Possible structures to minimize one's taxes?

[FREE CITIZEN]

Becoming a non-resident of Canada, looking for ways to optimize my taxes and obtain some privacy / freedom in the process.

Let's say I was to take advantage of the Malaysian Sarawak visa (S-mm2h) and become a resident of Malaysia (a territorial tax country). I then I transfer all my money out of Canada into a bank in Malaysia. Then after residency is finalized I set up a USA LLC and have it control my investments via a international brokers account. (can I set up a IBKR account under a USA LLC?)

Would this setup work? Would there be no reporting back to Canada (or Malaysia) as the USA is not part of CRS?

Would a structure like this give me tax optimization and some privacy / asset protection?

Would another structure or countries be more ideal or recommended?

A few more questions:

-If I have paid all my taxes and I converted my money into crypto and sent it abroad would that sever the info time line for Canada (ie having no idea where it went) or would there still be reporting?

-What reporting would be initiated if I just sent it normally?

-If the money left the bank account in Malaysia before December 31st would there still be a report from the Malaysian bank back to Canada?

Thanks again for your time.

 

[icecold]

If you are not a resident of Canada any longer you want get any trouble with the Canadian authorities. Very simple, but you want to speak with a tax advisor to make sure how you exit from your country.

 

[Sols]

Would this setup work?

In your other thread, you've mentioned a hypothetical threat where Canada changes its tax laws and starts going after non-resident citizens.

If that isn't the threat here and we're talking about present day Canada: yes, this would work.

Would there be no reporting back to Canada (or Malaysia) as the USA is not part of CRS?

CRS is based on residence. Reporting by citizenship is rare and usually limited to situations where there is doubt. If you clearly and demonstrably live in for example Malaysia, CRS reports would go there.

Would a structure like this give me tax optimization and some privacy / asset protection?

It sounds like you would be subject to Malaysian tax law, which offer tax advantages.

What privacy are you after? Malaysia won't share your tax returns with anyone, unless a court says so.

Asset protection is tailored around a specific threat. It's not a byproduct of anything.

-If I have paid all my taxes and I converted my money into crypto and sent it abroad would that sever the info time line for Canada (ie having no idea where it went) or would there still be reporting?

Maybe.

-What reporting would be initiated if I just sent it normally?

Maybe.

-If the money left the bank account in Malaysia before December 31st would there still be a report from the Malaysian bank back to Canada?

That risk only exists if you are resident in Malaysia or have given the bank reasons to question your genuine residence.

 

[FREE CITIZEN]

Thank you for the replies... I really appreciate it.

I guess what I am trying to say is since I desire to become a non resident of Canada and Malaysia is a territorial tax country. My desire is on how would I set up my investments so that they are not considered Malaysian income.

Is setting up something like a USA LLC and have that control my investments qualify or is there another possibility or more efficient way? (for territorial tax countries or countries that have no to low capitol gains taxes, etc)

I qualify for the Malaysia visa with a pension and Malaysia has a tax treaty with Canada so I pay the same in taxes as if I stayed in Canada (15%). For example if Dubai had a similar treaty I would just get residence there and call it a day knowing I could invest tax free. Unfortunately Canada would withhold 25% tax on my pension, so I am looking at options that give me the lowest taxes on my pension, while optimizing the taxes on my investments (capital gains, dividends, etc).

Malaysia Also seems to offer a good quality of life, and seems like a good home base, that being said I enjoy travel, and would likely be there for only 3-4 months a year. However, right now, till I figure out my options it is only the leader in the club house, I have yet to make a decision. H
ence why I am here, to pick peoples brains and get a familiarity with my situation and it's options.

I will be seeking out some professional advice in the next 2-3 weeks, just looking at educating myself so A) I know I am getting good advice from the advisor, B) ask important and educated questions, to further help him understand what it is I want and if it is possible, so I don't waste his time.

While privacy is important, my desire for reducing my government's knowledge of where my money goes while leaving the country with me, (if I am being honest with myself) may have it's roots in my distrust of my present day government. Their desire to spend the country into oblivion so they can "cure" all the social "wrongs" from just about every special interest group that they think will vote for them, leading to possibly ever more aggressive forms of broadening the tax base to pay for it. Am I wrong?... quite possibly... But is it wrong to try to be proactive just in case? I can accept that it is not viable or I am being unreasonable, but I just wanted to ask.

I hope this makes sense.

Thanks again.

 

[Sols]

Is setting up something like a USA LLC and have that control my investments qualify or is there another possibility or more efficient way? (for territorial tax countries or countries that have no to low capitol gains taxes, etc)

Malaysia changed parts of its tax code January this year. This change apparently included some major changes to the old territorial taxation system. In general, income received into Malaysia is now taxed (akin to the system in Singapore/Brunei). Seems an exceptions exists for personal income and dividend income for companies, although that exceptions is set to expire 2027.

The situation in Malaysia appears unclear at the moment. Best to speak with a local tax adviser who is aware of not only the current situation but what the likely next steps are.

