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paulsnail

New member
I am trying to find the right plan of attack. US citizen here. I have never considered alternatives to the straight and narrow path of paying taxes. I don't mind paying taxes but have had some bad experiences which I would like to avoid in the future (such as paying taxes on trading gains I ultimately lost). Additionally, I want to settle with creditors on a large loan and would like to transfer assets out of my name.

For these and other reasons, I would like to move my trading activity offshore, I think. Actually I don't really know what to do at all and have been trying to educate myself. I also don't know who to trust.

Currently, I'm thinking I could set up a corporation in a reputable jurisdiction (someplace other than Seychelles, etc.) and open an IB account. I like IB for their prices and trading interface and I've learned to trust them. I could set up shop elsewhere, but IB is currently my top pick of brokers.

Comments on where to incorporate, which brokers to use, and if this plan is remotely sound at all.
 

Sols

Staff member
Mentor Group Gold
You're a US citizen. That means you have to pay taxes on your global income, even if you move to another country. You might want to read up on FATCA and FBAR. The IRS makes the CIA look weak in comparison. ;)

As for asset protection or protecting yourself from creditors, you don't have to look outside of the US necessarily. Look into trusts in states like South Dakota and Wyoming. Speak with South Dakota Trust Company. There are others but they're a good starting point.

That said, there are still American opting for overseas trusts. If you want reputable, I'd start with the UK territories (Cayman, BVI, Isle of Man, Channel Islands) and Liechtenstein primarily. Caymans are very popular with Americans. You're not looking at any tax savings, but you might be able to keep creditors and frivolous lawsuits at bay. Begin your research by speaking with people from the offshore magic circle legal/corporate service providers. Google the term and you'll find them.

Cook Islands are a moderately reputable jurisdiction for trusts and Southpac Trust is the biggest trustee and service provider there. Might be worth speaking with as well.

I've heard of Americans being able to avoid creditors through something as simple as setting up a LLC in Nevis. Although I seem to recall one case of a Floridian who had a Nevis LLC but because the LLC banked in the US, the creditors were able to claw back funds from the bank directly. Don't remember the exact details. But a corporation alone may not be enough, depending on the exact nature of your situation.

Whatever solution you go for, make sure you discuss with a qualified US legal practitioner/fiduciary.
 

paulsnail

New member
Thank you so much Sols, for taking time out to respond. I appreciate it.

Those are great leads you gave me and I will follow up on them.

I thought profits of a non-controlled foreign corporation in an offshore jurisdiction are immune to tax liability here in the US. So if I set up a corporation beneath that critical threshold of American beneficial owners, I avoid a tax bill here, effectively. But without any direct ties to one's own money, there would seem to be minimal recourse against mismanagement. What is the best overall solution for separating oneself from one's money for both tax avoidance and the appearance of poverty?
 

jafo

New member
I am trying to find the right plan of attack. US citizen here. I have never considered alternatives to the straight and narrow path of paying taxes. I don't mind paying taxes but have had some bad experiences which I would like to avoid in the future (such as paying taxes on trading gains I ultimately lost). Additionally, I want to settle with creditors on a large loan and would like to transfer assets out of my name.

For these and other reasons, I would like to move my trading activity offshore, I think. Actually I don't really know what to do at all and have been trying to educate myself. I also don't know who to trust.

Currently, I'm thinking I could set up a corporation in a reputable jurisdiction (someplace other than Seychelles, etc.) and open an IB account. I like IB for their prices and trading interface and I've learned to trust them. I could set up shop elsewhere, but IB is currently my top pick of brokers.

Comments on where to incorporate, which brokers to use, and if this plan is remotely sound at all.
Did you ever find a solution to this? I'd be interested to find out. Looking for similar things for a family member who is a US citizen. (I'm not)
 

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