Company Formation for the purpose of Trading (CFDs, spot etc)

Tnx man, you alone might be worth "the trip" of opening this thread Yeah was rather surprised someone was willing to disclose this type of things When I tried to quote you... the post was gone... Tnx for come here again.. didn't had the chance to click on your profile Clicked on QUOTE and it was gone, all of it

(to others also)
BTW, I also found some awesome benefits of C CORP but do not want to promote it.. Might be not hard to find but also heavily depends what one is looking for...
So again, I think that one can hardly get wrong with rather simple LLC... And maybe attach S-corp for tax reason... But with C CORP it is much harder to find or to exploit the edge of course.. because yeah, TAXes... BUT again... ok.. You can google, youtube or just ask FEW top pros.. they do differ on the subject, heavily... again depends what one is looking for... For some small biz that is looking how to put Thanksgiving turkey under the company expenses, claiming it was a business meeting expenses (with family - co-owners, shareholders etc...)... this LLC+S-corp might be BINGO... But for guys that really appreciate the CORPORATIONS and what can be done with them.. how there were tested through the sands of time.. Not just on paper, but in courts... And LOVES the CORP game... Might not have a choice to have at least one C... Just my 2b ppl... to each it's own.. Still haven't made ironclad decision, but I am attracted to C the most Sure, with LLC and maybe even S on the side... BTW if taxes would be the MAIN concern.. I might not be looking US at all...

Also it heavily depends on the personality.. Some love the CORP world... and everything about it... Some love the (small) BIZ world... Usually, quite different personalities (needed)... And the same solutions that might bring good profits in small business, the way they "solve" things.. could cost many lives in the corp world... So either someone is more of a DIY guy or one likes to delegate, PAY (invest in) PROs to set the things right

It is also funny to see the personalities reflect in trading.. Some are so fixated on getting the "ZERO risk" trade.. seeting the SL0 as soon as possible... maybe not letting the trade to breath.. because it does go in NEG before it might go to POS... (real) CORPs guys are more like... "cutting the losses", exposure, "let's do this" style... "cut it fast and cut it deep".. which more "small biz" people see as a SIN.. they would rather go DOWN with the company than to admit they were wrong.. or hire/listen to someone...

BTW, just my opinion! To each its own... We need both types...

And it is interesting.. some people here dreaming about putting 10-100k deposit, retirement money or pension or life-savings in the TRADE account and dreaming of "FIX" annual income.. Some dream about rollin 100USD to 100M if not 100B.. and some dream about becoming THE BROKER himself... or even (INVESTMENT) BANK.. It is very exciting to see different personalities in the trading world also... That is why I alway suggest to breakdown trade(r) into components and he might have the JUICE even if he might not be profitable.. at the same time, some (very) profitable ones might just be on the POSITIVE side of extreme risk and luck For the time being at least...

So, to sum up, it comes down to the WHOLE picture... of what the main objective, strategy is... Then the COMP/CORP solution might appear naturally, specially with the help with some PROs... or at least some clips online that sum up the best cases/templates for certain types

Any other questions? Btw reconsidering Caymans, paralell to EU/USA setup, since so mucg mess in the world atm, but watching closely what brexit and/or possible impeachment might bring, watching closely but I thing hedge migh be best, just in case

Have notices that for most of the traders.. might be cheaper to trade privately... Was thinking about one possible setup, in US for example.. and it seems one would have to invest quite a good amount of time/money to get things "right".. And since this "corporate veil" seems to be crap this days anyway, or much easier to pierce than before... perks were disappearing... exposure was rising... But there are still benefits, for example, to find a bridge to CO2 trading for US citizens..
And also some brokers do not accept private investors/traders at all... Some very attractive ones that do provide good tools... and might be worth it just by that... So just not to make some commercial... You can figure.. some BANK based trading platforms... really dislike private citizens as a clients for some reason For some more serious tools/access at least... In particular, they accept only "Institutional Investor"... but yeah... we can argue what that is But absolutely no PRIVATE /natural persons, it seems.. Also certain events... that might be beneficial... demand that you are from a company at least, not private...

BTW, UK might offer some interesting company formation solutions, if anyone is interested... Maybe it would be even better to formate now, before brexit is complete (if it happens at all) just in case they might come with certain surprises after... Because things, IF/AFTER brexit might radically change, limit... Right now it is still relatively free for formatting, at least for major part of the world.. with nominee directors at least...