 

[backpacker]

Malaysia Also seems to offer a good quality of life, and seems like a good home base, that being said I enjoy travel, and would likely be there for only 3-4 months a year. However, right now, till I figure out my options it is only the leader in the club house, I have yet to make a decision. H
ence why I am here, to pick peoples brains and get a familiarity with my situation and it's options.

Malaysia offers comparitelvly good quality of life. Infrastructure is top-notch for SE-Asia standards ....
However, I highly doubt you will enjoy Sarawak. That part of the country has absolutely nothing to do with bustling mainland/KL. It is one of the reasons why the government continues to offer the MM2H in an unamended form only for Sarawak.

Do yourself a favour and look into Thailand or the Philippines instead.
The Philippines offers a much cheaper program with clearer rules (Special Resident Retirees program for everybody > 50 years of age) and, with the new government under President Marcos, is a lot more stable than what you have in MY.
There is also a DTA between the Canada and the Philippines. Moreover, the Philippines offers territorial taxation to resident aliens. Due to the large Philippine diaspora flight connections between PH and CA are much better than with MY.

Thailand is another option, albeit much more expensive than the Philippines. Furthermore, the do not offer permanent residency: Onle Taxation wise it is not as clear cut as PH. For instance, everything related to crypto is taxed locally because TH considers crypto to be with you.

 

[Marzio]

It is one of the reasons why the government continues to offer the MM2H in an unamended form only for Sarawak.

Sarawak MM2H rules changed on august 25 and new rules are effective from september first.

Now it's even less appealing than before.

 

[Mercury]

Thailand is another option, albeit much more expensive than the Philippines. Furthermore, the do not offer permanent residency: Onle Taxation wise it is not as clear cut as PH. For instance, everything related to crypto is taxed locally because TH considers crypto to be with you.

Regardless of crypto tax enforcement (close to none as a foreigner residing in Thailand), if a TH resident holds his cryptos on a CEX, keys technically belong to the CEX. Therefore, cryptos are held where the CEX is legally registered. Then it's easy to select one headquartered outside of Thailand.

 

[backpacker]

Now it's even less appealing than before.

Indeed.
It confirms that MY has become extremely hostile towards foreigners. Not surprising with the current government.

Regardless of crypto tax enforcement (close to none as a foreigner residing in Thailand), if a TH resident holds his cryptos on a CEX, keys technically belong to the CEX. Therefore, cryptos are held where the CEX is legally registered. Then it's easy to select one headquartered outside of Thailand.

Wrong approach!
Thai crypto taxation has been discussed at length in this forum. Please read it up again.

 

[Mercury]

Wrong approach!
Thai crypto taxation has been discussed at length in this forum. Please read it up again.

Indeed and we agree to disagree on that point.

Whatever. Rules/laws are irrelevant if strictly unenforced.

 

[JackAlabama]

Malaysia offers comparitelvly good quality of life. Infrastructure is top-notch for SE-Asia standards ....
However, I highly doubt you will enjoy Sarawak. That part of the country has absolutely nothing to do with bustling mainland/KL. It is one of the reasons why the government continues to offer the MM2H in an unamended form only for Sarawak.

Do yourself a favour and look into Thailand or the Philippines instead.
The Philippines offers a much cheaper program with clearer rules (Special Resident Retirees program for everybody > 50 years of age) and, with the new government under President Marcos, is a lot more stable than what you have in MY.
There is also a DTA between the Canada and the Philippines. Moreover, the Philippines offers territorial taxation to resident aliens. Due to the large Philippine diaspora flight connections between PH and CA are much better than with MY.

Thailand is another option, albeit much more expensive than the Philippines. Furthermore, the do not offer permanent residency: Onle Taxation wise it is not as clear cut as PH. For instance, everything related to crypto is taxed locally because TH considers crypto to be with you.

Thailand is not that much more expensive than Philippines. Especially rent due to infrastructure issues in PH.
Thailand has by far the better infrastructure, way less crime, better healthcare than PH and also the local food is a lot tastier.

A big plus which drew me to the Phils years ago was its cheap visa (20k usd bank deposit) which was hard to beat. However that is gone and I would buy the Thai elite card every day.

 

[backpacker]

A big plus which drew me to the Phils years ago was its cheap visa (20k usd bank deposit) which was hard to beat. However that is gone and I would buy the Thai elite card every day.

Well, it's still there. They just increased the minimum age from >35 to >50.

Thai Elite is perhaps an option for people who are not able to get an extension of stay (based on retirement).
Overall I find Thai Elite a complete rip-off since it gives you exactly nothing: It is a simple tourist visa, nothing else.
Btw., try to open a bank account in TH with this Thai Elite visa or show it to an overseas bank by claiming TH to be your permanent residence - you will have a lot of fun.

The Philippines are not without challenges. Main problem is infrastructure. However, these deficiencies are not significant enough to pay a xenophobic country like Thailand THB 2'000'000.- for a simple tourist visa .

