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Best setup for trading and investing investing in us stocks and securities with no tax
- Thread starter fortunespeculator
- Start date
True.
Still getting conflicted information from tax advisors - there are some out there claiming at as some kind of grey area and for bigger amounts you can claim back from the IRS - at least here in Dubai.
Anyway depending on your investor profile an accumulating ETF can be a doable workaround here.
So a Dubai company is what is recommended
Or if i move to a territorial tax country would it work??
Or if i move to a territorial tax country would it work??
Some brokers apply full wack Withholding Tax (WHT) i.e 30% and don't give access to treaty level withholding on dividends (based on your residency). The treaty level WHT is often a lower rate i.e as low as 10%. For UAE there is no DTA with US so its always full wack 30% WHT on dividends.
https://www.mof.gov.ae/en/Strategic...oidance of Double Taxation Agreements1[2].pdf
You need to move...period. But as I said you cannot avoid WHT. However if you go with a capital gains trading strategy and not a dividend strategy and move to Dubai it would all be tax free. A territorial tax country would also work. But note that non-domicile status is best suited to passive offshore income rather than being an active trader trading onshore with an account held offshore. You need to be really careful and analyse each territorial countries non-domicile rules.
Ok this part is new,non-domicile rules of the territorial tax country.So having a dubai company and moving to say Phillipines or paraguay or Belarus works??
What a choice of countries...lol. Belarus???????? You sure about that one....lol. They are in same boat as Russia right now with loads of sanctions. Belarus residency is like North Korea residency since the conflict. Philippines and Paraguay I have not explored the tax situation there in any detail so will not comment on them.
I take it you are on a budget or maybe these are only places you can get visa due to your passport?
No these are the only places i researched,Phillipines is nearby and has its advantages,belarus was researched from before the war and if there are sanctions then they should be inviting more private capital isn't it, also its closer to Georgia where we have a lot of business from.Paraguay being closer to colombia where we do a lot of business was another choice nearby.Please feel free to add any countries that you think are good and might work for this setup.Budget is not an issue ,however i hate the hot weather in the uae.
I am not bothered about stock dividends because income will be generated by trading activity as the account will be handled by Victor Sperandeo's team
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With regards to the Philippines, it is pretty much uninteresting to apply the US-PH treaty: Withholding tax will still be 25%, compared to the standard 30%-rate.
As you said, most brokers will anyway deduct full WHT, specifically the ones in SG.
If one follows a dividend strategy, better opt for countries with zero or very low WHT. There are plenty of them with a wide selction of stable dividend payers. US stocks are best avoided in that context.
Another idea would be to look for an ETF/ mutual fund with Irish or LUX domicile which invests in US-dividend stocks.
UAE does not tax you for investing.
However the same tax consequences applies to ETF's as I mentioned for stock dividends. Best to trade Irish ETF's over i.e US and Luxembourg as under tax treaty there is no WHT. Your trading would be then completely tax free.
Martin if i understood right, on the capital gains part there is no tax to pay if i create a dubai company (And i need to live in a territorial tax country) and trade us stocks through interactive brokers or which would be the best choice broker here.
Also if i can get a passport from Antigua can it work better here??
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My response you quoted was for someone "living" in Dubai and investing in U.S ETF's unless I misunderstood @FreedomSearcher short question
.But no that's wrong what you say. A Dubai company without economic substance in Dubai would be a CFC in the territorial tax country. UAE will in fact report the UAE company to your resident country as I stated here. Active trading and UAE company with place of operation, control and management being in the territorial tax country is a huge risk. Company will likely be taxed in the territorial tax country unless the territorial tax rules explicitly allow this arrangement.
Passport has nothing to do with tax. It's where you reside unless you hold an American passport or reside under a special tax program i.e territorial tax system.
Ok I got you now.So i have to search countries with no cfc laws and having territorial taxation or get my a*s in Dubai or zero tax country- I hate that weather in Dubai.Although not desirable thanks to the same weather how is Oman in that sense?My response you quoted was for someone "living" in Dubai and investing in U.S ETF's unless I misunderstood @FreedomSearcher short question
But no that's wrong what you say. A Dubai company without economic substance in Dubai would be a CFC in the territorial tax country. UAE will in fact report the UAE company to your resident country as I stated here. Active trading and UAE company with place of operation, control and management being in the territorial tax country is a huge risk. Company will likely be taxed in the territorial tax country unless the territorial tax rules explicitly allow this arrangement.
Passport has nothing to do with tax. It's where you reside unless you hold an American passport or reside under a special tax program i.e territorial tax system.
Well there are no cfc laws in Paraguay,Georgia and Phillipines
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No idea to be honest.
Georgia does not tax personal securities income but you may want to speak to a company like BDO over there and clarify whether it includes "professional trading" of international securities. You can read their tax faq below. It could be an option.
https://www.bdo.ge/en-gb/publikaciebi/mtavari-publikaciebi/georgia-tax-facts-2022-(eng)-2
Irish ETFs pay reduced 15% WHT tax for US dividends (IE-US treaty) instead of you. But since dividends are used for reinvestment (higher fund unit price, NOT new fund units) you don't pay any additional dividend tax (beside that 15%).
It does tax personal securities income (dividends and capital gains alike). There is just one exception and that is foreign (i.e. non-Georgian) securities.
General consensus among serious lawyers and tax advisors with regards to foreign securities:
- "Professional trading" -> "Professional" -> "income taxation"
- "trading" -> "Professional" -> "income taxation"
You are usually considered to be on the safe side after six months.
Aside from the above, the tax code still provides for tax free capital gains after a holding period of two years for private individuals which is useful for domestic securities.
Condition: The relevant asset has not been used for the purpose of "economic activity". Cashing in on dividends is usually not considered "economic activity".
In short, if you want to sleep well, forget Georgia for the purpose of securities trading with high turnover. You will run into significant problems with huge cost risks taxation wise.
Any alternative countries that you recommend.Trading will happen from company account.
Regarding trading from company account: No, nothing I can seriously recommend.
Except to switch to trading as a private individual which gives you far more options and flexibility.
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