Ok just found one VERY GOOD reason to formate a company for trading... I thins CHEETAH thread https://www.energyexch.com/showthrea...6#post12619206 we try to hunt for the kill, cheetah style.. 100% per trade.. and since markets would be WTI, GOLD... and we plan to trade at 500:1... it is rather difficult to find good, reliable broker that would provide 500:1 for GOLD, WTI... AND offer the NO NEG PROTECTION at the same time... Found one that I believe would be good for this BUT it offers everything desired EXCEPT the no neg balance protection... So because anything can happen, specially in GOLD, WTI at that kind of leverage.. and liquidity might not be always there... flash crashes do happen... I would be much more comfortable trading via company/corporation with the corporate veil... This veil has to be carefully taken care of if we want the benefits of it.. because it can be broken rather easily if enough money would be in play and one would not be careful... you can youtube about this or ask here and I will attach it.. how we can greatly increase corp. veil protection in that particular case...

So primary reason atm, to open a company (for me), would be to open 500:1 account for WTI, GOLD.... to get "neg balance protection" just in case...
Even though the broker in question has auto-stop at 50% but that is not guaranteed...

Ok just made some good (trial) trades in a broker that does not offer neg protection but have otherwise some very desirable parameters I am looking for... So anyone have a good experience how to open a company to trade ICMARKETS (in particular) over it? The idea is to have additional (corporate veil) protection just in case of some big drama, flash-crash etc... They do offer CORPORATE account... So now would just like to here some REAL-LIFE example if anyone opened a company/corporate account with them and what to look for.. Also what to look for overall for a setup like this... Like COMPANY FORMATION+TRADING ACCOUNT (IC Markets in this case).... tnx.

People, crazy times... Currently testing some strategies in ICmarkets, should thinks go well... will have to open corp account, to trade max/large positions at 500:1 without no neg protection...

Also due to recent developments it should be interested to considering opening UK company BEFORE they might add some restrictions... Currently... much talk about future policies.. concerning everything... So might be best to be locked-in before the brexit actually happens... If one does believe in the UK anyway... But as I say, if not sure, hedge ATM it is very cheap/fast to open UK company, you can also hire nominee director very cheaply, all legal...

Will keep you posted, if anyone is interested in this thread anyway? Please at least like so that I see anyone is actually reading this (thread), tnx...

Wonder if this would also be a way to avoid Tobin Tax: open a Trading Company in the UK, or Luxemburg, trade from home, cash a salary. End of operation, sell the company.
Just pay German taxes on the salary and the sale, no transaction costs.

Well... exactly man... That was the purpose of this thread, to stimulate people in that direction. If you think it, you VOTING that way... so if enough of people do this, they might reconsider this.. So... as far as I know, German people are allow to incorporate companies outside of the country, right? At least they are alow to OWN some company/stocks outside the country... Almost sure about that.. So once we are outside of Germany, we can trade by rules by another country... There are some tax issues later, "world income" etc.. but to avoid Tobin Tax, that might be possible solution. Do you have any details about this? You mentioned it will only apply to german stocks? Tradeded just within Germany (by german people, german companies)? If that is the case they I see a real potential to avoid it with this company formation... Unless there is some direct law preventing this... Does it look plausible so far? I would write e-mail to authorities (responsible for Tobin Tax) and ask them point-blank, why not? What do you think?

-No way of preventing Tobin from applying next year. It´s agreed by both parties.No email campaign, would change it..You would need 500000 letters, and that is not a happening thing. Germans are "obedient people" like to pay taxes.The only thing that moves them massively now is climate change , which is a good thing.
-The plan is to copy the French model, which is already in place. Only on national stocks and big companies. (how dumb can you be!!).
-France started with 0,2% and increased it lately to 0,3%.
-I trade Forex and Commodities, so far they are not affected...but it could change...Stupidity has no limits.

