Offshore Broker

Offshore Broker

Tax is the driving force behind most ‘offshore’ activity. With the Invest Offshore solutions investors are able to conduct online trading activities in a more profitable fashion. Often, taxes levied by an investor’s home country are critical to the profitability of any given investment. Using offshore domiciled special purpose vehicles an investor may reduce this burden, allowing the investor to achieve greater profitability overall.

Another reason why ‘offshore’ investment is considered superior to ‘onshore’ investment is because it is less regulated, and the behavior of the offshore investment provider, whether he be a banker, fund manager, trustee or stock-broker, is freer than it could be in a more regulated environment. Contact us today to learn about completely confidential offshore online trading products.

How to obtain deferral on gains and accumulations of capital overseas:

There is a misunderstanding as to what type of businesses the U.S. provides tax deferral overseas. Is it a trading company or a company dealing in capital overseas? The fact is that the U.S. provides tax deferral on overseas trading businesses but not on overseas firms dealing in capital.

Your foreign company needs a legal basis for a tax deferral structure that is not effectively connected to the USA and is a foreign resident. The Foreign Account Tax Compliance Act (FATCA) does not define the difference between trade and capital. FATCA and the IRS do define by both statutory law and intergovernmental agreement the only type of foreign financial account that U.S. individuals can use for deferred income and accumulations of capital overseas.

Publicly there is confusion over the fundamental question of regulatory reporting and tax compliance overseas, when using an offshore broker.

Where you have a company effectively connected to a U.S. Person you definitely have a reporting obligation when you are a director or when you effectively command and/or control an overseas company.Whether or not that leads to a further reporting or further inquiry, whether it is under the tax code or FATCA, or what have you, is really beside the point because there are three issues:

  • Establishing a foreign company does not determine residency
  • Where the company is controlled determines the residency
  • Determining residency depends on who is the owner with the command and control

You need a foreign company to collect commission, receive your contract buyout and to collect any payments in order to get paid gross rather than suffering current tax. You need a Tax Department Certificate to the effect that your foreign company has residency in that foreign country for Double Taxation Treaty purposes.

Photo credit: AndYaDontStop via VisualHunt / CC BY