List of Countries with 0% WHT on dividend-paying stocks to non-residents taht are accessible on Interactive Brokers

[JustAnotherNomad]

Because if you live in the UAE and buy the stock on a UK exchange, that makes you a UK investor?

 

[Bl4ckJackk]

Regarding Synthetic ETFs is all about how much risk you can tolerate, given that everything that can go wrong will eventually go wrong, I will stay away from Synth. ETFs (I've already had two banks failing on me, liquidation, so I would stay away from banks and only deal with brokers, they are safer and you'll get SIPC protection in the US.)

Regarding getting a Professional account with IBKR is a cynical game of checking two of the options they give you, it's that simple.
Charles Schwab will also let you open an account if you are living in the EUSSR, I haven't checked the requirements needed to let you buy US based ETFs but they shouldn't be much different.
There are other brokers, US based Brokers, that will work with you even if you are living in the EUSSR, I made a list with all of them but I don't have it with me at the moment.
Fidelity will also let you open an account, so you have a few options there (if you're going to buy international stocks and ETFs then IBKR is better, cheaper. If you are only going to buy US stocks and ETFs then Charles Schwab is cheaper, but you can only transfer USD, as you know with IBKR you can have a bunch of different currencies.)
You can always open two accounts, one with IBRK and another one with Charles Schwab, you can transfer securities from IBKR to Charles Schwab but not the other way around.
I'm with Charles Schwab and Fidelity as I only invest in the US, both are great.

IBKR, Charles Schwab, and Fidelity have SIPC protection, so you'll be OK, besides the chances of one of those brokers collapsing are close to zero, but even if they do you'll be protected.

Tastyworks will also let you open and account.

oh so you are saying that you are a citizen of EU/UK and charles schwab/fidelity still let you buy US domiciled ETF's with any mifid or priips limitations? Are you doing this yourself? That is pretty cool if so. The only annoyance would be having to convert EUR or other currency to USD if they only work with that, which would introduce fees, but I can still use IBKR for the conversions since their fees and rates for FX are pretty unbeatable. Then it is just minimizing the SWIFT transfer fees from IBKR to Charles Schwab. Maybe Wise offers cheap services for this, my bank charges 1% for incoming USD SWIFT payment which is pretty disgusting.

 

[Deepbarrels]

And as far as Canadians investing via a registered account I can tell you that I have a couple of friends from Canada that are doing that and yes there is no withholding from the IRS, but if I'm not mistaken they are limited to an amount of investments they can keep on that registered account, obviously they try to maximize that every year as much as they are allowed, but I don't think they can have whatever amount of money they want invested via that registered account.
I don't know if someone that is not Canadian could open an account with a Canadian Broker and try to open a registered account, probably not, that would be a nice loophole! However the two Canadian guys that I know are now living in Panama and are allowed to have those registered accounts even if they are not residing in Canada, and as far as I know they don't have an address in Canada anymore, both of them sold their homes before they moved to Panama, which makes me wonder....

From what I've read, one needs to be have a social security number, to open a registered account. The amounts are limited to a small % of your declared income from the previous year and once you become a non-resident you can keep the account but can not add any more funds to it.

 

[Radko]

From what I've read, one needs to be have a social security number, to open a registered account. The amounts are limited to a small % of your declared income from the previous year and once you become a non-resident you can keep the account but can not add any more funds to it.

Thanks, great information!
I always wondered about that.

 

[Cloudbanck]

Say the fairly typical situation (on this forum) that one is a non-US citizen and lives in a tax haven country and has a US LLC. Is it best taxwise in this case to invest in US stocks and ETFs as an individual, or via the US LLC?

 

[Radko]

Say the fairly typical situation (on this forum) that one is a non-US citizen and lives in a tax haven country and has a US LLC. Is it best taxwise in this case to invest in US stocks and ETFs as an individual, or via the US LLC?