Here´s some update, in German though:

https://www.tagesspiegel.de/wirtscha.../25224070.html

Tnx for the update man! With "voting" I mean... incorporating elsewhere and make money/profit there.... assuming that is perfectly legal... And if many people will do it, they might re-consider this... Might another subject but this thing happened before, in US for example, there are trillions off-shore and they are trying to either punish this or stimulate money to come home... So yeah, I mean, I am pro-taxes and everything but it is very demoralising to see how they are wasting it... So I hope there will options around the world where we can trade as free as possible... I mean, having internet and all... they are living in ruins... thinking the capital won't follow the path of less resistance So keep us posted about the UK/US etc.. company formation in order to avoid Tobin tax for germans/french?

Well seems at the current political rollercoasters... Seems the "HEDGE FUND" setup would be best, meaning having some off-shore company in some established, relatively reliable and somewhat regulated environment.. with zero corporate tax and zero income tax, if not for other reason... to avoid some tax people camping at your office trying to find something, because if there are no taxes or income tax=corporate tax.. meaning there are no difference, motive to avoid some tax... then there is nothing to investigate... Because it is a nightmare following the ever-changing rules, specially for smaller companies/corps... when one would have to deal with this for whole day... AND also having on-shore company that bills the off-shore company for its services... Therefore you have, I believe, best of both worlds....
Earning/trading off-shore company, totally legit... And also having nice company where ever you live or work from, pay all the taxes and all... This option is maybe somewhat more expensive but as long as you are trying to be serious trader.. that would be the setup to lookup for, I believe...

So Having off-shore company/corp to trade freely... and pay the INVOICE to on-shore company where you (and your people) are employed but since you only INVOICE to off-shore for the expenses you do have, seems there won't be much corp tax to worry about either

But for many traders, trading privately (as natural person) still seems a good bet, for quite some PROFITs

I think you'd need a very high AUM to cover the costs of that.

Well maybe for FULL hedge-fund setup (and not even then really or depends how you define "very high AUM"), when one has to setup much differenty in order to be set/eligible to collect others people money, even in (some) offshores... BUT for BASIC trading setup.. meaning, one company in off-shore, the other on-shore... and on-shore issuing invoice to off-shore... That would be rather "cheap"... few k USD for off-shore setup (then opening brokers account) and one for on-shore.... And that is it You have on-shore comp or even employ yourself.. issuing invoice (for expenses) to off-shore and that is it... For example, one can setup comp in UK or US... with nominee director even.. And then one off-shore or in some country with zero corporate tax and zero income tax... And that is it... Quite some to choose from https://en.wikipedia.org/wiki/List_o...s_by_tax_rates

Ok so the total setup would cost, for 2 companies... up to 5k USD... and annual costs about 1-2k... out of blue.. fix costs... Which means, once one is set... has to make only a few k USD for running costs and one might save on the taxes easily.. So we are talking about a trader that makes like 5-10k/year (absolute) profit, or less..
And "very high AUM" would be at least 1mio... I think..

Guys, if you are interested in company formation, also for tax reasons.. Do check corporate and income tax in tandem... Also to compare to your resident income tax...
Because profits, even if already taxed by corporate tax... have to be taxed "someday" at which point income tax kicks in... If nothing sooner, when you close down the comp... since every comp has its cycle.. I have provided some clips before..

Also, have found out that, what I suspected.. the offshore options are somewhat shrinking... Which is not so relevant for prop trading but still... Some brokers, banks.. might distant themselves from some off shores... so I think it is best to look for "first tier" off shores on low-tax on shores BTW... Caymans are still interesting but recently Isle of Mann came to my attention so we will see.. But overall UK company formation seems to be the sweetest option.. "Real" UK company... and then maybe adding some UK tax heaven later... Again... MANN seems to be interesting... Yeah it is not good for certain purposes since they do cooperate with "others".. But in my case that is a good thing

But most importantly... The main purpose of this thread was to help (stimulate) certain people, US people in particular... to think about how they could gain access to certain markets or instruments... CFDs... CO2 markets... and even to higher leverage... And I think/believe (you have to check it yourself, to be sure) company formation might be one of the best and legal options I there... UK or EU company formation seems to provide a sweet spot of security, reliability but still with enough access to certain brokers, markets... You can deal with profits and taxes later... once you make a good amount At which point you can hire tax-legal professional to make everything legal and binding.. in tune with your local taxes/laws so that all can be good in the garden

