Since the question is so imbecile, I have an even more amazing question: Hey successful traders, why don't you just make MORE money, so you don't have to move to a 3rd world country and you can keep your friends and family around?
Well, i wished my native country had such a low crime rate as Hong Kong, Singapour and probably Dubaï. High taxes don't necessarily translate into higher security. What´s the murder rate again in the us ?
this Thread is beeing highjacked with constant references to 3rd world countries. a lot of wealthy people migrate for tax reasons, and they can find low taxes, at least lower taxes than in their home country, in relatively safe as well as first world surroundings. Also living one's own country is often a little bit deeper than saving on taxes, talk with tax exiles and they often don't sound very different than political exiles so deep is their distrust of the governments of the countries they are fleeing - and so much they are harassed by their administration. A noticeable difference is that tax exiles are able to foot their own bills. Also it's a sensible move for a moderately succesful trader, especially without kids, to move to a tax free developping country. It's much easier to increase one's capital if you don't pay taxes, be it on 50k or several millions yearly profit.
Actually there is at least one member who seems to be in the process of living there. Professional traders seems to profit from low tax structures if not tax free. A set up mentioned here a couple of times for europeans is trading through a luxembourg investment fund, it works almost tax free for belgium residents, not sure about swiss residents. Also the license from Luxembourg financial authorities doesn't seem to come easily. I inquired once but didn't get much information. Will definetely look more seriously into it if and when I settle back in Europe, but I'd much rather live in Switzerland than Belgium.
I don't think there is a tax-free country, especially for the capital gain. They should pay for the road and military by tax. But I heard that many country like US charge about >30% for the highest tax bracket in 1040. However, in Singapore they charge as low as 20%. So, what we need to do, is finding country with low tax rate. Most country welcomes anyone who bring some modest cash to reside and pat many kind of tax like sales tas for living. For example, US welcomes anyone who bring $500K for investment, isn't it? Suppose one has long-term winning logic. A has annual 30% before tax and 21% (after 30%=30*0.7 taxation). However let B has 30%annual be frore tax but 24% after tax for 20%tax rate. For the long term, like 40 years from 30 to 70, A's asset grows 100*1.21^40 = 204840 which is 204 times, but B's asset grows 100*1.23^40 = 394643 is about two times of A. So if the original seed 100 above is $100K, the B in low tax rate country makes a lot of money even if he fly to move there and buy a new house in the country with low tax rate (only 10%(30-20) difference)
Furthermore, if one has (performs) long-term winning starategy (entry and exit), be sure to compare brokerage fee for each country with different tax rate. Also it depend on the how often one trade. For example, if one has 100K as seed cash, it is called 3 if he buy(or sell) 300K in EVERY month. If the number increase and if one buy small amount, then the brokerage fee also increase. For example, I heard Singapore charge more brokerage fee like UK than US. **************************************** Therfore there are three criteria to choose country. 1) capital tax rate 2)how often he trades in a month in average 3)in the country is their brokerage fee is proportional to amount or by the trade incidence. Also one should already a winning strategy before moving. For example, suppose he has 100K as seed and he buy 100 pieces of 1K in each trade In HongKong and Korea they pay 100K*0.033%=$330 (without capital gain tax). But in US and UK, they pay $2K in roundtrip of each $5 with additional capital gain tax. But if he invest the 100K in one time, former still pay $330 but latter pay ONLY $10 with capital gain in next year. (assume that lowest fee in US is $5.)
Jk there is 0% cap gain tax in Hong kong, and one can trade us markets through us brokerages from there, hence paying same commissions as us residents... But thanks for the first calculation, not only for traders, for employees on decent salaries it´s even worse, in western europe they bring home less than half what the employer pays for them, with what people can save in taxes, after how many years can they earn the same money just with passive income ? High tax is good way to keep people dependent on the state, much easier to become financially independent in a low tax environment.
Of course only(?) HongKong and South Korea has NO capital gain tax in security market(equity and future/option). However, they charge trading tax plus brokerage, as much as 0.33% EVERYTIME. For example, if you have 100K as seed and trade ONLY ONCE every day, for one year(240 days) you pay 240*$330 = $79200 which is about 80%of initial seed EVERY YEAR. Therefore, most day traders die within a few years, unless he show annual 100% profit curve or higher, which is impossible. / Those who show annual 100%, can bring ONLY 20% to home after paying 80%. Also I heard in mainland China, they changed from 0.33%(same as HK and Korea) to 0.13%, few years ago as market begins slow. ****************************************************************** BTW, would you please tell me more situation for US traders, to trade HK stocks? I mean tax rate, etc. And can you receive intraday quote (roughly every minute) for HK equities? If so, tell brokerage company which deliver HK stocks price real time. How they represent stock symbol (Chinese letter?) Do you have to exchange from US dollar to HK dollar, before BUY order? In short, do you pay 0.3% everytime for trade tax in HK stock, and NOTHING in 1040 tax for HK profit?
What's so hard to understand : HK traders can trade the same markets as americans, if they trade US markets it will be mostly using the same brokers as american citizens, paying the same commissions ( but no cap gain taxes, the witholding tax on dividends will be different as well). A whole bunch of foreign brokerage have offices in HK, with targets ranging from Mom and Pop to large funds. They can also trade most world exchanges open to foreigners, it's not because you are resident in one country that one has to stick to its local market. Besides Interactive Brokers offers HK markets with real time data and multi currency to american citizens ( as well as north american markets to HK citizens) . The stock symbols use numbers. But as you mentionned trading HK markets is expensive in terms of commission, I wouldn't advise it for short holding periods. You will have to pay the same duties as HK residents AFAIK upon trading HK stocks, plus the cap gain in the US I think.
This is a good time for me to introduce myself briefly. I have S. Korea passport who resides in US before for ten years. So with a valid Social Security Number and Drive License, I was able to open an account in Etrade few months ago and hold US equities now. Only online credit check was required for Etrade account so that I can open it in Korea by internet. It might be because I manage good FICO score as high as 750 to 800. / However I had a chance to chat with the TradeKing to hear that I need current utility bill in US, before opening. It means TradeKing asks more document than Etrade. At least TradeKing is losing a lot of brokerage from me, for tlack of utility bill. How about IB? Also during the last five-year stay in S Korea, I found steady winning (NOT high) logic in Korea market, so that I can transport same logic to other country, if they charge LESS tax in the long run than S. Korea. / For the frequent-buy traders like me, they charges too much tax at the time of execution, in Korea/HK. For the ONLY tax reason, I should prefer annual capital gain tax country, just for money. Also commission is second important factor to choose country, in addition to tax system. My current logic allows only three times (roughly) of BUY amount in every months. For example, suppose 100K as seed, there SHOULD be ONLY 300K in total BUY every month. However there is some advatage in HK/Korea traders that I can slice to very very small amount, such as one time buy of 100K (one shot to one stock symbol all together) pays SAME tax and fee as 100 pieces of $100 each. ***************************************************** In short for summary, if I stay in US for five years and run the same logic(trading) in US market, my profit is (by simulation) higher than in Korea (for 5 years), just for the tax difference. Of course, for the return amount before tax, it will be same in both US and Korea for the SAME logic. Most frequent buyer in trade is definitely dieying for the accumulating tax amount. But rare BUY traders like Warren Buffet, who invested some Korea company, do NOT pay any capital gain tax in the future. NEVER. It is possible, for the two trader (A, B) with same logic and same profit curve before tax, A wins after tax in US and B lose after tax in Korea/HK.