Offshore Accounts for beginners

Discussion in 'Trading' started by swissie, Aug 13, 2012.

  1. swissie


    Offshore trading accounts

    I'm an American, and I need more leverage in my forex trading (I do neutral strategies that require leverage).

    Unfortunately the NFA has a 50:1 limit, and does not allow forign brokers with 100:1+ to accept British or American citizens directly.

    I am looking for a way to setup something in Cayman, but I am a noob. I don't know if it's illegal-I don't think so since I'm not evading taxes. I think I'll need a cayman Corporation, and a physical address-I bet there are services around that do this.

    I wish barney frank wouldn't make it so difficult. Who needs margin limits on forex? It's an international market. 50:1 is not enough for spread betters!
  2. A leading CFTC enforcement attorney on the new CFTC forex trading rules - including 50:1 leverage for retail off-exchange forex trades - told me Americans can't use "dummy corporations" to evade the new forex trading rules. Forming a 100% offshore entity to trade forex over 50:1 leverage with a non-registered broker or bank would probably be considered evasion and lead to trouble.

    Offshore entites open a can of worms on new tax filings - lots of forms and professional fees - and it welcomes the IRS to audit you. Tax filings show these accounts and then the regulators may learn about them too.

    These rules are unfortunate but it's the law and trying to skirt them will lead to trouble. Dodd-Frank reform goes too far.
  3. swissie


    Rob thanks for the insight. I wonder if any new bills will come forward to improve Dodd frank to get rid of dumb things. Even equities have a min day trade deposit-my nephew tried to trade in his brand new ib account, only to have it restricted for being under a certain SEC limit (he was not made aware of this clearly on his sign up).

    I wonder if becoming a citizen in a country would be better.
  4. Bob111


    damn! it's good ..but getting better and better! :D

    what country?
  5. It will not help unless you both give up your U.S. citizenship and leave the U.S. permanently. One of these alone is not enough - you must do both. Otherwise U.S. laws still apply.
  6. Nym


    Why not setting up a fresh new legal entity oversea?
  7. At least at 50:1 leverage, it will take you twice as long to lose all you money.
  8. mm19


    50:1 seem quite enough. except if you trying to earn interest on long eucf trade :eek:

    i have enough capital in account to take 1 trade only. And 50:1 does it. Nice when taking out profits after new high.
  9. Why do ET dickheads give this honest guy one star?

    Some responses are complaining about how 50:1 is enough -maybe you can't read, because the first post says spread betting. 50:1 is not enough for that. Dumb asses. I think this form attracts only unprofitable traders like flies to a horses ass. All you people come on this form like big shots with big balls -truth is you are unemployed making no money trading, and living in someone else's home while you tinker with multicharts.
  10. mickmak


    #10     Aug 14, 2012