Guys latest conclusions... Would advise for traders to think about company formation option if they would like to check/grant access to certain markets that they might not have as a US citizens for example (CFDs, CO2 markets). So that is about it.... All other purposes I would not suggest, this offshoring, specially for the purpose of lower comp/corp taxes... is getting harder and harder (takes a lot of time/effort to be in the loop also and it is also easy to make something wrong, unintentionally)... So would advice for all of you to focus on your CORE (trading) and deal with some EPIC profits later

Also, some very positive news, there were some rather recent development by some big(er) banks, offering interesting trading platforms (for private and business) on all markets, energy and metals also.. So if you can access market and do not have crazy profits (and trading prop), might be best to stay trading as person (natural)...
If you do not have access to certain markets, you could check if you could have that access over company (formation)... All the rest you can deal later... Dealing with profits would be a sweet "problem" And also, if we are talking about business/company, first have to generate good profits profits.. then deduct expenses and then deal of what is left) So the conclusion is, company formation, as suggested here, might be the best option in case you do not have access to certain markets (due to some regulations) and you could have via company, which is much cheaper than many think, just do not overcomplicate things/overhead etc...

That would be it ppl

Guys some news... Just saw some EPIC trade tools available for comp/corp/inst traders.. I mean they are golden.. But they do not touch the retail with the stick
So important benefit in order to get ACCESS to tools, accounts, events... Anyway, found some epic UK and US company formation options... Would avoid anything remotely associated with offshore, tax-heaven or anything on the sort... Would stick on-shore... Set-up simple comp-trading account setup, while keeping FIX costs to absolute minimum.. I mean you do not need anything really, for PROP trading... Well yeah might invest in some "image" in case some broker would have doubts about taking you, but you get the picture...

Would like to know anyone already opened company precisely because of this? Either to gain access to certain markets (CFD, CO2,...) or to get another asset protection in case broker provides no neg. balance protection... or in order to get better deals, tools at certain brokers or at least be able to open an account at them (the brokers that accept only....)? Would like to know if you have some good examples of how you done it in US, EU/UK...

There are some crazy good deals, companies, websites that provide good overall service, but would like to cross-check with some real-deal traders that set it up for trading, because as they say, devil is in the details and you get something from practice that might be mindf... that you wouldn't think about it before... For example..
bank account is the hardest to open as some banks do complicate things...

Do you want to open a brokerage that accepts US traders?

Well now that you asked. Maybe it would be a good idea, right? Seems market is much under-exploited right? I mean just check CO2 market... for the last few months been swinging around certain price like free money, for now... Not sure how many US traders even want to trade it since it is not lucrative enough so far I gues...

Were you really asking me if I want to open brokerage company that would accept US traders? Well maybe that would not be necessary since I wanted to stimulate traders to think about other options, either forming a company themselves and if they would prefer, sure some group (sharing) company could be formed so that they could trade over it somehow in some legal way of course, right? So option 1, they form a company, link brokers account, trade... Or someone could provide them with share in some company that would trade according to their wishes, or they would, as owners... I believe that would be a legal way for them to trade markets that they can not as citizens.. Someone correct me if I am wrong.

Well... this topic came into my attention once again... Because there are quite a few (reliable, respectable) brokers that allows "Professional account" (in EU) that would allow for significantly higher leverage options... In particular, I believe one of the the following conditions can be fulfilled sooner, if one is trading over a company. What do you think? Please find below the current conditions one must meet (2 of them) in order to qualify for "Professional Trader".

Eligibility/qualification for PRO traders (at I think most/all EU brokers?) listed below:
You have to meet 2 of below criteria

1. Have a financial portfolio that exceeds €500,000
2. Placed at least 10 relevant trades in significant sizes over the last four quarters
3. Work, or have worked, in the financial sector for at least one year

As some of you already know, there are many benefits when one is trading over a company... One is taking much more serious, because every can be a trader with 1EUR/USD deposit, but when trading over company it seems much more serious, even if you do not make any (significant) return.

Anyway, hope you like the idea and would like to hear more from someone that tried to qualify as PRO trader and if trading over (own) company helped?
There are at least 2 conditions/criteria that would seem much more plausible if one would be trading over company. First is condition 3 (financial sector), then second is "significant size" which could be done with leverage and also the amount is not defined so maybe it can get through even at relatively low AUM, specially when trading with high(er) leverage which would result in rather good trade volume.