What about a US resident operating a foreign owned trading company and..

In regards to the rampant rule that seems to scare a lot of International FX brokers from allowing US residents, I wonder if there would be a problem if a US resident owning a company in say, Hong Kong,were to register with an FX broker using that country instead with the name of the foreign entity. The proceeds would stay in that country until some point in which a small amount may be re-patriated and liable for taxation. I don't see a problem with this, but then again I'm not a securities attorney.

I believe that is legal but there are many questions still.

1. Which country? And why?
2. How will you set up the foreign company?
3. How will you establish a bank account?

These are all legitimate questions as I have considered the same thing. I just don't know how to accomplish it without paying for a company to do it for me. And that can get expensive.

It is extremely easy to open an entity in Hong Kong as a foreign resident. They have no capital gains tax as well, its well regarded as a financial hub and very company friendly. There are some forms and the fees, but they are extremely affordable.

You can always hire an agent to help guide you through the process, there are many. They tell you how to setup the bank account. There are even virtual offices available that can provide a real address and an actual person answering the phone. It can all be found using google. Will PM you a link.

Would a foreign broker have a problem with setting up a brokerage account for a legal business entity? No. Why would they? The nationalities and other "attributes" of individuals or corporations who may control or have a stake in the account-opening entity are generally irrelevant to the broker.

Is it difficult or expensive for a US resident to set that up? No, not particularly. Whether you decide to do it yourself, get a local contact, friend or relative to help, or hire someone in the business of doing that, it's easily doable in this online day and age, even without leaving your easy chair. You'll need a local registered agent... again, not expensive in most popular countries, if you have no local contacts.

But going that route still doesn't solve that pesky little FBAR issue. Under the Bank Secrecy Act of 1970 (love the Orwellian name, referring, of course, to forced bank anti-secrecy / full disclosure measures), every US taxpayer (individual or corporate, citizen or not, resident or not) must report details of all their non-US financial accounts by June 30th every year (no extensions), if the combined value of those accounts exceeds USD 10,000 at any time during the tax year.

Critically, you need not either own or have any financial interest in the accounts -- mere signature or other authority is sufficient to trigger FBAR reporting requirements. Signature or other authority is defined broadly enough to include every technological means that you can think of, incl. debit cards, smart (or not) phones, any electronic communications, etc. Penalties for failure to file can be extremely stiff, as in potentially greater than the value of the accounts in question.

Welcome to the land of the free.

Thanks for the info nhct, I was not aware of the fubar act That's fine though, I'm not trying to avoid taxes or do anything illegal here.

There is hope for us American FX traders yet. We need a civil rights movement.