No problem, this thread was very helpful to me as a long time silent observer, so I wanted to pass on the info to help those who are successful traders.
What you posted above about the brokers you have spoken to being ok with US management/ownership if bank is outside US is great. That was the 1 thing I was unsure of. It makes sense since US management + ownership of foreign entity is a typical hedge fund setup and transacting directly with US bank accounts is a major issue on their part to remain in compliance with FATCA.
Tallinex was a warning shot. Unfortunately, the CFTC seems to be on a mission to remove all domestic & foreign competition to the CME, and can shut down our income at any moment in the future by targeting the few remaining reputable brokers accepting personal US accounts.
Recently, I have contacted Pepperstone Australian reputable broker (pepperstone.com) about opening account account with offshore CORP/LLC. They told me as longest the business and banking is registered outside US, it will be no problem. They said the beneficiary can live in the US, and that I will need either US Passport or ID, and energy bill or phone bill verifying beneficiary identity.
And of course, all the business and banking paper work.
When I visited apintertrust.com I noticed that, they will only provide assistance with opening bank account for your offshore business. It seems there is no guarantees.
I have heard before that sometimes there are problems with opening corp bank account for beneficiaries that live in US.
My “information” may be slightly out of date, but as far as I’m aware there are no great difficulties involved in opening company bank accounts for US-owned companies in either Gibraltar or the British Channel Islands, which are both financial services havens in which international banking is one of the local industries.
I received an email from FXChoice today, saying:
Dear clients,
With regret, we are writing to inform you that from 15th March onwards we will temporarily be unable to accept any card deposits from our US/Canada-based clients.
We apologise for this development and urge you to make deposits via one of our many other safe, fast and reliable methods.
Should you have any questions about this, please do not hesitate to get in touch with us via our Live Chat.
You can use the site below to contact the local branch offices of banks in international financial center jurisdictions (hedge funds, brokers, banks) with US double taxation treaties or no non resident tax (Virgin Islands, bahamas, Cayman, Belize ect.) and simply ask their requirements for a business account for an offshore IBC.
Do they open business bank accounts for US owned international business companies (IBC)?
Is personal visit required?
What do they require for verification?
Can verification be done @ US branch office?
Minimal capital required to open?
Online banking & international wires, debit card, checkbook available?
list of maintenance, wire in & out, debit, draft check, online banking fees.
Most will require a personal visit, however verification often times can be done at US branch offices for multi-national banks.
A person very familiar with offshore banking and offshore FX brokerage issues has emailed me some information that is pertinent to this discussion. This source has requested anonymity, because he does not want to call the attention of U.S. authorities to his bank. And I will absolutely honor his request.
The following information comes from this source, whom I trust. You will have to decide for yourselves whether to take this information at face value.
Edit:
After posting my (re-worded) version of the information emailed to me, I got a second email from my source, taking me to task for distorting some of what he had said. He clarified some things in his second email, and I promised to correct what I had posted here.
I have decided not to try to patch up what I posted here on Monday. Rather, I will basically copy-and-paste what my source has written, blending his two emails together, editing out the redundancies, and organizing it into three paragraphs with headings (that I have added in bold type).
I hope this fix meets with his approval. And for all of you reading this post, I hope that you will find the following to be clearer than what I posted on Monday.
• • •
Offshore companies dealing with FX brokers
FX brokers do not care about the residency of the beneficial owner and/or director of an offshore company. LLCs / Limited companies are legal entities in their own right so the residency of the owner should not be a factor.
Sensible brokers have no issue with offshore entities - regardless who the beneficial owner is.
Offshore companies dealing with banks
However, the number of banks willing to offer banking facilities to offshore companies with US connections is dwindling fast, because those banks are all getting caught up in (or trying to stay clear of) FATCA, and without banking facilities, those offshore companies aren’t able to fund trading accounts (despite being legally able to open them) because they fall foul of 3rd-party funding rules.
… so whilst there’s no technical issue with an offshore company opening a trading account, getting/retaining banking for that company is likely to get a lot harder over time.
FX brokers dealing with banks
FX brokers need to have some kind of EU banking facility in order to get access to other services i.e. Neteller, Skrill, Trustly, etc., but most EU banks are running scared and won’t take on FX brokers now.
The issue with banks (EU banks, at least) is that most don’t want to be involved with companies in the FX niche - often because (ridiculous as it sounds) they can’t seem to understand how Forex brokerages operate.
Banks that are willing to take on FX brokers tend to be smaller, so they and/or their correspondent banks get easily spooked by different rules put out by the IRS/SEC/CFTC and will pull the plug on affected clients in a heartbeat.
The same applies to card processing services - especially in terms of rates. To put it into perspective, a broker with EU connections and reasonable volume could get card transaction rates down to about 3%, but without those EU connections, rates jump to typically 6-10%. Assuming that the broker was making the typical 0.5 pip profit on each trade, someone depositing $100 would need to trade 1.2 - 2.5 lots before the broker even covered the card fees, and that makes it very difficult for ECN brokers.
[This is not an] issue for [retail] market-makers, because they have no liquidity costs.
