Avoid those brokers that require W-8 signing | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

brokers for those in the UK 15 replies

How do I avoid those rangy thing... 18 replies

Signing up for VWB 17 replies

All US brokers require a one million dollars by 31st july? 10 replies

Avoid those brokers that require W-8 signing

  • #1
  • First Post: Edited Jun 13, 2012 12:56pm Jun 11, 2012 9:32am | Edited Jun 13, 2012 12:56pm
For those who want to hide their forex profit from tax, beware opening account with brokers that require W-8 form to be signed.

W-8 Form is required to be signed by most brokers like IB, FXCM and OANDA.
Do not take lightly signing such a form.

Using the data on the W-8 form, the US tax office feeds information on your forex trading profits with tax offices around the world.

Unfortunately for many countries, people who work in tax offices are corrupt individuals and they use such information to extort money from citizens who trade at those brokers.

W-8 form, more often than not, is used for extortion in many countries.
  • #2
  • Jun 13, 2012 4:43am Jun 13, 2012 4:43am
Quoting newbie168
W-8 Form is required to be signed by most brokers like IB.
Do not take lightly signing such a form.

The US tax office uses data on W-8 form to exchange information with tax offices around the world under numerous US tax treaties.

Unfortunately for many countries, people who work in tax offices are corrupt individuals and they use such information to extort money from citizens who trade at those brokers.

W-8 form, more often than not, is used for extortion in many countries.
paranoia is a crime
In the days of old when sailors were bold, and seldom if ever contented.
  • #3
  • Edited 7:22am Jun 13, 2012 7:05am | Edited 7:22am
UBS Singapore with 130 private bankers dedicated for Indonesian clients has decided to waive the W-8 form for Indonesian clients who are not US citizens/residents and not trading on US stocks/bonds.

Obviously since UBS Singapore sees the danger of this form being misused.
Moreover Indonesia is the main market for UBS Singapore, with junior private banker needs to collect AUM of at least USD50million during his/her first year with the firm in order to survive. Most tenured UBS private bankers have managed to collect AUM from Indonesian clients ranging from USD400millions to USD2billions per private banker.

Gayus, a low ranking tax officer, manages to extort more than USD11millions from wealthy Indonesians. Gayus is a beneficiary of the information from W-8 form courtesy of the US IRS, collected from American private banks like CitiPrivate, JPMorgan, etc in Singapore.
http://www.thejakartaglobe.com/home/...h-trial/501748
  • #4
  • Jun 13, 2012 7:56am Jun 13, 2012 7:56am
AFAIK, every non-american client that opens an account with an american broker has to sign this form - otherwise you will have to pay taxes in the USA. Maybe there is a problem with a scumbag official in Indonesia, but that doesnt mean that its problematic in every other country.
  • #5
  • Jun 13, 2012 8:22am Jun 13, 2012 8:22am
The problem with newbies post is that he doesn't realize that most of the worlds brokers are NOT in America, and therefore don't require people to sign W-8 forms... these forms are ONLY required by American brokers.

In about 10 years of trading with some 7 or 8 brokers from America, Europe and Australia I have only ever had to sign W-8 with American brokers (I'm not American).
In the days of old when sailors were bold, and seldom if ever contented.
  • #6
  • Jun 13, 2012 10:14am Jun 13, 2012 10:14am
Quoting pt49
The problem with newbies post is that he doesn't realize that most of the worlds brokers are NOT in America, and therefore don't require people to sign W-8 forms... these forms are ONLY required by American brokers.

In about 10 years of trading with some 7 or 8 brokers from America, Europe and Australia I have only ever had to sign W-8 with American brokers (I'm not American).
+1

the end
  • #7
  • Jun 13, 2012 11:09am Jun 13, 2012 11:09am
Hiding profit/income from forex trade is not only particular to Indonesians.

I guess you guys are reporting entirely all of the forex profits to tax office in your respective countries. If so then it's no problem at all with W-8 form.

I am just giving warning to those who want to hide their income from forex tradings. US IRS has made the tax men in your countries fully aware of it.
  • #8
  • Jun 13, 2012 12:09pm Jun 13, 2012 12:09pm
Quoting newbie168
Hiding profit/income from forex trade is not only particular to Indonesians.

