Seeking Advice on Lowering Withholding Tax on U.S. Investments through Relocation

[jkl197]

CyprusLawyer101 said:
Yes not 0%. You could reduce to 5% though subject to conditions.

Thank you for keeping me in check ✌️
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@CyprusLawyer101 can you send me a direct message please

 

[JimBeam]

So, basically you're looking to lower your 30% WHT tax on dividends. For that you need to find countries that have good DTT with US and also to check if the dividends will be taxed as PT (not really sure about this part - would like if someone knows more to write about it).

So, as far as I know the lowest WHT options (also mentioned here above) are Romania and China (and Russia) at 10%.
Romania could be the great choice (low cost of living, big country, EU state, etc).

At 15% rate you have a lot more "shopping" to do as the list of the countries is much larger: Ireland, Cyprus, Slovenia, Poland, Netherlands, Malta, Thailand...

All other countries (that have no DTT) fall into 30% tax (including UAE).

More details:
https://taxsummaries.pwc.com/united-states/corporate/withholding-taxes
So, if you have $2M in your stock portfolio and it produces you 4% - you would be making $80k/year and if you decide to live in Romania for eg, that would leave you with $72k after the WHT. That's $6k/month and more than enough for above the average lfie in Romania.

Edit:
Also, worth noting is that if you invest in Canadian or European stocks from UAE you'll pay 15% WHT on these. Even if you buy for eg. $BNS on NYSE you'll still pay 15% WHT (and not 30%) - so you don't have to move to Thailand LOL

Last edited: Nov 29, 2023

 

[Marzio]

blanco said:
Regarding the W-8BEN,
Thailand and US have a TAX treaty and can be seen on https://www.irs.gov/pub/irs-trty/thailand.pdf
Under article 10, DIVIDENDS, paragraph 2, it specifies that a resident of "the other state", as long as not being a company, should not pay higher interest than 15% on dividend payments.
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What we where talking about here was article 4 that specifies who is considered resident and specifically the part that says that US doesn't considers you a Thai resident in the context of the treaty if you are only taxed on local source income (which is what you were doing).

The fact that you got away with a lower WHT by providing your Thai TIN but income wasn't taxed in Thailand doesn't mean you were compliant.

blanco said:
an option may be to open an account with UOB or CitiBank in Singapore, have the dividends paid out to the account in Singapore and use debit/credit card for spending.
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So you are bringing money into Thailand.

 

[blanco]

Marzio said:
What we where talking about here was article 4 that specifies who is considered resident and specifically the part that says that US doesn't considers you a Thai resident in the context of the treaty if you are only taxed on local source income (which is what you were doing).

The fact that you got away with a lower WHT by providing your Thai TIN but income wasn't taxed in Thailand doesn't mean you were compliant.



So you are bringing money into Thailand.
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Like I said.. if they bother checking all debit/credit cards

Another way would be to just OTC Bitcoin or USDT to cash locally. There's a big crypto community here with meet up for cash easily available

 

[Clank]

Marzio said:
What we where talking about here was article 4 that specifies who is considered resident and specifically the part that says that US doesn't considers you a Thai resident in the context of the treaty if you are only taxed on local source income (which is what you were doing).

The fact that you got away with a lower WHT by providing your Thai TIN but income wasn't taxed in Thailand doesn't mean you were compliant.



So you are bringing money into Thailand.
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Only money earned after 2024, so I think I'm good.

 

[blanco]

I went to the UOB (old Citibank) today to ask what their opinion is on the new tax rules.
They simply said that if you have "large" inward remittances, they will call and ask what the source of the money is and she said you can simply reply "savings". The calls will be recorded.
After this, the revenue/tax department may do random checks with people.
That's what they said today. It may change or you may get a different answer from another bank.

 

[Radko]

Jbb1 said:
Currently, I am exploring the possibility of establishing a new entity or transferring my residence to a country that might entail less withholding tax on my US-based investments.

At the moment, I reside in the UAE where a 30% withholding tax is charged on each dividend payout. I've been considering a move to Thailand for personal residency, which would potentially cut taxes to 15%, but is there anywhere else offering more beneficial terms?

I appreciate any insights or suggestions you may have.

Thanks!
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There are a handful of countries where the U.S. withholding rate is 10%
Martin has mentioned Romania and China, but I would go to Mexico, also 10%