Because if you live in the UAE and buy the stock on a UK exchange, that makes you a UK investor?
List of Countries with 0% WHT on dividend-paying stocks to non-residents taht are accessible on Interactive Brokers
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oh so you are saying that you are a citizen of EU/UK and charles schwab/fidelity still let you buy US domiciled ETF's with any mifid or priips limitations? Are you doing this yourself? That is pretty cool if so. The only annoyance would be having to convert EUR or other currency to USD if they only work with that, which would introduce fees, but I can still use IBKR for the conversions since their fees and rates for FX are pretty unbeatable. Then it is just minimizing the SWIFT transfer fees from IBKR to Charles Schwab. Maybe Wise offers cheap services for this, my bank charges 1% for incoming USD SWIFT payment which is pretty disgusting.
From what I've read, one needs to be have a social security number, to open a registered account. The amounts are limited to a small % of your declared income from the previous year and once you become a non-resident you can keep the account but can not add any more funds to it.
Say the fairly typical situation (on this forum) that one is a non-US citizen and lives in a tax haven country and has a US LLC. Is it best taxwise in this case to invest in US stocks and ETFs as an individual, or via the US LLC?
I asked myself that same question a while back, and it is better as an individual.
If you live in a country where you don't have to pay capital gains tax on foreign earned money, then you will not pay anything as an individual in your country of residency and in the US, also nothing with an LLC, but when it comes to the withholding rate on dividends, as an LLC the US will keep 30%, as an individual the US will keep whatever the double tax treaty they have with your country of residency, so if you live in Colombia and many other countries the withholding rate will be 15%, if you live in Mexico, it's 10%, if you are in Dubai then it will be the same as an LLC, 30% (UAE doesn't have a double tax treaty with the US.)
So no capital gains tax with an LLC, or as an Individual (non-US citizen, non-US Resident) and withholding rate on dividends is based on the double tax treaty that the US has with your country of residency (just make sure you give your broker a W8-Ben form, otherwise the US will keep 30%)
At least this is how I see it.
If you live in a country where you don't have to pay capital gains tax on foreign earned money, then you will not pay anything as an individual in your country of residency and in the US, also nothing with an LLC, but when it comes to the withholding rate on dividends, as an LLC the US will keep 30%, as an individual the US will keep whatever the double tax treaty they have with your country of residency, so if you live in Colombia and many other countries the withholding rate will be 15%, if you live in Mexico, it's 10%, if you are in Dubai then it will be the same as an LLC, 30% (UAE doesn't have a double tax treaty with the US.)
So no capital gains tax with an LLC, or as an Individual (non-US citizen, non-US Resident) and withholding rate on dividends is based on the double tax treaty that the US has with your country of residency (just make sure you give your broker a W8-Ben form, otherwise the US will keep 30%)
At least this is how I see it.
In theory, it shouldn't make a difference, but it would probably be easier to just do it as an individual to make sure the withholding is done right by the broker.
old thread somewhat ik but related question
To the ones using an LLC with IBKR and an address in Georgia.
How did you register this? Did you just upload a proof of address showing a Georgian address and that was it?
Did they ask for a tax ID number?
To the ones using an LLC with IBKR and an address in Georgia.
How did you register this? Did you just upload a proof of address showing a Georgian address and that was it?
Did they ask for a tax ID number?
Very useful information and research - thank you
You need to be very careful with the US Estate tax whether held personally or in a US LLC. Unless the country you are resident of have an Estate treaty (approx 20 countries only) you will only have a $60,000 exemption and anything over that can be taxed at up to 40%. Stocks held in a foreign company are not subject to the estate tax but as per the IBKR web site will be subject to withholding tax. So they are getting their money in the end.
You need to be very careful with the US Estate tax whether held personally or in a US LLC. Unless the country you are resident of have an Estate treaty (approx 20 countries only) you will only have a $60,000 exemption and anything over that can be taxed at up to 40%. Stocks held in a foreign company are not subject to the estate tax but as per the IBKR web site will be subject to withholding tax. So they are getting their money in the end.
I have a question for you - is IBKR not reporting your income back to Mexico. With all needing an RFC number now in Mexico is this not an issue for you? And there is no estate treaty with Mexico
I am aware of the fact that Mexican tax authorities are requiring foreigners living in Mexico to get an RFC, BUT US brokers and US banks, under FATCA, are only required to report those accounts that earn more than $10 in interest, but they are not required to report dividends or capital gains that you made from your US brokerage account (dividends are withheld at 10% by the IRS based on the double tax treaty the US has with Mexico.)
So don't invest on any type of investment products, i.e. CDs, that will generate more than $10 in interest.
Now, whether the Mexican tax authorities, SAT, is actually checking that information when they receive it from the IRS, I don't know. Personally I don't know anyone that has been contacted by the Mexican tax authorities regarding their US brokerage account after generating more than $10 on interest.
But if you want to follow Mexican tax laws then you are required to tell them about all the interest, dividends, capital gains, and income that you make in the US, or in any other country around the world if you spend more than 183 days per year in Mexico.
There are other countries where you can legally avoid paying taxes on all your foreign investments as they only have a territorial tax system, such as Thailand, Costa Rica, Panama, Paraguay, Dubai, and many others.
Sadly Mexico taxes on your world wide income and investments as you know.
*This is not tax advise.
So don't invest on any type of investment products, i.e. CDs, that will generate more than $10 in interest.
Now, whether the Mexican tax authorities, SAT, is actually checking that information when they receive it from the IRS, I don't know. Personally I don't know anyone that has been contacted by the Mexican tax authorities regarding their US brokerage account after generating more than $10 on interest.
But if you want to follow Mexican tax laws then you are required to tell them about all the interest, dividends, capital gains, and income that you make in the US, or in any other country around the world if you spend more than 183 days per year in Mexico.
There are other countries where you can legally avoid paying taxes on all your foreign investments as they only have a territorial tax system, such as Thailand, Costa Rica, Panama, Paraguay, Dubai, and many others.
Sadly Mexico taxes on your world wide income and investments as you know.
*This is not tax advise.
Singapore doesn't have WHT on dividends
I don't think the fact that your IBKR acct is registered with the US and not Singapore/UAE makes you liable for any taxes
I don't think the fact that your IBKR acct is registered with the US and not Singapore/UAE makes you liable for any taxes
No, as I can see here:
https://taxsummaries.pwc.com/united-arab-emirates/corporate/withholding-taxesThere is a DTT between UAE and SG
https://taxsummaries.pwc.com/united-arab-emirates/corporate/withholding-taxesThere is a DTT between UAE and SG
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