I asked myself that same question a while back, and it is better as an individual.
If you live in a country where you don't have to pay capital gains tax on foreign earned money, then you will not pay anything as an individual in your country of residency and in the US, also nothing with an LLC, but when it comes to the withholding rate on dividends, as an LLC the US will keep 30%, as an individual the US will keep whatever the double tax treaty they have with your country of residency, so if you live in Colombia and many other countries the withholding rate will be 15%, if you live in Mexico, it's 10%, if you are in Dubai then it will be the same as an LLC, 30% (UAE doesn't have a double tax treaty with the US.)
So no capital gains tax with an LLC, or as an Individual (non-US citizen, non-US Resident) and withholding rate on dividends is based on the double tax treaty that the US has with your country of residency (just make sure you give your broker a W8-Ben form, otherwise the US will keep 30%)
At least this is how I see it.

 

[JustAnotherNomad]

Is it best taxwise in this case to invest in US stocks and ETFs as an individual, or via the US LLC?

In theory, it shouldn't make a difference, but it would probably be easier to just do it as an individual to make sure the withholding is done right by the broker.

 

[TheCryptoAnt]

old thread somewhat ik but related question

To the ones using an LLC with IBKR and an address in Georgia.

How did you register this? Did you just upload a proof of address showing a Georgian address and that was it?
Did they ask for a tax ID number?

 

[Mike Williams]

Very useful information and research - thank you

In theory, it shouldn't make a difference, but it would probably be easier to just do it as an individual to make sure the withholding is done right by the broker.

You need to be very careful with the US Estate tax whether held personally or in a US LLC. Unless the country you are resident of have an Estate treaty (approx 20 countries only) you will only have a $60,000 exemption and anything over that can be taxed at up to 40%. Stocks held in a foreign company are not subject to the estate tax but as per the IBKR web site will be subject to withholding tax. So they are getting their money in the end.

 

[Mike Williams]

Honestly I can't thank you enough for taking the time to do all that research and then posting all that information here, I did a lot of research on the subject and I never found out so much information, I did get to find out about those few countries that have a 10% withholding from the IRS, so I moved there (Mexico) and became an Expat living off of the dividends, plus some trading that I do on the side just to make a bit of extra money and reinvest most of the dividends that I get.

I'm going to do some research on those other countries that have 0% withholding on dividends but it's not going to be easy trying to beat the US market, maybe I'm wrong but getting consistently 10%~11% return on your fixed income investments while keeping the risk as low as possible is not easy to accomplish in some of those foreign countries with 0% withholding rate, obviously they are trying to give an incentive for people to come and invest in those jurisdictions, I guess the US can care less, they already have enough investors as it is.
Trying to keep track of individual companies is some jurisdictions could be very challenging, so I will try to find ETFs that invest in sectors such as the banking sector of that specific county, probably sticking to the UK, HK, and Singapore would be the ideal thing to do just to be safe, those three countries have pretty good regulations that may not exist in other jurisdictions that also have 0% withholding rate on dividends, so I will start with ETFs based in the UK, HK, and Singapore, I don't have an account with IBRK but I can always open one, I'm with Charles Schwab.

The US and Canada have an insane amount of ETFs that are tailored to fixed income investors that are trying to maximize the amount of money they make now, as opposed to in the long-term, even though as you very well pointed out investing long-term looking for capital gains will be more profitable than fixed income, although we can all agree that this past decade where we've had interest rates so low, plus all the money printing, has fueled the stock market to unprecedented levels, so maybe the next decade won't be nearly as profitable for those investors that are fully invested in growth stocks, time will tell, for now I prefer a dollar in my pocket than the promise of 5 dollars in the future.

So we have option A and option B,

I think option A is restrictive, you are restricted to those specific US corporations that were in existence before January 1, 2011 and on top of that they have to meet the criteria described.

Option B, could you please clarify what you wrote, I'm not sure I'm following "if the stock or fund takes its capital gains and/or interest income and pays it out as a dividend to the investor."

By the way I did read about accumulating funds that don't immediately pay out dividends, I'll do more research as well, thanks for reminding me of that.

And as far as Canadians investing via a registered account I can tell you that I have a couple of friends from Canada that are doing that and yes there is no withholding from the IRS, but if I'm not mistaken they are limited to an amount of investments they can keep on that registered account, obviously they try to maximize that every year as much as they are allowed, but I don't think they can have whatever amount of money they want invested via that registered account.
I don't know if someone that is not Canadian could open an account with a Canadian Broker and try to open a registered account, probably not, that would be a nice loophole! However the two Canadian guys that I know are now living in Panama and are allowed to have those registered accounts even if they are not residing in Canada, and as far as I know they don't have an address in Canada anymore, both of them sold their homes before they moved to Panama, which makes me wonder....

