Where I can incorporate an investment company?

[mr00000]

Hi guys!

It is my first post here. I am a brazilian national who wants to invest in international stock market, mainly in USA, through Interactive Brokers. Basically i want to create an international portfolio (basically stocks, REITs and ETFs) to my future heirs, bypassing the inheritance tax in my assets if they value >$60,000, transfer only the shares of my company. I am totally newbie in this area, but want to incorporate in a solid jurisdiction (US and UK are good choices?), low taxes, and if possible, cheap fees to incorporate/maintain. I am not looking for anything shady or something like this, everything in my name/my family name, with low taxes (not necessarily zero) in capital gains and dividends. I really need to open a bank account or just use the IB account? US and UK are good jurisdictions for this or i should look for a tax free country like Panama? And which jurisdiction you guys recommend for banking? Thanks in advance and sorry by my English!

 

[froilo]

similar desire here.
i want to minimize the tax burden from the profits. Am EU based. Trading and investing for myself, NOT for clients, so I'd be a sole beneficiary of the company.
Maybe a UK limited company is enough? I do not need anonymity although it would be a sweet bonus.
For you @mr00000 I suggest you try , as a banking option Paysera, Revolut, monese all of them use your own IBAN number all offer corporate and private accs.

 

[JustAnotherNomad]

The IRS has a table of tax treaties. We’ve also had a thread about that before here as well.
If I remember correctly, Cyprus, Bulgaria and Romania, maybe also Hungary, were good options because there is a lower US withholding tax on dividends.
But are you sure that you can avoid the inheritance tax simply by holding the shares through a company? That would be great, but it sounds almost too good to be true.
I guess one other option could be to use a US LLC that is owned by a foreign trust.
But I’d also be really interested in hearing some input.

 

[onemansomewhere]

The best solution in this case is not a standard corporate entity. You need to form a trust.

 

[JustAnotherNomad]

Where would you form the trust and what would be the associated cost?
Could it be an issue that not all countries recognize trusts?

 

[mr00000]

Thank you for the answers! I was thinking in a solid and reputable country, which i will not expect big changes or political instabilities in next decades, because of this i was thinking in UK (cheap for incorporate, stable country and tax treaties with US). In Brazil it is possible transfer to heirs only company shares, minimizing some taxes, i don’t know in other countries. One question: if my UK (?) company only operate offshore (through Interactive Brokers US or HK) and only hold and reinvest assets, never bring money back to UK, i will pay corporate tax?

 

[TacitusKilgore]

A company incorporated in the UK is a UK tax resident - you will pay corporate tax in the UK regardless of where the company operates or keeps its money.

 

[JustAnotherNomad]

Not if it’s a non-resident UK company though. But then it can’t use tax treaty benefits either.

 

[TacitusKilgore]

Not sure if I'm missing something but I haven't heard of such a thing as a "non resident UK company". My understanding is that if it's incorporated in the UK then it is a UK tax resident full stop. Do you mean companies incorporated outside of the UK?

 

[JustAnotherNomad]

Many countries in Europe used to have high founding capital requirements for LLCs. It was quite common before to incorporate a UK Ltd. that would actually have 100% of its operations in another country. It would then be treated like a local company, circumventing the minimum capital requirement, and no UK tax would need to be paid.
And even for resident companies, PE’s and DTA’s can of course lead to a UK company paying all its taxes somewhere else. Simply incorporating a company in another country isn’t enough to save taxes.