Trading FROM offshore

Discussion in 'Professional Trading' started by JS11374, Jan 14, 2002.

  1. compaque


    Janko -

    that's a great question - one of the many dilemmas presented by the "new economy" I guess.

    There used to be some great tax message boards over at Yahoo, with a bunch of CPA's on there trying to out-do each other with obscure tax rules - you might find an answer there.

    Also, you can write the IRS and ask for an Opinion Letter on what to do in that particular situation if you can't find a rule anywhere else, and if you follow the response you are protected. The answer might also lie somewhere in the Tax Regulations published by the IRS (available at the IRS website)

    good luck.
    #11     Jan 15, 2002
  2. tntneo

    tntneo Moderator

    yes. but the latest question were regarding a foreigner making money from Europe in the US market. Then it gets fuzzier because you owe tax where you make money (at least when you are not american).
    and the 'where' is defined with difficulty when trading is concerned. so usually it is your residency that counts. again, I am not sure for US citizens, but I am sure about foreigners.

    this is subtle because capital gains can't be easily located. I reverse the example for you.
    You invest in australia index from Chicago. You pay taxes in Chicago because you live there. you owe nothing to the australian gov.
    if you would receive a salary from australia, then the australian gov would take its share (and you would have a tax credit in US for the tax paid already).

    just my 2 cents (tax deductible !)

    #12     Jan 15, 2002
  3. JS11374


    Hey guys, thanks for all the great replies. With regard to citizenship, I'm thinking of renouncing it. The tax is just too freakin' socialist (okay, so there are countries that are worse, but I can definately find the 0-tax ones :)). What do you guys think? Am I being crazy?

    (oh, I do LOVE america and all, it's just some parts of it is not what I signed up for.)
    #13     Jan 15, 2002
  4. Funster


    Please let me know about your 0% tax countries.

    I have been seriously looking for the last few months now and every one of them has serious drawbacks in other areas (unless you have $20million plus to bring with you - then you can get into and afford to live in the decent tax havens - Channel Islands, Monaco etc.

    Myself as a UK resident - I am thinking about moving to the STATES!!! We pay slightly higher taxes (but the lowest in Europe) than you but we get a National Health Service. I am willingly to forfeit that for the more relaxed tax bands in your country.

    You have also got among the cheapest tax on gasoline, alcohol and cigarettes in the world. So it ain't that bad there!

    Plus my country is literally sinking under the weight of all the (Afghan etc) refugees coming here to take advantage of the free government handouts. Even France (with it's heavily taxed, socialist welfare state) won't give them the handouts our govt gives them right now! Crazy liberal bleeding hearts!
    #14     Jan 16, 2002
  5. C2C


    There is a 0% tax on capital gains in :

    As well as in some smaller countries,
    but these would be a lot more regarding toward the financials of their candidates for immigration and can possibly be subject to political instability.

    JS, about renouncing your US citizenship.
    You should read your BOR and Constitution, learn
    about other countries and realize that you live in the (still) greatest country in this world.
    This is priceless, in my honest opinion.

    Sorry for the off-topic comment...

    #15     Jan 16, 2002
  6. JS11374


    Right on Funster. C2C,

    In a former life I was a political analyst. I did nothing but chew and grind the constitution. I of all people appreciate the US. But the disadvantages are being very serious (alright, not as bad as Europe):

    1. Taxes. Don't need to expand on this anymore.
    2. Guilt. (Haven't you heard? Making money is bad!)
    3. Regulations (heard of the SEC, IRS, NASD, .... they all descend on you like vultures when you least expect...)
    4. Bad bad corporate laws (double tax, difficulties of starting business in actually useful places like new york - where the fees are pretty high).

    The list goes on. But you get the idea. I'm in the middle of forming a quantitative hedge fund. I'm relatively young. I don't need the draw backs of being a US citizen. With the right capitalization, I can been damn happy in lux. (where I'm currently thinking of finally residing). Anyone know anything about the place? been there for along stretch of time? How's their tech infrastructure and their banking system (supposed to be good).
    #16     Jan 16, 2002
  7. C2C


    >How's their tech infrastructure :
    Decent but a bit outdated.

    >And their banking system (supposed to be good).
    Good but increasingly tied to european regulations.
    And this will get worse as time goes...

    As for the fund, remember that your customers will have to pay taxes in their respective countries...

    >2 Guilt. (Haven't you heard? Making money is bad!)
    Will be far worse in Europe, less liberal PC but more communism.
    >3 Regulations (heard of the SEC, IRS, NASD, .... they all descend
    >n you like vultures when you least expect...)
    We got far worse out there ;)
    Gigantic tax administrations, drastic exchange regulations.
    >. Bad bad corporate laws (double tax, difficulties of starting >business in actually useful places like new york - where the fees >are pretty high).
    In this respect, Paris is worse than New-York.
    And the serious drawbacks start appearing when you want to
    have employees, the labor laws are killing.

    As for starting a fund, it is a lot of problems.
    The activity is very regulated, you would need some contacts in financial institutions to help you getting some mandatory agreements. A few are available to institutions only, you would have to negociate with them...

    Well, sorry to sound pessimistic.

    I'm taxed to death and young too, but Europe is not really the place for this kind of business...

    #17     Jan 16, 2002
  8. JS11374


    Um... a pacific island is looking like a mightly good place to start a company. I wonder if anyone has thought about this. Relatively speaking, it's not that expensive to buy an island. Can't you simply declare it a independent territory, and declare yourself The President, the CEO, and the Chairman of the Board :)

    No, seriously, Europe is not a good place to start a fund. I agree with C2C fully. I like Lux because it is historically a good place for these things and it's close to all the great cultural centers. That's why I suppose it's probably a better idea to relocate to somewhere to HK (but it has its own share of problems) or some other tax-heaven-orientated nations or regions.

    - JS
    #18     Jan 16, 2002
  9. PatG


    #19     Jan 16, 2002
  10. C2C


    This is a misleading document, IMO.
    They list France at 26%.

    This rate applies to people working another job and making small profits.
    Pros gets taxed up to 64%.

    #20     Jan 16, 2002