I'm a Canadian who would like to open an account with a US broker. I need to set up a US corporation. (IB Canada is not an option) What is the best way to accomplish this? If I do the trading from Canada (head office in canada): 1) Will I continue to pay tax to the Canadian government? Any advice would be appreciated.
Do you know that many US brokers will accept or already accept Canadian and canadian corporation, this could be an alternative before to do it. Check the number of US brokers announcement in the next week, you could be surprise by the list.
Are you sure you really need a US corp? There are plenty of foreign citizens that have US accts. They fill out a W8 form (non resident alien) when they open the account.
No doubt about this fact, if you want open an account, many countries will accept that you open an account in the USA, except Canada that have made special rules for to limit canadian. The good news is that many US brokers have now a canadian office and should accept them in very near futur (August and September).
Canadians can't open account with many US Brokers. Those brokers who do allow Canadians (IB) must follow the IDA's margin requirements which are brutal compared to US margin requirements. thanks for the responses.
I agree with you that IDA have only 2:1 leverage rather than 4:1 with SEC (Fed) rules, but until the last september, it was also only 2:1 for them. I hope that IDA will modified they rule for to follow the US standard.
it's not merely a stock margin issue (4:1 or 2:1 issue). Margin requirements for option positions in Canada are a complete joke. When I was on the floor on the TSE (back in 1990) I was attempting to get the margin requirements fixed to properly reflect the according risk. To this day, nothing has changed. Spreads etc are treated incorrectly. In many cases the margin requirements are 10 X's greater in Canada.
in terms of the IDA matching the SEC, i wouldn't hold my breath. Changes in Canadian securities regulations move about the speed of a snail. In regards to a corp account, why not open an offshore account, then open the brokerage account through that account? They're not as expansive as you might think. If you are to open a US account, look to Florida and Nevada - no state taxes. For specifics of any plan, i would advise you get a good lawyer and accountant experienced in these matters.