Going offshore to escape the CFTC

Broker Discussion Forex Brokers
1834

I get the same kind of spreads with FX Choice ECN and FinFX ECN, both of which continue offering high-leverage accounts to the US customers.

1835

Thanks for the head’s up, bravehoststamps. I’ll definitely check them out.

1836

Thanks for the update, Sean.

I will move this broker from Group 1 to Group 2 in our List, as part of the next update.

I am really tempted to launch into a rant about the Commodity Futures Trading Gestapo, and the gutless offshore brokers who kneel at the CFTG’s altar. But, I will restrain myself.

1837

Hey man I agree with you a 100 percent. point to the steps! I would not hesistate to break from the us confines to be able to follow and full fill my desire to be a sucessfull trader and entrepeneur. 50:1 leverage if f up! Its pretty much an attempt to keep the guys with money with money and the ones with out , with out! You need thousands just to make and start out with that kind of account. basically crushing the business and gonna put most of these brokerages out of business soon or later because they wont have to many clients.

1838

Thank goodness there’s always another way – and usually several other ways – to get anything done! An especially practical solution for traders with small accounts, is to physically live in another country. Most brokers will open accounts for US citizens who can provide proof of residency in another country. The ‘proof of residency’ they usually require is a copy of a utility bill showing the name and address. (There are a few, though, who do not differentiate between citizens and residents. So, it’s necessary to speak with the broker re: confirmation of their position on this issue.)

Another reason this route is a practical solution for traders needing to start with small accounts, is because – contrary to popular belief – the cost of living in many countries is amazingly low compared to the US. English is widely spoken, and native English-speakers have many opportunities for work in most any field, at higher rates. Also contrary to popular belief, living near a ‘friendly-border’ between the US and Mexico, provides opportunities for shorter commutes to San Diego than between northern NJ and NYC!

These ideas come from my real-life experience in several countries over the past decade. I think it’s much better to do a ‘boots-on-the-ground’ exploration – rather than relying on online search results, or recommendations of people with something to sell.

Enjoy your search!:45:

1839

Later this week, I will update the Offshore Broker List.

Here are the updates I have, so far:

• To be added to Group 1: [B]StrategemFX (Belize)[/B]

• To be removed from Group 1: [B]Forex Club Ltd (BVI)[/B], and T[B]he Collective FX (Belize)[/B]

• Revised web address: [B]Varchev Financal (Bulgaria/UK)[/B]

If you know of any other updates, please post them here in the next few days. Thanks.

1840

Not sure if BabyPips has disabled private messaging. Maybe a lot of spammers or something. I’ve never recommended purchasing LLC offshore without first visiting the country or at least visiting a neighboring country and get an idea of how things are actually done. You should be directly involved in the process…after all it is your business. I do agree most of those sites are taking advantage of people’s ignorance. One tip is to follow through on their free advice. If the free advice isn’t up to spec (ambiguous, does not yield desired/concrete results, etc), then their $2000 advice is probably not going to help much. The “big secret” is that there is no secret. But as long as you keep chasing and searching for something exotic or mystical, there will always be charlatans ready to give you what you want.

What is your definition of correct? If the core problem is that you cannot open a non-US retail forex account using US residency documents, then doesn’t it stand to reason that you would need non-US residency to open the account at xxxx forex broker?

  1. Figure out where you want to establish residency. This residency word has a lot of flexibility. What you need at a minimum is a local id (usually a drivers license) and a utility bill to open a forex account at any broker. You may also want to have a local bank account, but that might be more difficult. I usually like places that are easy going, cheap, have acceptable public transportation, decent internet, fresh fruit, clean air, and friendly women. Thailand and Columbia come to mind, but there are many other places that are suitable for this task. Preferably somewhere where your dollar will stretch and you can find a decent plane ticket.

  2. Once you have a better idea of what you are looking for, seek out advice from people who have ‘been there, done that’. Avoid whiners and complainers. Look for people who can give you an idea of what to expect based on experience. Look for people who will help you get to, or closer to, your goals.

