U.S. broker for foreigners? any recommendation?

[Kristofferson]

Sorry, don't know which subforum to put my question to ... I'm a German citizen and looking for a broker that isn't participating in CRS. A friend recommended me Charles Schwab, which looks really good. However I don't have the minimum deposit Charles Schwab requires, so my question is, are there other U.S. brokers open to foreigners, that don't require that amount of minimum balance?

 

[JohnnyDoe]

IBKR

 

[Kristofferson]

I'm a customer of IBKR, but the IBKR Europe division located in Ireland, and Ireland is part of the CRS treaty.. Are you referring to IBKR USA? Not sure whether I can open an account there. IBKR automatically pointed me to IBKR Europe for being an EU citizen..

 

[JohnnyDoe]

Just use a U.S. LLC

 

[10101]

Just use a U.S. LLC

Don't you have to pay US taxes on capital gains if trading securities under an american company vs trading as foreign citizen?

 

[aniglo22]

Don't you have to pay US taxes on capital gains if trading securities under an american company vs trading as foreign citizen?

No, if it's transparent. There is a withholding tax on Dividends that varies depending on the double tax treaty (DTA) in place.

 

[Kristofferson]

My friend (as a german citizen with his Charles Schwab account) told that several years ago, Charles Schwab withheld 15% taxes on dividends, but 0% on revenues trading shares or options. So I guess it depends. But not sure.

 

[aniglo22]

My friend told that several years ago he (as a german citizen with his Charles Schwab account) was drawn with 15% taxes on dividends, but 0% on revenues trading shares or options. So I guess it depends. But not sure.

Dividends are subject to withholding tax, whereas capital gains from trading shares or options typically are not taxed for non-resident aliens. You would be obligated to tax the capital gains in your tax-residence country.

 

[Kristofferson]

Right, but my question is which non-CRS Broker doesn't require that 25k minimum balance for opening a foreigner account.

 

[lisic]

Every broker based on US is non-CRS broker.

IBKR and Charles Schwab is the only option for foreginers if you want to invest all of things like stocks, futures, forex ect as far as I know

But if you want invest just a few instruments, not all of that, you can find many brokers which are accept foreigns as their customer especially for futures or forex and some stocks etf dedicated broker.

Can you tell me which securities do you plan for investment?

 

[Martin Everson]

I'm a German citizen and looking for a broker that isn't participating in CRS.

Maybe Tastytrade

Germany is on list of accepted countries also.

https://support.tastytrade.com/support/s/solutions/articles/43000435355

 

[Kristofferson]

@Everson Tastytrade looking good, I'll gonna try to open an account!

But if you want invest just a few instruments, not all of that, you can find many brokers which are accept foreigns as their customer especially for futures or forex and some stocks etf dedicated broker. Can you tell me which securities do you plan for investment?

I'm mainly investing in equity options, index options, some stocks here and there. No FOREX or futures yet. Everson's proposal seems to be an alternative to Schwab/IBKR, no?

 

[daniels27]

With all respect, may I ask a question here. Are you resident in Germany and tax payer in Germany?

Also, why are we talking about CRS here all the time, given the FACT that US is abstaining from CRS but actively sending data under FACTA agreements? Just a gentle reminder for those that will get busted in the near future:
https://www.bzst.de/DE/Privatpersonen/Selbstauskuenfte/FATCA/fatca_node.htmlhttps://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen.msg-id-101674.html
I would be very careful with opening US accounts for the purpose of hiding in Germany.

 

[Kristofferson]

@daniels27 Both resident and tax payer. IIRC FATCA was established to receive informations about US-citizens abroad, not so much about foreigners in the U.S. The article you linked is a treaty between US and Switzerland, are you sure the brokers send actively information about revenues to German tax offices? Or guessing?

 

[lisic]

@daniels27 Both resident and tax payer. IIRC FATCA was established to receive informations about US-citizens abroad, not so much about foreigners in the U.S. The article you linked is a treaty between US and Switzerland, are you sure the brokers send actively information about revenues to German tax offices? Or guessing?