I guess you guys are reporting entirely all of the forex profits to tax office in your respective countries. If so then it's no problem at all with W-8 form.

I am just giving warning to those who want to hide their income from forex tradings. US IRS has made the tax men in your countries fully aware of it.
what abt tax declaration in Singapore? u seem to know quite alot of stuffs concerning UBS Singapore,r u working in there or having friends working in there?
  • #9
  • Edited 1:12pm Jun 13, 2012 12:55pm | Edited 1:12pm
Quoting fxking
what abt tax declaration in Singapore? u seem to know quite alot of stuffs concerning UBS Singapore,r u working in there or having friends working in there?
Singapore does not tax foreigners on profits generated through investments with financial institutions. That's why its a haven for wealth from surrounding countries, just like Switzerland long ago.

I am in the Singapore private banking scene. It's no secret that banks from all over the world open shops in Singapore not to tap on the local Singapore wealth, rather to tap wealth from Indonesia, Malaysia and other neighboring countries. Besides those from well-known global names, private bankers from less known institutions like Clariden, LGT, Julius Baer, Pictet, Sarasin, Lombard Odier, EFG, Northern Trusts and Couts, fly every Mondays from Singapore to Indonesia, Malaysia, and only to come back to Singapore on Fridays.

Nowadays because of the requirement of W-8 form signing, many private banks happily set up BVI/Caymand entities to help their clients avoid paying tax in their home countries. Such amenities are beyond reach for average Joe. CitiPrivateBank requires USD10million; anything less than that would put clients into Citigold. JPM, Morgan Stanley and Goldman allow USD5million for a start, while UBS, the bank most popular with Indonesians, have a much lower barrier at only USD2million for now.
  • #10
  • Jun 13, 2012 1:20pm Jun 13, 2012 1:20pm
newbie168: what services do you exactly get with this? Is it only about avoiding tax and a little investment advice?
  • #11
  • Jun 13, 2012 1:22pm Jun 13, 2012 1:22pm
Quoting newbie168
Singapore does not tax foreigners on profits generated through investments with financial institutions. That's why its a haven for wealth from surrounding countries, just like Switzerland long ago.

I am in the Singapore private banking scene. It's no secret that banks from all over the world open shops in Singapore not to tap on the local Singapore wealth, rather to tap wealth from Indonesia, Malaysia and other neighboring countries. Besides those from well-known global names, private bankers from less known institutions like Clariden, LGT, Julius...
thats sound really impressive! in your opinion,which bank has the best system for spot fx trading and how much is the initial deposit? also,which bank is the 'safest' should the banking scenario turns sour in singapore? thanks!
  • #12
  • Jun 13, 2012 2:40pm Jun 13, 2012 2:40pm
Quoting shrike
newbie168: what services do you exactly get with this? Is it only about avoiding tax and a little investment advice?
A private banker is useful, not only for avoiding tax and giving little investment advice:

If a client becomes incapacitated/loses his memory, he can ensure that his wife/children continue to nurture him by using trusts set up when he’s still healthy. After all who wants to be disinherited by a rich father; the banker will pay a visit from time to time to see her/his clients conditions before regularly distributing money according to the trusts. Some men even use trusts to ensure that illegitimate children from his secret lover get some inheritance in case he suddenly dies.

Trusts is also used to legally insulate a person’s wealth from creditors, as many lenders nowadays require personal guarantee. So a person can be bankrupt and still rich at the same time. Since he is no longer the owner of the riches, but merely just the beneficiary/user of such riches. The two differ so much in terms of legality and cannot be contested in the court.

With a private bank account, a client can access all markets all over the world, and tap into investments from an already-closed investments/funds/private equity. e.g. do a carry trade on Turkish Lira deposits earning 10% interest while paying only 1% interest on USD loan.

One can grow their portfolio with a multiplier effect and some calculated risk. For example, for this forex, why sending hard cash to brokers. Instead one can borrow USD loan at 1% pa interest rate backed by an investment in a Russian Rubble bond earning 8% pa interest rate. Just borrow 40% for the amount of the security is already quite conservative, in case the Rubble drops in value to the USD.

