Regardless of whether it is for your current holdings only or for your future investments only; if it is emigrating investments out or immigrating investments in, it is necessary to hold your assets compliantly to Internal Revenue Code statutory deferred tax authority that:
- maintains your tax deferred benefit
- operates without U.S. Person investment blockage
- is exempt from the Foreign Account Tax Compliance Act (FATCA)
- is exempt from Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts (Form 3520)
- is not a Passive Foreign Investment Company (IRS Form 8621)
- no Unrelated Business Income Tax (UBIT) distribution tax problem
- and all of these things are provided exempt from foreign investment account reporting and tax.
We have found that most U.S. Person’s (a person subject to U.S. tax) do not have any understanding of how to hold their foreign investments as statutory tax compliant and not subject to foreign country tax or reporting. Most have never met nor even spoken to, via any media, a foreign financial institution, financially connected person overseas nor paid for experienced U.S. and International Tax Attorneys advise.
Most U.S. Person’s are shocked to learn that any passive income from any overseas investment that is not specifically exempt from filing IRS Form 8621 as being a Passive Foreign Investment Company (PFIC) is a ”PFIC”. A ”PFIC” suffers 36.9% tax annually and high annual reporting costs that defeats all reasons to obtain an overseas investment that is a ”PFIC”.
Many American’s travelling may also be shocked to discover that overseas they have no value to become an investor client of a foreign financial institution, registered securities dealer or regulated investment product provider. Foreign financial account doors are closed on them and phone calls are disconnected.
The regulatory landscape of global enforcement has closed the doors to U.S. persons who are not recognized by foreign governments as FATCA and tax compliant.
Benefits of a Foreign Registered Investment Account for Your IRA
Outcome: This puts your IRA assets under your control without a change in your tax consequence and you will be able to purchase offshore any registered, regulated and recognized security globally without U.S. person blockage.
Firstly and effectively the only financial transactions overseas that can efficiently deal in USD on behalf of U.S. persons is a Foreign Financial Institution (FFI) which is FATCA compliant, has a FATCA identification number and is authorized to sign a W-8BEN-E box 29e. That document is required because the whole point in a FROM outside the USA investment account is a certain exempt FATCA status; which means that if there is a U.S. person or not becomes irrelevant. Because operationally this exempt beneficial owner status means that your investment dealings are those of a non-U.S. person who is deemed an investment professional and has the status of a foreign resident.
The U.S. person reports this regulated, registered, recognized foreign account annually on IRS Form 8938 as name, registration number and zero value because it is income tax deferred. U.S. Treasury “Report of Foreign Bank and Financial Accounts” (FinCEN 114) it is not reported until there is a withdrawal.
This Opens Doors to Offshore Investing Tax Compliantly for this Self Directed IRA
FATCA Proof Protocol
So as an analogy of how this process works, let’s look at how a Costco store membership opens their door for purchases. Anyone can walk into one of their stores and fill up the shopping cart as high as they want, but upon arriving at the cash register, their purchases cannot be made without showing a membership card. In an illustrative manner there is a blockage to a USA person going overseas who doesn’t have a “membership card.” With this as a practical guide you will see that unless you have registered your foreign investment account correctly from the start you are blocked from purchasing investments registered overseas.
We will show you how to follow a U.S. Treasury, Internal Revenue Service and FATCA valid path which has been created for you to open an offshore account which has unlimited rights to global investment choice. You will have no U.S. person restraints, restrictions or blockage. We’re going to show you how to have an overseas investment account so that you will be able to purchase from overseas any bankable investment that is registered in a government regulated and by governments recognized securities market.
When your IRA is registered in international retirement plan law overseas you invest as a deemed professional investor, as a foreign resident and with no U.S. person blockage.
Registration is Functionality for an Overseas Investment Account. For both U.S. and foreign Tax deferred compliance one must register the IRA with international retirement law which is the subject of Chapter 10. The foreign investment account must also fulfil U.S. FATCA rules which includes that foreign country having in place a U.S. Tax Information Exchange Agreement with the US. When your investments overseas are registered in a U.S. Self Directed IRA they are excluded from Passive Foreign Investment Company (PFIC) rules. Registering your foreign investment account in your IRA provides:
- Choice over investment class, type, currency and securities market
- No U.S. person restrictions, restraints, limitations or blockages
- Legal Non disclosure to any foreign government
- Recognized by Governments and Governance asset protection in foreign domestic statutory law, Double Tax Agreement (DTA) and Tax Information Exchange Agreement (TIEA)
- Retirement plan law that preempts foreign securities law and tax law
- Safety & Security in a multi-jurisdictional “Triangle of Security”
- An investment account pre-qualified as a professional investor
- Operational to investment dealings from inside or from outside the USA
- U.S. Person access to invest as a tax-free foreign resident
Purpose to expand your wealth manager selections globally
With purpose to expand your wealth manager selections from the top overseas award winners in the Extel Survey Awards, Lipper Awards, Starmine Analyst Awards, S&P Capital I.Q. and other top performers globally not directly accessed by U.S. Persons. As an example: the “offshore” mutual funds of Fidelity, Vanguard, Charles Schwab and etc. are not available to USA Persons. However, overseas registered funds of these same firms are all available via your foreign registered investment account. The world’s top asset managers gravitate to a tax-free operational environment, so why not you?