  3. Use expat forums. For example, ThaiVisa is a great resource for expats and travelers helping each other do things in Thailand. You may run into the occasional troll, but most of the senior posters are willing to help with their own experiences. The key is to do some initial research yourself and then ask questions when certain things are unclear. Don’t get bogged down with details. As long as you have a decent roof over your head, you can always scale up later. And remember, if you ask abstract/ambiguous questions, expect abstract/ambiguous answers. Stick to concrete questions with concrete goals and you lessen the chances for feeding trolls.

And why not try out ‘localized’ version of the ‘mainland’ you plan to travel to? In other words, if you planned on going to China, is there a China Town that is closer to you where you can get some ideas as to what to expect? You know clearly it will not be exactly the same as the mainland, but certain cultural clues are observable. Plus you get the benefit of hands-on observation; an online forum it is difficult to have a human feeling to it.

  1. Who do you follow? The top 5 people you hang out with or look up to is most likely what you will be like 5-10 years from now. So perhaps you can start following people like Ramit Sethi (I Will Teach You to be Rich) and Chris Guillebeau (The Art of Non-Conformity). Are they forex traders? Not that I know of. But they will help you uncover the core components of how to make money or travel the world with specific and realistic advice; many of it free.

  2. Be prepared to have something on offer when you ask someone for something. We all get free lunches sometimes, but as my dad used to say ‘A bird can’t fly on only one wing’. That’s how you build relationships: help someone get closer to their goal…not by trying to take, take, take all the time. If you have the attitude that people have to do things for you, especially when there has been nothing you have done for them, you’d have a tough time…especially in a foreign country where their are no bailout social programs. You’ll discover why some things are not given out for free.

  3. All choices come with some risks; hopefully that has sunk in by now. Only you can weigh out what is a good fit for you. Let your heart be your ultimate guide. Note to yourself: stop suppressing your feelings.

BTW, it takes a lot of someone’s time to prepare posts like this, which is why you may not see it very often in this format. You’ll find as you travel [outside Western civilization] that the best deals are often unadvertised on the internet. You have to walk, drive, or otherwise keep your eyes and ears open in the local environment to get these deals. That may include becoming proficient in the local language. But expat forums can be very helpful. And certain specific information won’t be put out on the forums and there are good reasons for it. But the key is to have ENOUGH information to make a decision. Among the many ‘good reasons’ to not put certain information public, it tends to attract freeloaders, which brings a lot of unwarranted energy.

I can appreciate someone who is no-nonsense-minded. But don’t confuse trying to seek right knowledge and dreaming about ‘correct information’ with taking action on the knowledge (or better yet, your own wisdom). Stop trying to make other people responsible for your happiness. The people who have made a choice to not be victims; those are the ones that are expats. Nothing wrong with charging money for stuff people can do for themselves, but choose not to for various reasons. Test some of the free advice first. Really the most expensive part is the plane ticket, which you can get around by using either frequent flyer miles, buddy passes, or use a wholesaler travel agent. These are stuff that you’ll uncover in expat-specific forums and other mediums.

You may certainly pay a lawyer or accountant for advice if you choose. Not sure what you hope to get from them, as a lawyer typically will not advise you to do anything that could reflect poorly on his professionalism…i.e. nothing he deems shady. It doesn’t mean you can’t do something…just that how do you verify what they tell you. So read/listen carefully to any advice you receive. But we do pick our leaders/teachers and we get what we want.

One last thing: avoid people who only like to place limitations on themselves. You’ll know who they are, and they are all over the planet. The victim role may appear like the easy way out, but it is much more enjoyable to take responsibility for your choices. Besides, when things are not working in your favor, you may always make a new choice, right? See this article on how to be unhappy for extended periods in your life.

This is exactly my point all along. By opening a retail forex trading account with US Resident documentation, you are essentially going the long way, and then trying to scramble to shorten it when the broker caves in and kicks you out. But to each their own, especially seeing as this thread is tracking brokers still accepting USA clients.

1841

I was actually in my 5th day writing the previous reply, stopping to reflect, juggle a newborn’s constant hunger, etc. I saw these new replies and figured I’d quote them as Sunland is clearly on the right track, especially with the last paragraph. Just to give you an idea that it is possible: Retire-on-550-month.com. But the expat forums is still a good place to exchange ideas and get solid information on objective things like visa requirements and how fast internet will be, etc.

A good book to begin this ‘unlearning’ journey is called “The Four Agreements” by Don Miguel Ruiz. Get the audio version if possible.

