Question about tax, income from US securities for non resident

[lisic]

("hypothetical situation")

I have a brokerage account in US, and live in small country in Asia.
As a non-resident of USA, I submitted W-8ben form to them.

My country has strict regulation about direct investment to other country, They are not allowed poeple to invest with US brokerage firm .

But the US brokerage firm open my account without any hassle.

Anyway, for last year I earned about 200k d usd profit from my trading. (Most of those are commodities)

And because of the W-8ben form, I know I have to pay tax to my country but due to regulation, I didn't report to my country about my income.

So I paid 0 tax for now. and no one ask about the money.
Is this sustainable? I don't know what to do

Maybe I should make an US coporation and trading with that.

 

[Martin Everson]

riir said:
Is this sustainable?
Click to expand...

No

riir said:
I don't know what to do
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Paying taxes are better than going to jail or similar.

Either relocate or pay the taxes. Your just storing up problems for the future right now.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[jafo]

Martin Everson said:
Paying taxes are better than going to jail or similar.

Either relocate or pay the taxes. Your just storing up problems for the future right now.
Click to expand...

riir said:
My country has strict regulation about direct investment to other country, They are not allowed poeple to invest with US brokerage firm .
Click to expand...

Did you see that?
Would it be a good idea for him to "snitch on himself" like that? 🙄

 

[JackAlabama]

riir said:
("hypothetical situation")

I have a brokerage account in US, and live in small country in Asia.
As a non-resident of USA, I submitted W-8ben form to them.

My country has strict regulation about direct investment to other country, They are not allowed poeple to invest with US brokerage firm .

But the US brokerage firm open my account without any hassle.

Anyway, for last year I earned about 200k d usd profit from my trading. (Most of those are commodities)

And because of the W-8ben form, I know I have to pay tax to my country but due to regulation, I didn't report to my country about my income.

So I paid 0 tax for now. and no one ask about the money.
Is this sustainable? I don't know what to do

Maybe I should make an US coporation and trading with that.
Click to expand...

relocate, there are a few options in southeast asia where this works better and suitable for your budget which is already above average.
Philippines is a good starting point but there are others.
Personally would not stay in a place which outright prohibits investment into my target market/niche.

 

[lisic]

Martin Everson said:
Either relocate or pay the taxes. Your just storing up problems for the future right now.
Click to expand...

JackAlabama said:
relocate, there are a few options in southeast asia where this works better and suitable for your budget which is already above average.
Click to expand...

Thanks for the advices.

But I'm afraid I can't go to other countries cause I run a mortal-and-brick bussiness in Korea right now. 🙁

I think I should gonna form a coporation in US or other countires and pay tax there.

As far as I know, I heard that I can invest in American securities via coporation. Is this correct?

 

[JackAlabama]

riir said:
Thanks for the advices.

But I'm afraid I can't go to other countries cause I run a mortal-and-brick bussiness in Korea right now. 🙁

I think I should gonna form a coporation in US or other countires and pay tax there.

As far as I know, I heard that I can invest in American securities via coporation. Is this correct?
Click to expand...

I did not know korea is so strict with this.

you could do that, but it wont solve your problem. If you hold a us company is same as if you own us stocks (which are a us company too).
Maybe if you have a HK or SG or TW company with local director which in turn has Us assets might work. Then you invest in one of these countries, but the company there does invest smth else.

 

[lisic]

JackAlabama said:
I did not know korea is so strict with this.

you could do that, but it wont solve your problem. If you hold a us company is same as if you own us stocks (which are a us company too).
Maybe if you have a HK or SG or TW company with local director which in turn has Us assets might work. Then you invest in one of these countries, but the company there does invest smth else.
Click to expand...

Oh South Korean government allow people to have a US company, but we have to report Korean govenment that I'm making corporation overthere.

They just don't allow people trade with foreign brokerage firm, only via Korean borker firm. But I need to invest with US brokerage cause they have so many products to invest. not like Korean brokerage.

It's really strict right? That's why I'm always interested in offshore banking . They even don't allow transfer money from my Korean bank account to foreign bank account with my name. We have to report and get permission of that

Last edited: Sep 15, 2024

 

[JackAlabama]

riir said:
Oh South Korean government allow people to have a US company, but we have to report Korean govenment that I'm making corporation overthere.

They just don't allow people trade with foreign brokerage firm, only via Korean borker firm. But I need to invest with US brokerage cause they have so many products to invest. not like Korean brokerage.

It's really strict right? That's why I'm always interested in offshore banking . They even don't allow transfer money from my Korean bank account to foreign bank account with my name. We have to report and get permission of that
Click to expand...

well im not familiar with korean rules. Seems some sort of capital controls are in place.
Well, if thats ok and they don't construct this as you avoiding the ban, its a good way. Just open a simple us llc and ibkr for this, declare what you must 100% holding of the us llc and pay tax either on full or on distributed member share.

 

[lisic]

JackAlabama said:
well im not familiar with korean rules. Seems some sort of capital controls are in place.
Well, if thats ok and they don't construct this as you avoiding the ban, its a good way. Just open a simple us llc and ibkr for this, declare what you must 100% holding of the us llc and pay tax either on full or on distributed member share
Click to expand...

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Thank you !

 

[Martin Everson]

jafo said:
Did you see that? Would it be a good idea for him to "snitch on himself" like that? 🙄
Click to expand...

If you don't like laws where you live then move end of story. If you can't move then don't break the law period.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[jafo]

Martin Everson said:
laws
Click to expand...

Arbitrary rules set by a group of people that benefits them and stumps the rest!
It works....as long as they have "order followers" to enforce them. 😉