I am not very familiar with the treaty between the U.S. and Germany, but in the case of South Korea and the U.S., financial information is shared from the U.S. to South Korea under the FATCA treaty, if it involves deposit accounts that accrue interest or accounts subject to withholding tax.
There must be similar criteria for sharing financial information between the U.S. and Germany, so I recommend looking into the treaty between the U.S. and Germany in detail.

 

[daniels27]

@daniels27 Both resident and tax payer. IIRC FATCA was established to receive informations about US-citizens abroad, not so much about foreigners in the U.S. The article you linked is a treaty between US and Switzerland, are you sure the brokers send actively information about revenues to German tax offices? Or guessing?

Check the link I posted. It specifically mentions:

Gleichzeitig empfängt das BZSt durch den IRS übermittelte Kontoinformationsdaten von US-amerikanischen meldepflichtigen Finanzinstituten und übermittelt diese dann an die zuständigen deutschen Finanzämter.

Almost all brokerage accounts come with a bank account. Uli Hoeneß had to learn the hard way.

 

[daniels27]

I am not very familiar with the treaty between the U.S. and Germany, but in the case of South Korea and the U.S., financial information is shared from the U.S. to South Korea under the FATCA treaty, if it involves deposit accounts that accrue interest or accounts subject to withholding tax.

Which would include your brokerage accounts.

Even if they are not sharing now, they will very soon. And then, we are 2028 and you ask here whether the first data set transferred in 2029 (which includes all data from 5 years back) also includes the brokerage account you opened in 2024 because "we told you it is safe" but you just closed. We had these discussions:

R

Thread 'CRS for closed accounts - do previous years get reported?'

Aug 30, 2024

John is tax resident in country A but had a bank account in country B. Country B became a CRS country in 2020. John didn't receive any request to provide tax residency from the bank in 2020. But in early 2021, the bank requested John to provide tax residency. John put Country A as tax residency which is correct. John then closed the account in late 2021.

According to CRS when a depository account is closed, instead of the balance at year-end being reported, only the fact that the account was closed is reported.

So in this situation no balance would be reported for 2021, but would...

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[Kristofferson]

daniels27 Please don't insinuate tax evasion intention, with your fevered exclaims ("It is not very hard to guess what you are doing" / "you are going to jail"). I'm curious in what kind of reports take place behind my back, and I gonna ask the brokers. It isn't a crime wanting to know that.

 

[daniels27]

daniels27 Please don't insinuate tax evasion intention, with your fevered exclaims ("It is not very hard to guess what you are doing" / "you are going to jail"). I'm curious in what kind of reports take place behind my back, and I gonna ask the brokers. It isn't a crime wanting to know that.

Ok, I removed it. But to answer your question: If they are not yet reporting, they will in the very near future.

Switzerland also underwent rapid changes in the past decade:
https://www.nzz.ch/wirtschaft/das-bankgeheimnis-ein-schweizer-sonderfall-ld.1802563
And even therer, they are scared of FACTA, CRS, AIA and start to pay taxes:
https://www.nzz.ch/schweiz/schwarzgeld-in-milliardenhoehe-ld.1799647
You can find the current state in the link I posted you earlier, where there is a link to the agreement:
https://www.bundesfinanzministerium...n-FATCA-Gesetz.pdf?__blob=publicationFile&v=3You can then go to page 1368 where you see "cc)" as it indicates, all bank accounts with interest of 10 USD or more are reported and all brokerage accounts. The referenced Internal Revenue Code can be fond here:
https://uscode.house.gov/browse/prelim@title26/subtitleA/chapter3/subchapterA&edition=prelimSec. 1441. Withholding of tax on nonresident aliens is where you can start looking, there you find (b) Income items, which specifically lists dividends, profitc, etc.

Hence, CRS or FACTA, it does not matter much, they will report. Remember @jafo: "There are no mutes in prison."

 

[Xshore]

etrade opens account with no minimum for some countries, but they currently doesn't disclose what countries so you'd have to ask them or send in a (paper) application.