1842

That’s because Thailand is one of the most economically free societies, similar to Singapore…hardly any taxes, low gov’t regulations…what America used to be.

1844

I, equally, am pretty much done on these specifics as well. For those that choose to follow through on part or all of what I’ve already laid out, I just want to clarify a few things that might be misinterpreted.

Every forum is slightly different, depending on how the administrator configures the forum. BabyPips has disabled private messaging. I’m not sure if it is for new members or everybody. I did already enable email for regular members…not sure what’s wrong with that. If you have a strategy for enabling PMs that me or the moderators don’t know about, please chime in with your method.

Dead serious. All the specific advice I have given is provable for those who wish to take action and followup. I cannot vouch for other methods that don’t include the core strategy that I have laid out.

Nothing vague about what I’ve said. However you do need to follow the steps to get any type of benefit out of it.
And no need for talking. There’s almost no talking required when I walk into certain places or go down certain streets. No alcohol or drugs required either. Just taking action and doing your best with some of the most beautiful women (plural); don’t need any words at all to describe…but that is well off-topic:27:…more of a bonus for those who go :60:

Beyond the scope of this forum. But I did the readers an even better favor. I gave them the core steps needed to get their own experience. While fear only requires conceptual correctness, truth needs follow-through to get the full effect.

Isn’t this what forums are all about? exchanging ideas? It’s up to you to determine who is qualified or not since you are the one making the decisions.
An especially with topics like forex trading, backpacking, expatiation, etc you do sometimes have to rely on people with recent experience on the ground.

not until you get on the ground. The expat forums, official gov’t websites, or even your lawyer buddy should be able to give you enough specifics on visa arrangements, hotel/guesthouse recommendations, and basic steps to obtaining local id and/or utility bill until you arrive.

Never said anything about moving permanently. I know people who regularly migrate south or to tropical weather during winter time. That’s not weird, is it? Although sometimes people ‘choose’ to make a permanent move, like everything else I recommend, it is a choice.

Emphasis added for effect :confused: :38:.

So, to get a feeling for the country you will be establishing a residence in, go to the part of town that is similar to it in the states…for culture?
You are messing with us now right?..

That is correct. No jokes or tricks. Observable proof of someone’s culture that is geographically closer (and quicker/cheaper to access) is worth much more than forum posts alone. You can see how the people interact with each other, do business, etc. I think it is worth repeating what I said earlier below.

repeat: “And why not try out ‘localized’ version of the ‘mainland’ you plan to travel to? In other words, if you planned on going to China, is there a China Town that is closer to you where you can get some ideas as to what to expect? You know clearly it will not be exactly the same as the mainland, but certain cultural clues are observable. Plus you get the benefit of hands-on observation; an online forum it is difficult to have a human feeling to it.”

Totally up to you. BTW, I don’t bet on luck or superstition; I only bet on sure things. And while I may consult a million and one advisers, I never make any third party responsible for my affairs (and that includes my own happiness). I research, make choices, and do my best depending on the situation.

  1. I didn’t get paid a cent to post my recommendations.
  2. I encourage you to not judge (or prejudge) people or things you’ve never met before.

I respect your opinion; a lot of people seem to have one these days. I’m sure others will chime in and offer theirs. I don’t base truth off of popularity or other lagging indicators. I primarily test methods and see what works. If you found another method that is simpler, easier to follow, and get results (or can be tested), then use it or share it here along with your results.

If you walk into anyone’s house with that kind of arrogance, especially in a foreign country, good luck getting anything meaningful accomplished. You’ll eventually figure it out: double-pricing, the inability to get your packages delivered properly, or just flat out “NO…CANNOT SIR…SORRY”

I tell it how I see it. I think it’s worth repeating: Don’t make anyone outside of yourself responsible for your own happiness.
Does it really matter where the solution comes from? As long as it works?

Nothing the lawyer will tell you that is not already available to the public. He may have some experience that might be worth paying for, especially of the lawyer specializes in your field of study. Difficult to verify credentials, especially overseas lawyers, although the expat forums can be a good start What I’m talking about is basic traveling from one country to another and then obtain some local credentials. The local gov’t office would have pamphlets on the requirements for locals and foreigners.

