I’m a citizen of an EU country, looking for a place to open a firm thru which I could trade. I’d like to do it mainly for tax benefits, and maybe to manage funds thru it in the future, invest profits etc.
The info on this topic on Google is scarce. I came across some common suspects, like Singapore, the Cayman Islands, and Seychelles, as good places to establish an off-shore company for trading.
I was wondering does anyone here has any experience with this?
If you do, where did you register the company, and how was the process?
I think you’ll find a lot of those countries will not allow you to open a company that operates within the financial sector including trading. Also, in the UK and I assume other countries, you still have to pay income tax if you reside in that country regardless of where your company is registered. However, if you live out of the UK for over 6 months a year you will not have to pay income tax, but again you may have to pay income tax in whatever country you do reside unless they have zero income tax like Monaco or UAE.
It’s important to consider the costs and requirements involved in setting up and maintaining an offshore company, such as legal fees, annual fees, and ongoing compliance requirements.
I use pepperstone. FCA regulated and good reputable broker. They have a fairly large choice of stuff to trade, but if you’re into lots of exotics then you might not like them.
Spreads are bigger than CFD accounts, but the lack of commission cancels it out
They do demo accounts. Not really sure what you dislike, the only problem I have is that it doesn’t always connect me to the fastest server, but that’s probably an MT5 problem, and it’s only a problem for my scalping strategy
i’m not an accountant (and you need to ask one, for a question like this) but my understanding of EU tax law is that it’s extremely unlikely that there would be any lawful tax advantages to you in doing so, since the money in the company’s account would be “deemed” to have been remitted to your country of residence if you spend any of it on goods or services provided in your country of residence anyway
It’s certainly a tricky subject. I think maybe if the country the company is registered doesn’t have laws on providing accounts (which some mention above do) and perhaps the broker is based in a country not of your residence you may get away with it. But you would still have to pay yourself a wage which would need to be taxed at your country of residents income tax rates. But that just me thinking out aloud! Also, there’s the moral side of things, ask Jimmy Carr
There are treaties on double taxation between countries. So for example, if the company is in Dubai(think I saw they don’t have income tax) and you are paid as an employee of that company, then tax should be applied in the country where the firm is and where you got paid, not in your home country. So if you could find a place where income tax is 0 or significantly lower than in your home country(and if that treaty applies) you, then there’s your tax benefit.
Its not IRS. Americans have a much harder time escaping the taxman. I have an LLP in the UK(for something else I do) and I don’t have to pay any taxes, both in my country and in the UK. There are was, but I didn’t dig deep enough yet.
You can open a trading firm in Places like Singapore or Panama. According to what I’ve read so far, If you’re not managing other people’s funds, you don’t need any license. You need it only if you’ll manage others money.
Well, if you read carefully my OP, you’ll notice I was asking if “anyone here has any experience with this?”
What I know is not firsthand experience(except that LLP I mentioned), but rather what I managed to find online, websites of a couple of businesses that can sort you out with the whole firm registration process. So I to hear some wanted a first-hand experience.
I agree. I don’t think the information your looking at is correct, you need to speak to a qualified accountant.
As far as I’m aware, any wage you take from the company you work for will be charged at the income tax rate of the country you work out of, not the country the company is registered. However, if your company is registered in a country that has zero corporation tax you will not have to pay any tax on company earnings. So this may be a good way of increasing your companies bank account balance without paying tax until you want to pay yourself, then you pay income tax in the country you reside.
If you really want to get away with no income tax you need to live in a country without income tax rather than the other way around. Or just do spread betting.
It’s crucial to note that offshore trading firms may be subject to regulations and reporting requirements in your home country as well. Consulting with legal and tax advisors in both your home country and the chosen offshore jurisdiction is highly recommended to ensure full compliance with all applicable laws and regulations.
