[edited to clarify: this is in reply to FX French’s most recent post here]
No surprise here, known for donkey’s years.
Only surprise I’m feeling is having had two posts of mine disappear from the thread, - now since I copied the last one to save it rather than re-type, the last one’s on moderation. Byzantine Empire, hoorah! 
[ edited to add – Voila, the first one has shown up, a few minutes after this one posted. ]
To expand just a bit upon that theme, though: Let’s go back and consider the rationality of having to provide minute detail of one’s person, habit, finance, and history to someone in order to give them money.
Ah, ah, ah… now, no legalities, just use yer loaf and be candid. ;->
Here is a question that I have yet to be answered. I am a US citizen as we all know it is difficult to select a broker outside the US. Yes there are many that would have me but for the most part the Brokers that look attractive do not accept US citizens. So I started an offshore business to get around this matter. Only to find out that beyond the directors passports copy’s of utility bills etc. They also want a beneficiary to be listed with there passport bills ect. Does anyone know how to get past this damn red tape???
Brokers will open an account for your offshore company even if it belongs to a US citizen. It’s then your company’s place of domicile that matters, not yours.
Bravehoststamps, I check out the link you posted about the Australian company but when I go to put in my information as the sole director it’s asking me for an address in Australia. How did you get around that?
“(This address must be the person’s usual residential address in Australia, unless ASIC has previously approved an alternative Australian address - sections 205D(1), 201A(1) and 204A(1) of the Corporations Act 2001.)”
Your address doesn’t necessarily have to be in Australia, unless something has changed. What does their customer support say about it?
I didn’t ask customer support, I was just filling it out without saving it just to see what information it was going to ask. They must have changed something because I don’t see anyway around it since the drop downs are only for Australian address.
***I sent them an email to see what they have to say
Dukascopy told me they would freeze the account if the[B] traders IP address was from the US[/B]. Also that I could not be listed as a trader even if I were trading for a non US company. I was in shock I guess Americans can not get jobs in foriegn banks or trading houses now? Unfortunatly Duskascopy was my broker of choice. I was very disappointing and I believe many Americans are having this problem.
I am currently trying to open an account with Pepperstone. In the application It specifies
" Beneficial Owner Details
Under part 1 of the Australian Anti-Money Laundering Counter Terrorism Financing Act we are required in the case of
a [B]private company only[/B], to obtain the following details of the beneficial owners: benificiaries name and place of residency.
I am thinking it will be the same as with Dukascopy.
Not sure how many brokers have installed this policy. MiG, I recall, would not deal with trusts or any entity with a charitable purpose, and this was some years ago. Each seems to have some ‘surprise’ quirk hidden behind the come-hither. Add this ban on U.S.-based IPs to your questions for the next broker.
I am currently trying to open an account with Pepperstone. In the application It specifies
" Beneficial Owner Details
Under part 1 of the Australian Anti-Money Laundering Counter Terrorism Financing Act we are required in the case of
a [B]private company only[/B], to obtain the following details of the beneficial owners: benificiaries name and place of residency.
I am thinking it will be the same as with Dukascopy.
A beneficial owner can be the same individual or entity listed as a director; it’s worth a call or chat with them to establish this fact. Good luck, Jasonswindow, don’t give up – and please let us know how it goes.
Pepperstone will open no accounts for individual US traders. They will, however, open accounts for non-US companies that are owned by US citizens/residents.
I felt this should be said because I have found it to be true: many of the paperwork requirements in brokerage client applications are mere pro-forma for their records, meaning “so we can say (to regulators) that we have these documents/info.” Same for the occasional stated policy which is announced “so we can say we told you.” Sometimes a barrier such as no-U.S. IPs is a word to the wise (in other words, use a proxy), but other times can be a solid warning of bad things they MUST do if your dirty little U.S. IP peeks through.
When dealing with larger firms who have staff for fact-checking and who perhaps had to knuckle under to more onerous deals with CFTC or whomever, your mileage may vary. It’s a continuum of policies, all different, but rather a dark rainbow you learn to read for the weather, with experience.
Try to get a feel for what is really going on behind the policy face. Don’t take foolish risks, but gather as much in the way of data and impressions as possible; do your analysis; and see if you can protect your operation with other measures.
I have a feeling that the days of settling in with one broker for five+ years at a stretch are rather numbered with the upward volatility in these shifting REGULATIONS and POLICIES. So don’t feel too beset if it becomes necessary to switch from one to the next on an accelerated basis.
Hope this helps someone. :45:
OK forgive me if this has been answered.
Will the CFTC penalize the trader for having an off shore forex account even if you’re complying with filing taxes and reporting the foreign account(s)? The account is on a non-NFA/CFTC registered broker.
The information you’re looking for was discussed in some detail just four or five pages back in this thread. Start reading there and proceed to the end, it’s worth it.
Not being a practicing lawyer and having no crystal ball as to the next move of the CFTC, best thing I can suggest is to do your own research and form your own conclusions. At the moment I am not aware of ANY provision in the thousands of word-smithed pages of potentially relevant laws which in any way prohibit a U.S.-resident trader from dealing with any brokerage worldwide.
Applicable filing and tax payment requirements are a separate issue from legalistic prohibitions against doing business with the bank/brokerage of your choosing.
I read the posts Gypsy. Indeed it’s enlightening. This CFTC mess is not pretty at all. I’m gonna stay with what I’m doing, I have a funny feeling this law won’t stand the test of time.
I agree with some other posts regarding this isue on the 'Net. The CFTC/NFA should go after complaints of fraud. ‘Protecting’ traders from themselves is just silly. We all have lost money doing this gig. That’s how you learn.
Thanks much to all who contribute.
Okay this probably already answer and sound silly but i had to ask?
Why somebody want to move to offshore account? If it’s to avoiding taxes, didn’t we oblige to report the offshore account anyway? Or is it hard for Irs to found out about the offshore account thus we don’t have to report it?
Needs enlighten…
If you start an offshore (Panama) foundation and corporation you are creating a beautiful tax shelter. As long as you don’t share this information with anyone!!! But people are also going offshore to do business because of better trading environments.
Just for the hell of it.
Hi, I just read about 40 pages of this thread, and I’m equally confused. Why bother with an offshore account if you plan to report all earnings to the IRS? “For the hell of it” doesn’t fly. It’s a bigger pain in multiple ways, and some domestic companies offer competitive terms.
Please don’t ignore this top question just because I’m asking another:
Regarding commissions vs spreads- I know spreads are not tax deductible, but are commissions? Am I better off choosing a company that has lower spreads offset by commissions so I can deduct those expenses? Can’t find answers online.
Thanks, PM
No one here is going to advise anyone to evade paying taxes. The main purpose to this thread is to alert people to other brokers that will take US FX traders and allow them the freedom to trade without restrictions that the CFTC has imposed.
As a U.S. Citizen, you have an obligation by law to report your earnings in accordance to Federal Law. Severe penalties and jail time may be imposed for willful violation or fraud. I’d rather find way to comply than risk losing it all or jail time.
It pays to study the U.S. Tax code. The 1% does. The goal as with any expense to the pay as little as the law allows.
You should contact a tax adviser who is familiar with Spot forex tax reporting. The basis cost of your trading is usually deductible but there is a formula involved.
Google is your friend.
Such as a 1:50 max leverage limit, hedging prohibition, and the FIFO rule.