If it were so easy, then you wouldn’t have needed alternative strategies to open up accounts outside of just presenting your current residency docs. In fact, this whole thread wouldn’t have been necessary. The motivations behind this thread is that it has become much more difficult, not easier for US residents to open acct since recent CFTC regulations, particularly the Frank-Dodd act.

Again just to be clear, I never suggested a permanent move. It largely depends on what country you plan to setup residency in to get your documentation. It could be a couple of weeks or a couple of months. It could take several years for a more permanent residency, but that’s not necessary in most cases and you don’t have to be in-country in some cases the whole time anyway. How serious are you about your forex (or financial market) trading career?

There are much shorter methods, but not so legal and would not be appropriate for anyone to put on this type of forum.

I am glad that you are able to provide such specific advice on an alternative method to establishing residency offshore. It is also good to know that you have such trustworthy advisers that you have instant access to for credible advice on such a specific topic. Especially if those lawyers have actual experience in being an expat (which can only come from being an expat). If that is the route you wish to take, that’s great and I wish you well. I’m sure other members would be glad to know how that works out for you. I’m particularly interested to know what steps you would take to verify what the Lawyer and/or Accountant are telling you are accurate. You could always sue your lawyer for malpractice if he gives you an opinion that doesn’t work…only in America could someone think like that. BTW, the reality of lawsuits: They cost more money than the prosecutor makes the majority of the time, even if you were technically right. Not to mention the incredible amount of time it consumes for both parties, but especially the prosecutor.

Do these lawyers/accountants that you speak so highly of have a website, email, phone number where they can be reached?

BONUS: another website worth considering is CouchSurfing.org after you determine where you want to go. Again, take advantage of local experience whenever possible while building reputable relationships…and the possibility of getting cheap living arrangements.

1846

You are talking about setting up an offshore company to transfer your investments to for the purpose of avoiding your countries laws and not seeking advice from your solicitor and accountant!

There are people who specialize in this area. It is very complicated and no where near as straight forward as you think.
Many accountants/solicitors have a free first consultation. I guarantee if you get advice from someone that knows what they are talking about you will change your mind on doing it yourself.

You don’t want to have to see your solicitor/accountant after you have already stuffed it up.

Avoiding capital gains tax is the first question I would be asking. Even if you make money overseas, how are you going to bring it back into your country? Paypal?

Don’t lose sight that it is all about making money.

I am speaking from experience when I say this. I went the wrong solicitor a few years ago who gave me the worst possible advice I could have received regarding tax issues. Now I use a solicitor and accountant who specialize in taxation and asset protection.
It might cost a bit more initially then your local solicitor, but you might find it the best financial decision you could have made.

1847

I’m very happy with FinFx…they allowed me to expand my leverage up to 1:300 on request, and while I won’t trade it, they just announced they have added GOLD to trade on all account types.

1848

I never recommended offshore company (llcs, etc). My suggestions were geared primarily towards individual retail traders who just wants to open a basic retail account without US resident restrictions. If you need offshore company, then it would be a good idea to see what others with more experience in that industry are doing and that includes seeking proper legal advice. For most retail traders, an offshore company solely for trading is unnecessary. They should be more focused on implementing a profitable trading strategy first.

Either way you want to do it, i still recommend boots on the ground before parting with too much of your hard earned money. You should be actively apart of the process, seeing what your money is doing for you. Especially if it is part of a larger “asset protection” scheme or physical storefront.

1849

You have made recommendations regarding visiting other countries and getting dual citizenship,etc. Which is fine if that is what you want to do. I know of traders that store their money in a particular country due to that countries’ privacy laws. They have gone to the expense of going to that country and living there for the minimum required time to open an account. To me that is an extreme move, but they are trading millions of $ and they received professional advice on the implications.

The point is - if you are going to all that trouble, you are probably not talking about investing a few thousand dollars. If you are investing or plan on making serious returns your approach is going to cause you major problems in the not too distant future. You might get some ideas from forums, but you would not seriously take investment advice from forums would you?

1850

Anyone here using ProfiForex? I was wondering what anyones experience has been with them.
Also they are in Seychelles so not sure if a VPS makes sense from Europe or just use home computer for now.

1852

Thanks for your response its appreciated for me and my US colleagues.
Now I just need to find a decent cash back site (links below I found).
Wondering if there are any others out there!