Some private banks offer “interest only” loan for buying properties, hence no scheduled principal repayment is required. My client who does not like to invest in stocks/bonds and only comfortable with regular deposits have profited more than USD25million from Singapore properties he bought using “interest only” loan from our bank. Back in 2000, downpayment for Singapore properties was a mere 10 to 20%. With the growing demand for rentals and increasing properties prices, he has netted more than USD25million in his bank accounts now, from a mere USD3million initial capital back in 2000. Such success is quite common among those who have invested in Singapore properties. Unfortunately such property investment would be a lot riskier now given Spore properties have reached its peak.

A private bank account can help your offsprings meet their soulmates who come from a similarly wealthy background. Those wealth seminars regularly conducted at unique places such as a castle in Scotland for your recently graduated daughters/sons can seed romance or even business partnerships as uncovered by Wall Street Journals http://online.wsj.com/article/SB1000...294055336.html
  • #13
  • Edited 3:23pm Jun 13, 2012 3:04pm | Edited 3:23pm
Quoting fxking
thats sound really impressive! in your opinion,which bank has the best system for spot fx trading and how much is the initial deposit? also,which bank is the 'safest' should the banking scenario turns sour in singapore? thanks!
Naturally most of the prime broker banks offer good FX tradings. I wouldn't name name but most should have developed a good system and a competitive spread. With regards to safest, if you have your assets in securities such as bonds/shares, and if a bank is bankrupt then those bonds/shares should be safe. It's only the cash that is in great danger in the event of a bank's bankruptcy.

That's why for FX trading at a currency broker, it's better to use bank guarantee. Or if you can afford becoming a private bank client, you do FX trading at the very same bank, make sure the shares/bonds that you buy can be used as collateral for FX tradings. Build up your FX portfolio conservatively at max 30-40% of the value of your bonds/shares, incase the shares/bonds drop in value, you don't have to unwind your FX position or top up for more cash.
  • #14
  • Jun 13, 2012 4:06pm Jun 13, 2012 4:06pm
Sounds a bit like what is called a 'family office' in Europe, just that its 'outsourced' to a bank..
  • #15
  • Jun 14, 2012 1:49am Jun 14, 2012 1:49am
Quoting newbie168
Naturally most of the prime broker banks offer good FX tradings. I wouldn't name name but most should have developed a good system and a competitive spread. With regards to safest, if you have your assets in securities such as bonds/shares, and if a bank is bankrupt then those bonds/shares should be safe. It's only the cash that is in great danger in the event of a bank's bankruptcy.

That's why for FX trading at a currency broker, it's better to use bank guarantee. Or if you can afford becoming a private bank client, you do FX trading at the...
but as much as i know,their offered leverage for spot fx trading on their platforms r quite low actually,u cant find any private banks with leverage of 1:500 or even at 1:100-200,right?
  • #16
  • Jun 14, 2012 2:12am Jun 14, 2012 2:12am
more like between 1:1 and 5:1 ... I should think.
In the days of old when sailors were bold, and seldom if ever contented.
  • #17
  • Jun 14, 2012 12:44pm Jun 14, 2012 12:44pm
Standard maximum leverage for FX trading at most private banks is 1:10.
For leverage beyond 1:10, the clients need to be experienced in FX trading,
and further acknowledgement/agreement on the risks is required.
  • #18
  • Jun 14, 2012 1:01pm Jun 14, 2012 1:01pm
Quoting newbie168
Standard maximum leverage for FX trading at most private banks is 1:10.
For leverage beyond 1:10, the clients need to be experienced in FX trading,
and further acknowledgement/agreement on the risks is required.
thats pathetic,isnt it?
  • #19
  • Last Post: Jun 14, 2012 6:08pm Jun 14, 2012 6:08pm
10:1 is only pathetic if you don't know how to trade, or have very little money (in which case you don't know how to trade)
In the days of old when sailors were bold, and seldom if ever contented.
0 traders viewing now