offshore bank accounts

Discussion in 'Professional Trading' started by econometrics, Nov 29, 2011.

  1. where do you guys open offshore bank accounts? i already have accounts in Hong Kong, Japan, and Singapore.

    I am considering opening one in Luxemberg and Seychelles
  2. If you already have an account in Hong Kong, you'd know that Hong Hong companies pay some of the lowest corporate tax rates in the world. It's like 10% from memory. Given the recent high profile tax evasion cases that have occured in relation to swiss accounts, you need to ask yourself if its really worth the risk to save yourself that last 10%.

    Jail time is a very real possibility if you're prosecuted for tax evasion.

    You're better to stick with a low tax jurastiction like Hong Kong that draws no attention whatsoever.
  3. SO its perfectly legal to operate in hong kong? Is that what your saying? I wonder why more people dont do it then
  4. You can bank on Mars (and even Neptune) if you can stand the walk to the teller widow. There are no ATM's or wire transfers from the other planets. The only thing is you must disclose certain financial accounts on in your Federal tax filling every year.

    At one time I was a signatory on corporate accounts in a handful of European countries but each account was fully disclosed here in the US. These accounts were required to operate our business and there was never a desire to avoid taxation. They helped us make money and we payed tax on what we made. It was a fine deal.

    I think the answers to your questions only become realistic once you answer the key question: Do you have a reason for having these accounts that is not related to committing tax fraud? If you do and are prepared to disclose these accounts you should be very comfortable opening up with any bank in any country you choose. If you don't and intend to hide the accounts it is, at this point in history, quite a high risk move. The US Treasury has opened up an offensive to curtail this behavior (Google UBS IRS) and their zeal will likely increase over time rather than wane; tread carefully here. Getting caught will be at least very expensive and at worst potentially criminal resulting in some jail time.

  5. pathmover


    How do you know more people are NOT doing it? It's perfectly legal to operate anywhere. Make sure proper disclosure to IRS and Treasury. Perhaps you need to read up on tax code!
  6. exactly. here is the question on the 1040 that you must answer. are you going to lie?

    7a At any time during 2011, did you have a financial interest in or signature authority over a financial
    account (such as a bank account, securities account, or brokerage account) located in a foreign
    country? See instructions . . . . . . . . . . . . . . . . . . . . . . . .
    If ¡°Yes,¡± are you required to file Form TD F 90-22.1 to report that financial interest or signature
    authority? See Form TD F 90-22.1 and its instructions for filing requirements and exceptions to
    those requirements . . . . . . . . . . . . . . . . . . . . . . . . . .
    If you are required to file Form TD F 90-22.1, enter the name of the foreign country where the
    financial account is located ¢º
    8 During 2011, did you receive a distribution from, or were you the grantor of, or transferor to, a
    foreign trust? If ¡°Yes,¡± you may have to file Form 3520. See instructions on back .
  7. Do you have futures accounts in any foreign countries?

    In general the commission rates seem too high....
  8. heech


    Assuming the guy isn't asking for tax evasion advice (I don't have any)... I will say I use and like HSBC's global premier banking services. To qualify for premier, you need $100k in total deposits. You can open local accounts in any of the territories that HSBC has a presence in, and get access to local banking services: debit/credit cards, investment products, etc, etc. You can transfer funds between your various HSBC accounts (in any territory) instaneously and without charge.

    I have accounts in the US, Hong Kong, mainland China... and local deposits + debit cards for each.

    So, if your goal is to have banking convenience and/or currency diversification, HSBC is a good retail way to go.
  9. It's completely legal to set up a company in hong kong, set up a bank account in hong kong and open an interactive brokers account via the hong kong office.

    You have to pay company tax at the hong kong company tax rate on any profits, however if earnings are kept within the company and not paid as dividends then reinvested back year over year, you won't be subject to pay tax in the US on those earnings. If you repatriate dividends you are subject to tax at your nominal rate in your country of domicile.

    So in affect, you're not avoiding taxes, you're simply deferring them to some point in the future.

    Hong Kong has become one of the world's major import export hubs for the very reason that it is a tax friendly juristiction. They have expanded to become a major financial hub for much the same reason.

  10. heech


    Not correct, I looked into this a few years back. You can google CFC and PFIC. Basically, IRS doesn't intend to allow you a free lunch. If you have legitimate business needs, costs may be worthwhile. For us looking to trade securities, you get no advantage.
    #10     Nov 30, 2011