Note, Thai Elite is something you buy (for THB 2'000'000.-).
The Philippine SRRV is just a bank deposit (USD 10'000.- with pension or USD 20'000.- without pension) which you can claim back when you want to cancel your residence permit (money will be returned to you within 6 weeks).

 

[RealDude]

I see the Thai Elite Visa as a kind of natural selection, as are the health insurance requirements. Not every bum gets into the country, in the future.

 

[backpacker]

I see the Thai Elite Visa as a kind of natural selection, as are the health insurance requirements. Not every bum gets into the country, in the future.

Thai Elite is an option for people who do not know any better.
It is pretty easy to stay in TH long term with the much more productive investors' visa. Even though that visa is also far overpriced.
Anyway, TH has made itself very unattractive. If one does not not like the nearby alternative option (Philippines), he/she should look into Middle Eastern countries. Dubai offers more for less money when it comes to permanent legal residency and tax residency.

 

[Mercury]

Thai Elite is an option for people who do not know any better.
It is pretty easy to stay in TH long term with the much more productive investors' visa. Even though that visa is also far overpriced.
Anyway, TH has made itself very unattractive. If one does not not like the nearby alternative option (Philippines), he/she should look into Middle Eastern countries. Dubai offers more for less money when it comes to permanent legal residency and tax residency.

Misleading information. Please provide detailed figures about your Dubai being cheaper than Thailand regarding residence statement.

Depending on each one specific situation, for people of 50+ yo it's way cheaper to become TH resident via Thai retirement visa + yearly Extensions of Stay.

Financial Requirements for a Retirement Visa application/Extensions of Stay (to renew each year) :
- Thai Bank Account showing THB 800,000 (USD 22,000) at least 2 months prior to making your application (money can be used freely after visa/extension approval), or Monthly income of at least THB 65,000 (USD 1,800 - income affidavit from your embassy in Bangkok) or Combination (Bank Account + Annual Income = THB 800,000)

KPMG: "A resident of Thailand for tax purposes refers to an individual who is present in Thailand for a total of at least 180 days in a given tax year (being the calendar year). The general rule is that a person who is either a resident or non-resident of Thailand is assessable on income derived from sources in Thailand."

 

[backpacker]

Misleading information. Please provide detailed figures about your Dubai being cheaper than Thailand regarding residence statement.

Considering your dubious approach towards law & taxes (post #10) I am not surprised that you "overlooked" the following:

Thai Elite is perhaps an option for people who are not able to get an extension of stay (based on retirement).

That said, comparing a Thai extension of stay (for >50) with legal residency/tax residency in Dubai (possible for anybody) is hilarious at best. I suggest you study the different legal approach.
Moreover, in Dubai you do not need to buy a tourist visa for a crazy amount. In Dubai you invest your money and in return get what you need (has been discussed at length).
Conclusion: Dubai offers more for less.

Btw., try to get a Tax Residence Certificate in Thailand

 

[RealDude]

But its possible to get a Tax Residence Certificate in Thailand?

 

[backpacker]

But its possible to get a Tax Residence Certificate in Thailand?

A person who resides in Thailand on a simple "Extension of Stay" (these are the >50 year old) or a tourist visa like "Thai Elite" will not be considered.

 

[Mercury]

But its possible to get a Tax Residence Certificate in Thailand?

A person who resides in Thailand on a simple "Extension of Stay" (these are the >50 year old) or a tourist visa like "Thai Elite" will not be considered.

Simply Wrong.

Thai Residence Certificate requirements

I know personally people (mainly retirees but not only) who get tax residence certificates.
Just walk-in the Revenue Department and ask for one holding a valid non-immigrant visa/extension. You may need to fill a tax income return (even with THB 0) to get this paper but you will eventually get one as long as you are legally living in Thailand and can prove it.

Moreover, unlike the West, in Thailand there's always a solution to get things done.

 

[backpacker]

Simply Wrong.

Thai Residence Certificate requirements

I know personally people (mainly retirees but not only) who get tax residence certificates.
Just walk-in the Revenue Department and ask for one holding a valid non-immigrant visa/extension. You may need to fill a tax income return (even with THB 0) to get this paper but you will eventually get one as long as you are legally living in Thailand and can prove it.

Well, if you say so ....

As a matter of fact, you first need a tax number. In order to get a tax number you need to register. This is possible with turnover only.
Second step is the tax income return: An income return with 0 is not applicable.

Furthermore: An Extension of Stay is not a visa.

With an Extension of Stay or a tourist visa like Thai Elite you will officially not get anything from the Revenue Department, except you are able to produce income (see below):
There is a way to produce local taxable income by exceeding a certain threshold of interest on a term deposit. This was used by some people to get a tax number. It still did not give them a Tax Residence Certificate (TRC).

Again: A TRC is not applicable without economic activity. The legal position to be considered to apply for a TRC is the investors' route as briefly mentioned in post #14.

Moreover, unlike the West, in Thailand there's always a solution to get things done.

This again disqualifies your post.
Stop posting these dubious suggestions which are misleading at best