Best Country for Trading (Tax efficiency)

Discussion in 'Taxes and Accounting' started by ET873, Feb 3, 2010.

  1. ET873


  2. Stosh


    Good question..........hope someone can name a few countries. I have read that Ireland has cut taxes a lot, but don't know details. Stosh
  3. I am not sure which one of these countries would be the best, but this is a list of off-shore tax countries: Bahamas, Barbados, Caymen Islands, Isle of Man, Lichtenstein, and Turks and Caicos. I am not sure if they would be a good idea.
  4. bawr


    Among others, Argentina, Egypt, Hong Kong, Jamaica, Singapore, Switzerland, Turkey, and the UAE have no capital gains tax.

    Japan and the Netherlands have effectively negligible capital gains tax.

    However, US citizens and permanent residents are out of luck, as they must pay taxes to the IRS, no matter where they are domiciled. (The Philippines and Eritrea are the only other countries which impose such a draconian policy.)
  5. E-Trade has set up shop in Hong Kong and let you trade the US stocks using the same tool that E-Trade-USA uses. In Hong Kong: no capital gain tax. But you must not be a US Citizen.

    Maybe find someone you can trust who lives in Hong Kong to open the account?
  6. Costa Rica, Chile and Uruguay don't tax foreign income of non-residents.
  7. moarla


    If you are qualified as professional trader you pay normal taxes in switzerland Belgium Netherlands. etc....
    The best way to do trading is the following: (if you dont want to live in a boring place like the Bahamas AND ITS NOTHING FOR YOU GUYS FROM THE USA)
    -put your residence in a place where you are taxed only on the income generated in that place (f. example in europe Malta, UK or specicic case Switzerland with a negotaible fix tax amount, outside europe other countries)
    -build a offshore company in tax free land of your choice and trade on that
    -live wherever you want (secondary residence)
  8. ET873


    What about people who live in the US, but move (for work) to Canada and become residents there? How can the US claim taxes on something they had no part in producing? At the most extreme case, I think you can revoke your citizenship to avoid paying the taxes. But is the trick to setup an off-shore company and trade through that? Is that why ETrade went to Hong Kong? I guess for people who only trade for a living, the income tax of the country does not matter, it's only capital gains right?
  9. moarla


    ETrade is a company, and a company is taxed where the company resides and works. Personal income tax is an other story.
  10. Some countries do not impose or have relatively low capital gains (e.g. Switzerland, Canada) but they may consider short term trading gain to be regular income, not long-term capital gains. You will have to pay taxes according to the income tax schedule.

    Switzerland however offers the lump sum taxation regime to foreigners as long as you have no domestic derived income nor job. You will have to pay a lump sum amount annually (based on the rental value of your dwelling, minimum depending on the canton usually $100,000-$150,000 annually) and then you will not have to file a tax return at all. Switzerland can be a great solution if you make upwards of a million or so in short term capital gains every year.

    As outlined above, all this is worthless for US citizens as they're taxed based on their citizenship, not residence.
    #10     Feb 4, 2010