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Offshore Banking and Asset Protection, Offshore Trading
That's slightly untrue as I'm irish I read a lot about the schemes etc. The double dutch and double irish will be shutdown in next 4 years to be potentially replaced with a patent box.
Its either Luxembourg Malta Gibraltar isle of man or hong Kong for European entities. Predominantly most of the former British colony's have some beneficial arrangements.
What those multinationals etc are doing is even a grey area in Ireland they have no HQ anywhere in the world is the line they tell the irish tax authorities. They route the money to the Bahamas to move out of Europe.
The larger irish companies operate from Luxembourg Malta or Gibraltar (gambling). private trading companies are known to operate from Gibraltar.
There are many ways this is all done legally.
The former British prime minister stored her house in the bvi to avoid inheritance tax so excuse me for pointing out what is perfectly legal to do .
If I was American I'd probably look to Delaware as pointed out earlier on the thread.
Hi Mike,
A key considerations is whether or not your broker and trading platform is domiciled in a private jurisdiction. I represent a well reputed, regulated private offshore brokerage that may interest folks here. Can we connect re: the possibility of offering our services to your forum members? I read your advertising/promotion policy and hope this post complies.
FYI - we do not accept US citizens or residents as clients.
IMO if anyone is doing this I hope you do something wrong and either go to jail or get put out of business by an IRS penalty.
I'm with Charlie Munger's philosophy that people doing well in life in the US should have a moral obligation to not scrape the last dime possible.
It is not like you are going to get anything out of doing this anyway if you are successful enough to do this. You have already gained as much marginal utility from the dollar as you are going to get. At that point fanning the flames of avarice is just a bad strategy for your own personal well being. It is like a sex addict or alcoholic thinking that more sex and alcohol will lead to greater happiness. Duh.
Pay your taxes, enjoy the fire department and the roads and try donating to something that is not a tax strategy.
If this is addressed towards me, you have no idea what you are talking about. I don't live in the US. My residence is in Ecuador. However, as a citizen, I am required to pay taxes on my income -- even income earned outside of the US. The USA is the only country in the world that does this to its citizens. There is an exemption but it is only on the first 100k per year.
Your advice to "move" is completely wrong and not based on facts.
Every person should consider the best legal way to minimize their taxes. As an example, please refer to the following link to Jim Rohrbach's performance numbers for his newsletter - Historical Results | Stock Market Timing and Alerts | Investment Models. You will note that using his best results, an initial investment of $10,000 grows to $9,233,423 during the 43-year period. Now, you can pretty easily take those numbers into excel and calculate the effect of taxes on your portfolio. Using a 40% tax rate, I get to a final number of $647,669. Not quite as impressive anymore...
In the above example, I could set up a company and reduce my tax rate to 30% until I start withdrawing money. Lets say I keep all my money in a company, once I retire I can effectively determine my tax rate by varying the amount of salary / dividends I withdraw. At a 30% tax rate, the amount grows to $1,288,907 during the same period.
I don't think most people realise just how destructive taxes are to wealth-creation. In my situation, I constantly need to consider whether I want to hold a stock for six months or longer. After six months it is considered a capital gain in Luxembourg and becomes tax-free. Suddenly, a stock that has a 50% move in 2 months and then goes sideways for 4 months can still be quite attractive...
Mike,
I assume you've seen this info whilst considering renunciation, but just in case:
"The American Jobs Creation act of 2004 amended Section 877 again.[8] Under the new law, any individual who had a net worth of $2 million or an average income tax liability of $139,000 for the five previous years[9] who renounces his or her citizenship is automatically assumed to have done so for tax avoidance reasons and is subject to additional taxes. Furthermore, with certain exceptions covered expatriates who spend at least 31 days in the United States in any year during the 10-year period following expatriation were subject to US taxation as if they were U.S. citizens or resident aliens."
(source: Wikipedia's article on 'Expatriation Tax' ...extra grain of salt needed )
Elsewhere, a bit more recent, though still outdated figure of $145k as of 2010 for US income tax liability is listed...see renunciationguide[dot]com page titled "Exit tax on renunciants." (I am not affiliated with that site in any way, so no promotion of it or any services/links to services is intended.)
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