Review Profiforex
ProfiForex www.profiforex.com

1853

[B][U]ProfiForex Update for the first page[/U][/B]
Some information updates below. Note: I have not used them yet but hearing good things and one of the few places someone in the US can go to get 500:1.

• [B][U]ProfiForex [/U]/B — regulated by Seychelles International Business Authority (SIBA)
— exercise extreme due diligence — see post #1561 for more info

Profiforex - Forex Market - Open a Trading Account
[B]Cent deposit[/B]
Minimum deposit: $0.10
The cost of 1 pip starts at 0.1 cent.

[B]Dollar deposit[/B]
US dollar deposit
Minimum deposit: $5.00
The cost of 1 pip starts at $0.10.

Platforms = MT4
Max. leverage 500:1
Margin Call = Stop Out = 15%
Spreads Profiforex - Forex Market - Trading Conditions
EUR/USD = 2
GBP/JPY = 7

1854

Flintstone, thanks for the info on ProfiForex. I will use it to update the ProfiForex entry in our List, on post #1.

In the List, I will show $0.10 as the minimum deposit required for a “Cent Account”, as indicated on the ProfiForex page that you linked to.

[B]However, I think it’s important to point out how ridiculous the numbers on that page are.[/B]

Let’s say that you open a “Cent Account” with ProfiForex, with the minimum required deposit of $0.10, and let’s say that you select 500:1 as your maximum allowable leverage. Then, let’s say that you attempt to trade the smallest position possible in USD/JPY.

According to the webpage, the minimum position size corresponds to a pip-value of 0.1¢ per pip — in other words, the minimum position size is 10 units of base currency (USD, in this case).

With 500:1 allowable leverage, margin of $0.02 will be set aside ($10 position size á 500 = $0.02), leaving free margin of $0.08 in the account.

The spread (2 pips for USD/JPY) will cost the account $0.002, reducing free margin to $0.078.

The 15% margin stop-out (= $0.003 in this case) reduces the free margin available to cover losses to $0.075, which corresponds to 75 pips in negative price movement in USD/JPY.

In other words, an account set up with the minimum allowable initial deposit (10 cents), and the maximum allowable leverage (500:1), would be 75 pips away from wipe-out, from the get-go.

If 400:1 allowable leverage were selected, the account would be 70 pips away from wipe-out.

If 300:1 allowable leverage were selected, the account would be 61 pips away from wipe-out.

If 200:1 allowable leverage were selected, the account would be 45 pips away from wipe-out.

If 100:1 allowable leverage were selected, the account would be un-trade-able, as the entire account balance ($0.10) would be consumed by required margin ($0.10) as soon as a minimum size position (10 USD) was opened.

[B]One has to wonder why a serious forex broker would offer such an account.[/B]

1855

One has to wonder why a serious forex broker would offer such an account.

a cent account is for new traders and testing new strats with a live price feed. My guess is that super low deposit requirements are to make it easy to open an account, not to trade with such a low deposit. I also wonder if the min trade size is a misprint. I have used cent accounts and the ones I have used have a min trade size more in the range of 0.001 cent.
I have no experince with profiforex just speculating. I may open a cent account to test them out.
Always — exercise extreme due diligence — with any broker! That said the best way in my experience to see how a broker stacks up in a real way is to open a live account with a small balance and them and test them out.

I would also point out that if you run the same margin and pip calculation on a US 50:1 leverage FXCM micro account opened with $50 it comes out only a little better. $50 is not really a usable account balance at 50:1 with a min trade size of $0.10 per pip.

1856

I went ahead and opened a cent account. I have to say they didnt ask for any ID verification. I was able to fund with paypal but not moneybookers. I used $1 to open the account. There is a $5 fee on withdraws so I better get trading if I want my $1 back.
also it looks like the min trade size on a cent account is 0.01 lot or a $10 position. Or $0.0001 a pip (I think I figured that correct)
this is what the account looks like after a $1 deposit remember a cent account shifts the decimal 3 places to the left to make mt4 happy. so $600 is $0.60 in real money.

accntinfo.jpg700×189 17.3 KB


I would be very suspicious if in opening a full account and not a cent account they dont ask for some sort of ID verification.