I have a question for you - is IBKR not reporting your income back to Mexico. With all needing an RFC number now in Mexico is this not an issue for you? And there is no estate treaty with Mexico

 

[Radko]

I have a question for you - is IBKR not reporting your income back to Mexico. With all needing an RFC number now in Mexico is this not an issue for you? And there is no estate treaty with Mexico

I am aware of the fact that Mexican tax authorities are requiring foreigners living in Mexico to get an RFC, BUT US brokers and US banks, under FATCA, are only required to report those accounts that earn more than $10 in interest, but they are not required to report dividends or capital gains that you made from your US brokerage account (dividends are withheld at 10% by the IRS based on the double tax treaty the US has with Mexico.)

So don't invest on any type of investment products, i.e. CDs, that will generate more than $10 in interest.

Now, whether the Mexican tax authorities, SAT, is actually checking that information when they receive it from the IRS, I don't know. Personally I don't know anyone that has been contacted by the Mexican tax authorities regarding their US brokerage account after generating more than $10 on interest.

But if you want to follow Mexican tax laws then you are required to tell them about all the interest, dividends, capital gains, and income that you make in the US, or in any other country around the world if you spend more than 183 days per year in Mexico.

There are other countries where you can legally avoid paying taxes on all your foreign investments as they only have a territorial tax system, such as Thailand, Costa Rica, Panama, Paraguay, Dubai, and many others.

Sadly Mexico taxes on your world wide income and investments as you know.

*This is not tax advise.

 

[Mike Williams]

I am aware of the fact that Mexican tax authorities are requiring foreigners living in Mexico to get an RFC, BUT US brokers and US banks, under FATCA, are only required to report those accounts that earn more than $10 in interest, but they are not required to report dividends or capital gains that you made from your US brokerage account (dividends are withheld at 10% by the IRS based on the double tax treaty the US has with Mexico.)

So don't invest on any type of investment products, i.e. CDs, that will generate more than $10 in interest.

Now, whether the Mexican tax authorities, SAT, is actually checking that information when they receive it from the IRS, I don't know. Personally I don't know anyone that has been contacted by the Mexican tax authorities regarding their US brokerage account after generating more than $10 on interest.

But if you want to follow Mexican tax laws then you are required to tell them about all the interest, dividends, capital gains, and income that you make in the US, or in any other country around the world if you spend more than 183 days per year in Mexico.

There are other countries where you can legally avoid paying taxes on all your foreign investments as they only have a territorial tax system, such as Thailand, Costa Rica, Panama, Paraguay, Dubai, and many others.

Sadly Mexico taxes on your world wide income and investments as you know.

*This is not tax advise.

Thank you for your response

 

[TheCryptoAnt]

old thread somewhat ik but related question

To the ones using an LLC with IBKR and an address in Georgia.

How did you register this? Did you just upload a proof of address showing a Georgian address and that was it?
Did they ask for a tax ID number?

up

 

[bio]

As a UAE tax resident, non-US citizen, with a US IBKR account, if I invest in Singapore stocks via IBKR will I pay any withholding tax on dividends?
There are some interesting high-dividend yield Singapore stocks.

 

[WorldCitizen99]

As a UAE tax resident, non-US citizen, with a US IBKR account, if I invest in Singapore stocks via IBKR will I pay any withholding tax on dividends?
There are some interesting high-dividend yield Singapore stocks.

Singapore doesn't have WHT on dividends
I don't think the fact that your IBKR acct is registered with the US and not Singapore/UAE makes you liable for any taxes

 

[JimBeam]

As a UAE tax resident, non-US citizen, with a US IBKR account, if I invest in Singapore stocks via IBKR will I pay any withholding tax on dividends?
There are some interesting high-dividend yield Singapore stocks.

No, as I can see here:

United Arab Emirates - Corporate - Withholding taxes

Detailed description of corporate withholding taxes in United Arab Emirates

taxsummaries.pwc.com

There is a DTT between UAE and SG