…this does not fix the problem, it’s just an idea…
Thinking outside of the box, of course, one could locate an offshore
entity who would be willing to partner in exchange for your trading
services. Locate a non-U.S. person or entity
who would be willing to open Forex brokerage accounts, and permit
you to be a designated trader for those accounts.
An agreement would include your regularly billing the entity
for “trading services rendered”, which would be linked most
obviously to a proportion of the variable net profits.
This would establish your status as "an independent contractor"
as you would not be the entity owning the Forex account.
Your revenue would be ordinary income for services rendered
to a foreign entity; not investment or speculative income
and your identity would not be associated with the brokerage account.
Your offshore partner would retain an agreed remaining percentage of the
generated profits, etc. as the beneficiary of the Forex account.
…like I said, not a solution, but could work for some traders…
[B]IF[/B] you can easily convert currency back & forth on the banking side, having a broker account denoted in non USD would be fine, with no FIFO it’s easy to hedge out the USD balance risk.
I guess you really have to interrogate your potential broker 1st and then your banking relationship.
Actually you are incorrect. There are lot of brokers who don’t even accept US citizens living overseas. Even if they are dual nationals due to Dodd-Frank Act of getting them strangulated. I personally had this problem of being told that we cannot accept due to your government problem. Ditch your passport and you will be welcomed again. Simple as that.
That even includes foreign entities controlled by US citizens. As long as UBO is US citizen even living overseas they deny you. Hotforex, Amana, etc etc will deny you right away. There are few who would accept you and the list is getting shorter day by day. If Donald Trump does not dismantle FATCA and Dodd-Frank, a lot of Americans living overseas will have to ditch US passport as it is toxic and you are harassed everywhere with it. Last year there were lots of Americans who renounced as situation is not improving with US expats and their lives are being messed up with banks and brokerages shutting them off. I see on my bank webpage from some investment related pages that you are restricted from accessing this page since your account is US related account.
Apintrust.com is not a trustable company anymore. They will sell you a company but will not be able to help you open up a foreign bank account. For example, they talk about this huge bank in Seychelles with headquarters in UK. This is Barclays in UK they are indicating. Barclays Bank Seychelles discontinues offshore banking services - Seychelles News Agency. Barclays has discontinued its Seychelles offshore banking services since 2015. So how can they help you open an account there? A lot of these offshore service providers are not being honest with you to make their money. Banking these days has changed a lot. Please be aware of current regulations and rules. You will have a foreign entity that you would have to declare to IRS anyways with no bank account or some Carrribean bank account that you will have problems in transferring your money in and out of there due to lack of correspondence banking since a lot of Carrribean banks have lost their USD and Euro correspondence accounts.
Wait for CTFC to drop the hammer on the remaining reputable brokers on their RED hit list
Painstakingly hunt down your own business banking solutions globally (accepts US citizen beneficial owner, USD/EUR correspondent banking + FX broker money transfers) with backup accounts opened just in case
bitcoin denoted FX accounts
non US citizen/resident nominee director & signatory on broker & bank accounts (correspondent banking + FX broker money transfers)
renounce US citizenship, pay your exit fee, back taxes and move out the country
eventually give in and trade with Gain (bucket shop operator with multiple fines), Oanda (news release spread manipulator) or CME (<30:1 leverage & expensive real time data fees).
Yes, I was aware that bank was Barclays (UK & Seychelles). The Singapore bank was also OCBC. That information was on their site years ago and has since been removed. Before finding out how difficult this is going to be, I was planning to use them strictly to open entity and find my own banking relationship.
Honestly, regardless of the difficulties I still have to investigate the possibilities of offshore trading via entity. My current offshore broker going down and being stuck with 50:1 leverage or 25-30:1 with CME would be an insane amount of earnings lost for no good reason. The funny thing is that IRS would then get significantly less tax money out of me annually.
I would invite you to Turkey but government is is working on banning the citizens from trading abroad… Within a month maybe less they will announce it.
Currently we have only 1:10 leverage and minimum 50000 TRY (nearly 13000 USD) deposit.
Thats why i ended up here, searching offshore brokers and escaping fascist regulators.
I have no doubt that Turkey, too, will pursue the same path as the US.
As for the Option 5, that is the first thing came to my mind when i’d heard about the news
And i want to thank all the contributors to this thread.
Hi Clint…I hope you don’t mind me dropping by your thread. Although, thankfully, I’ve not had to utilise any of the information here, I think this thread is absolutely invaluable. Thanks to yourself for keeping it going and keeping it updated and to all the members who contribute their findings to it.
And just adding my own middle fingered salute to the world-wide “nanny state” we are steadily spiralling towards.
Hey guys - just stumbled across this thread and had a couple of questions. What are you guys using to deposit and withdraw into these offshore brokers, Neteller won’t transfer to a non US entity if you are a US customer, webmoney not accepting US customers, Fasapay not accepting US customers, and any of your credit/debit cards won’t run to any of these places in my experience. And the bad part is getting money in should be easier than getting it out, there is less options for withdraw than there is for deposits? Any help would be greatly appreciated at this point even though they accept US customers - the main 2 I was trying for was Forex Optimum and PaxForex but Forex Optimum has no options left for me to get money in or out