere trusted, for example Switzerland, not a banana country which will be anyway under sea level in 30 years from now.
Personally I have a double EU passport, and those countries do not tax non-residents, but they tax resident traders!
Let's see if someone comes with some good hints.
More...

What you are lookin for doesn't exist. Monaco has the advantage of being safe, as it has avoided the influx of third world scum, that happened in the rest of Western Europe. A lot of people are leaving the French Riviera, one of the most beautiful places on earth as it has been become a very unsafe place packed with backward people from tribal, medieval cultures. Same goes for London, Paris, Amsterdam, etc. As for long-term security about tax conditions. Don't count on governments being trustworthy. Ie in holland you pay 1.2% tax on capital gains, however politicians are beginning to get uncomfortable with that. I'm living in Holland right now, but I really don't know of a place, where you can have all pros and not the cons.