Looking for Solutions to Reduce Taxation on Stock Investments (Europe based)

[Radko]

Hello sir, nice to meet you. First of all, I need to express my gratitude. I have read your previous introduction and I think it is very valuable to me. I hope to get your valuable advice. I will introduce my situation to you again. I am currently a German tax resident. I hope to avoid the high capital gains tax in Germany, which is about 30%. I think it is too difficult to open a Balama company. Can I set up a simple LLC in Wyoming, USA, and use it to open an IBKR account? Do you have any opinions on withdrawals and deposits? Looking forward to receiving a reply. Thanks.

Hi, yes you can open an LLC and then open an account with IBKR, plenty of people do that.

Withdrawals and deposits work the same as any personal account.

You can try to form the LLC and open the account yourself, although it's probably better to have a CPA in the U.S. do everything for you. It's up to you.

 

[fkcgt]

Hi, yes you can open an LLC and then open an account with IBKR, plenty of people do that.

Withdrawals and deposits work the same as any personal account.

You can try to form the LLC and open the account yourself, although it's probably better to have a CPA in the U.S. do everything for you. It's up to you.

Thanks for the reply.Do you have any suggestions for initial deposits and withdrawals? I am currently planning to open a wise business account or another bank account in the name of this LLC. I will use this bank to deposit funds into the IBKR account set up in the name of my LLC, and then start investing. When I need to withdraw funds, I will keep them in the bank and use the debit card provided by the bank for daily consumption. But how can I transfer money from my personal bank account to my bussiness bank account? Will this attract attention? I don’t have a lot of money, and each transfer will be less than 10k US dollars.
My budget is very tight and I would like to handle my tax issues with the IRS myself. I am not an American and will not be one in the next five years. Do you think it is feasible for me to mail the IRS a letter every year to file taxes for my LLC?Thanks a lot

 

[fkcgt]

Hi, yes you can open an LLC and then open an account with IBKR, plenty of people do that.

Withdrawals and deposits work the same as any personal account.

You can try to form the LLC and open the account yourself, although it's probably better to have a CPA in the U.S. do everything for you. It's up to you.

I'm just a student and money is very tight and I'm trying to avoid the gct in as cheap a way as possible

 

[Radko]

Thanks for the reply.Do you have any suggestions for initial deposits and withdrawals? I am currently planning to open a wise business account or another bank account in the name of this LLC. I will use this bank to deposit funds into the IBKR account set up in the name of my LLC, and then start investing. When I need to withdraw funds, I will keep them in the bank and use the debit card provided by the bank for daily consumption. But how can I transfer money from my personal bank account to my bussiness bank account? Will this attract attention? I don’t have a lot of money, and each transfer will be less than 10k US dollars.
My budget is very tight and I would like to handle my tax issues with the IRS myself. I am not an American and will not be one in the next five years. Do you think it is feasible for me to mail the IRS a letter every year to file taxes for my LLC?Thanks a lot

I'm not sure what you mean by suggestions for deposits and withdrawal? You can deposit as little as you want, there are no minimum deposits or withdrawals.

Please keep in mind that even if you open an LLC account so you can invest in the U.S., you will still have to pay taxes in Germany.
An LLC in Germany is considered a pass-through entity, so all the money that you make on your investments, you will have to pay taxes in Germany.

And, if you transfer funds from a German personal account into your U.S. LLC account, the German tax authorities will know that you have an account in the U.S.

If what you want is to not have to pay taxes in Germany, then you should move to another country, like Cyprus, where there are not taxes on foreign capital gains, interest, and dividends.

*If you still want to open the LLC account with IBKR, don't worry about the IRS. Since the LLC is a pass-through entity, you will not have to pay taxes to the IRS, there are no taxes to pay to the IRS. All taxes should be paid in Germany.

 

[fkcgt]

I'm not sure what you mean by suggestions for deposits and withdrawal? You can deposit as little as you want, there are no minimum deposits or withdrawals.

Please keep in mind that even if you open an LLC account so you can invest in the U.S., you will still have to pay taxes in Germany.
An LLC in Germany is considered a pass-through entity, so all the money that you make on your investments, you will have to pay taxes in Germany.

