Looking for Solutions to Reduce Taxation on Stock Investments (Europe based)

[Radko]

Hi, yes you︁ can open an LLC and then open an account with IBKR, plenty of people do︂ that.

Withdrawals and deposits work the same as any personal account.

You can try to︃ form the LLC and open the account yourself, although it's probably better to have a︄ CPA in the U.S. do everything for you. It's up to you.

 

[fkcgt]

Thanks for the reply.Do you have any suggestions for initial⁣ deposits and withdrawals? I am currently planning to open a wise business account or another⁢ bank account in the name of this LLC. I will use this bank to deposit︀ funds into the IBKR account set up in the name of my LLC, and then︁ start investing. When I need to withdraw funds, I will keep them in the bank︂ and use the debit card provided by the bank for daily consumption. But how can︃ I transfer money from my personal bank account to my bussiness bank account? Will this︄ attract attention? I don’t have a lot of money, and each transfer will be less︅ than 10k US dollars.
My budget is very tight and I would like to handle︆ my tax issues with the IRS myself. I am not an American and will not︇ be one in the next five years. Do you think it is feasible for me︈ to mail the IRS a letter every year to file taxes for my LLC?Thanks a︉ lot

 

[fkcgt]

I'm just a student and money is very tight and⁣ I'm trying to avoid the gct in as cheap a way as possible

 

[Radko]

I'm not sure what you mean by suggestions for deposits and withdrawal? You can︆ deposit as little as you want, there are no minimum deposits or withdrawals.

Please keep︇ in mind that even if you open an LLC account so you can invest in︈ the U.S., you will still have to pay taxes in Germany.
An LLC in Germany︉ is considered a pass-through entity, so all the money that you make on your investments,︊ you will have to pay taxes in Germany.

And, if you transfer funds from a︋ German personal account into your U.S. LLC account, the German tax authorities will know that︌ you have an account in the U.S.

If what you want is to not have︍ to pay taxes in Germany, then you should move to another country, like Cyprus, where︎ there are not taxes on foreign capital gains, interest, and dividends.

*If you still want️ to open the LLC account with IBKR, don't worry about the IRS. Since the LLC‌ is a pass-through entity, you will not have to pay taxes to the IRS, there‍ are no taxes to pay to the IRS. All taxes should be paid in Germany.⁠

 

[fkcgt]

It's the fact that I don't want to pay taxes for︆ Germany that makes me want to open an llc, so why open an llc if︇ I still have to pay taxes? Aren't all those Goldman Sachs clients you mentioned opening︈ IBKR accounts with an LLC because they want to avoid CGT?
I thought you were︉ presenting a tax avoidance idea, the idea that European residents avoid capital gains tax in︊ their home country without having to move elsewhere, which obviously can't be avoided if I'm︋ traced for sending money to my llc bank account from my personal account.That's what I︌ asked about deposits and withdrawals, i.e., sending money to a company account from a personal︍ account.

 

[Radko]

You misunderstood, my original post wasn't intended to show Europeans how to avoid︁ paying CGT, it was just an easy way to open an account in the U.S.︂ and be able to invest in the U.S. without any restrictions (Europeans can't buy U.S.︃ ETFs if they are residing in Europe due to the restrictions imposed by the EU).︄
Having said that, there are many people with bank accounts in the U.S. that do︅ not pay CGT, but that depends on the country where you live in, like Cyprus.︆
And yes, I'm sure there are people living in Europe that are investing in the︇ U.S. that do not pay CGT, but that doesn't mean it is legal.

 

[fkcgt]

ok thanks, idont care if it is legal.of course bezos pay 1000usd tax per︂ year was fking legal.fk the law.

 

[cuno]

Really useful thread, it’s clear there are multiple angles to approach tax optimization for stock‌ investments when you're based in Europe.

Some have mentioned relocating to low tax jurisdictions like‍ Bulgaria or Cyprus due to their flat tax systems. But how do these countries actually⁠ handle foreign dividend income or capital gains from US stocks in practice? Do double taxation⁤ treaties help significantly, or are there still local taxes to deal with?

The idea of⁣ using a foreign holding company to shield gains also came up. That’s interesting, but how⁢ do you handle brokerage account access and reporting under CRS? Are most brokers okay with︀ corporate structures, or do you need more specialized setups?

There was also a mention of︁ bridging into crypto as a form of offramping. Is that being used more as a︂ hedge against fiat-based taxation, or is it part of a more structured exit strategy?

It seems like most solutions either involve changing your personal tax residency or building the right︃ legal wrapper around your investments, and both come with trade offs.

Would be great to︄ hear more from those who’ve actually implemented these strategies and how they’ve held up under︅ scrutiny.

 

[Radko]

In Cyprus there are no taxes on Dividends‌ and no taxes on Capital Gains. That's why so many traders and investors move to‍ Cyprus.

Brokerage account access under an LLC is exactly the same as a personal⁠ account.
U.S. Brokers like Interactive Brokers and Charles Schwab will happily open an account for⁤ you under an LLC.

CRS doesn't depend on the structure, it depends on the country,⁣ so if you open an account in the U.S. there is no CRS to worry⁢ about.