A site with lots of good info. http://www.panamalaw.org/ US CITIZENS BEWARE: you must always report and pay taxes on any structure or bank account you own worldwide to the IRS. EVERYONE BEWARE: this site has good info, but I have no good or bad references about their services. Most of that info is true but some of it is also misleading. For example, the passport offer is potentially misleading because you get a Panama non-citizen passport which is not accepted anymore in most countries, but it's useful to enter Panama without having your own passport stamped. They seem good to open bank accounts though.
As a non resident alien trading US markets since 1998, I will add my few cents! It is great to be a non resident alien for trading US markets because you dont pay capital gain taxes.(except with holding taxes on dividends & taxes on income from us real estate etc.(I have had Motels in US before) But the main problem the original poster asked was what does his home country/resident country IRS doing with his global income? ( income earned outside his native/resident country) Iam guessing that his countries tax laws demand tax on his global income including USA stock market gains? (Double tax avoidance between his country/USA will come in to play) Opening trading a/c in US as an alien with w8 does not mean US IRS automatically reporting his gains to his home country. whether you have LLC in Delaware/panama/Singapore /HK does not matter if his home country demands he declare all his global holdings!!!! My country does!!! Only problem comes when your home country bank records show wire out/wire in from US broker & that bank detail ends with home country IRS. (if you choose not to declare US market trading capital gains) If you dont leave trail of funds out from your country & willing to keep a permanent bank a/c outside your home country ,it does not matter how you trade in US markets (indivual/LLC etc) Make money in US markets tax free & keep it abroad (away from your home country & dont leave any trace!!!!!)
This is illegal, and in western Europe you'd get busted in no time. In other countries with lax law enforcement, this might work. Geez in some countries they don't even know what a "stock" is.
Not reporting your account might work if you live in a country with no tax treaty or exchange of information with the US. Tax Treaty countries: http://www.irs.gov/businesses/international/article/0,,id=96739,00.html
Hi Surdo: you mean trading from the Dominican Republic by a non-US person? If that's the case then the same advice I gave to Daal. Otherwise, for US citizens, the only difference (wrt trading from the US) is the 80K expat exemption. But even if you're US, Dominican Republic citizenship and passport can be had in 6 months or less, one of the easiest to get in the world.
I am familiar with how to obtain Dominican residency and citizenship. Dual RD/US is not a problem with either Government! If one has a Dominican Passport and Dominican Bank Account, what FCM will accept funds? el surdo
Daal, How nasty are the tax laws in your country? Is it Brazil??? US tax laws are nasty enough trimming 30-40% of the net most daytraders bring home. How much is your country taking????
Daal, My suggesting is to not waste your time asking questions here> I suggest spending a few thousand $ with an international tax law firm to get the definitive answer. start with www.meritas.org Don B is way ahead of you with hiding his secret assets, so I know he won't share the knowledge of where he put all this money I found that he earned; http://www.pokerpages.com/players/profiles/63099/donald-bright.htm
Yes, but i wouldn't follow any lawyer's advice blindly. Many of them are trying to sell expensive setups, many times unnecessary and sometimes illegal. Even KPMG, an otherwise excellent firm, lost a tax shelter fraud lawsuit with the IRS. Some lawyers recommend bureaucratic structures with lots of complicated paperwork to file periodically. Why? So you have to pay them to do that paperwork. The best thing is to educate yourself and understand the basics of your relevant tax system. The guy a few posts above, krishiyer, has a system that works for him (so far), but I doubt any lawyer would advise anyone to do that. Why would he? He doesn't make any money in it. Of course, it's illegal, but there are lawyers that have no problem recommending illegal structures if there's something in it for them. Not to mention the crook offshore lawyers that trick you into giving them signatory powers to your accounts and then vanishing along with your money. Once you "get it" it's not that complicated to minimize legally your tax burden if you plan in advance. There's no need for hotshot tax lawyers unless you are a multinational conglomerate with income and subsidiaries in many countries, or an investment firm/hedge fund looking to raise its profile and pedigree hiring the top Wall St lawyers.