And, if you transfer funds from a German personal account into your U.S. LLC account, the German tax authorities will know that you have an account in the U.S.

If what you want is to not have to pay taxes in Germany, then you should move to another country, like Cyprus, where there are not taxes on foreign capital gains, interest, and dividends.

*If you still want to open the LLC account with IBKR, don't worry about the IRS. Since the LLC is a pass-through entity, you will not have to pay taxes to the IRS, there are no taxes to pay to the IRS. All taxes should be paid in Germany.

It's the fact that I don't want to pay taxes for Germany that makes me want to open an llc, so why open an llc if I still have to pay taxes? Aren't all those Goldman Sachs clients you mentioned opening IBKR accounts with an LLC because they want to avoid CGT?
I thought you were presenting a tax avoidance idea, the idea that European residents avoid capital gains tax in their home country without having to move elsewhere, which obviously can't be avoided if I'm traced for sending money to my llc bank account from my personal account.That's what I asked about deposits and withdrawals, i.e., sending money to a company account from a personal account.

 

[Radko]

It's the fact that I don't want to pay taxes for Germany that makes me want to open an llc, so why open an llc if I still have to pay taxes? Aren't all those Goldman Sachs clients you mentioned opening IBKR accounts with an LLC because they want to avoid CGT?
I thought you were presenting a tax avoidance idea, the idea that European residents avoid capital gains tax in their home country without having to move elsewhere, which obviously can't be avoided if I'm traced for sending money to my llc bank account from my personal account.That's what I asked about deposits and withdrawals, i.e., sending money to a company account from a personal account.

You misunderstood, my original post wasn't intended to show Europeans how to avoid paying CGT, it was just an easy way to open an account in the U.S. and be able to invest in the U.S. without any restrictions (Europeans can't buy U.S. ETFs if they are residing in Europe due to the restrictions imposed by the EU).
Having said that, there are many people with bank accounts in the U.S. that do not pay CGT, but that depends on the country where you live in, like Cyprus.
And yes, I'm sure there are people living in Europe that are investing in the U.S. that do not pay CGT, but that doesn't mean it is legal.

 

[fkcgt]

You misunderstood, my original post wasn't intended to show Europeans how to avoid paying CGT, it was just an easy way to open an account in the U.S. and be able to invest in the U.S. without any restrictions (Europeans can't buy U.S. ETFs if they are residing in Europe due to the restrictions imposed by the EU).
Having said that, there are many people with bank accounts in the U.S. that do not pay CGT, but that depends on the country where you live in, like Cyprus.
And yes, I'm sure there are people living in Europe that are investing in the U.S. that do not pay CGT, but that doesn't mean it is legal.

ok thanks, idont care if it is legal.of course bezos pay 1000usd tax per year was fking legal.fk the law.

 

[cuno]

Really useful thread, it’s clear there are multiple angles to approach tax optimization for stock investments when you're based in Europe.

Some have mentioned relocating to low tax jurisdictions like Bulgaria or Cyprus due to their flat tax systems. But how do these countries actually handle foreign dividend income or capital gains from US stocks in practice? Do double taxation treaties help significantly, or are there still local taxes to deal with?

The idea of using a foreign holding company to shield gains also came up. That’s interesting, but how do you handle brokerage account access and reporting under CRS? Are most brokers okay with corporate structures, or do you need more specialized setups?

There was also a mention of bridging into crypto as a form of offramping. Is that being used more as a hedge against fiat-based taxation, or is it part of a more structured exit strategy?

It seems like most solutions either involve changing your personal tax residency or building the right legal wrapper around your investments, and both come with trade offs.

Would be great to hear more from those who’ve actually implemented these strategies and how they’ve held up under scrutiny.

 

[Radko]

or Cyprus

In Cyprus there are no taxes on Dividends and no taxes on Capital Gains. That's why so many traders and investors move to Cyprus.

how do you handle brokerage account access and reporting under CRS?

Brokerage account access under an LLC is exactly the same as a personal account.
U.S. Brokers like Interactive Brokers and Charles Schwab will happily open an account for you under an LLC.

CRS doesn't depend on the structure, it depends on the country, so if you open an account in the U.S. there is no CRS to worry about.