Suitable structure/residency for active trader (Stocks, futures, options)

[JustAnotherNomad]

Copying your post from the other thread. If there is a risk of doing business in UAE, where can I open an offshore entity? Can I control the offshore entity from UAE to avoid regulatory/license risk?

I honestly wouldn't worry too much about this at this point.
I would try reaching out to UAE-based traders. I'm sure there are groups on Meetup, Facebook etc.
See what they do.

Of course you can also set up a BVI company or something like that and use that to trade, but I would guess that they would still report you under CRS as the UBO. So not sure how much of a difference that would really make.

 

[RAGAV]

I honestly wouldn't worry too much about this at this point.
I would try reaching out to UAE-based traders. I'm sure there are groups on Meetup, Facebook etc.
See what they do.

Of course you can also set up a BVI company or something like that and use that to trade, but I would guess that they would still report you under CRS as the UBO. So not sure how much of a difference that would really make.

I am thinking of obtaining a freelancer visa from one of the emirates in UAE and trade in my personal name. Open a bank account in another EU country while residing in UAE.

If at all UAE authorities find any issue about misuse of license/[or not taking appropriate license for trading derivatives in personal account], I might be subject to penalties but they would not be able be able to freeze my funds in foreign banks, right? As another poster mentioned in another thread, the best option would then be to buy a one way flight ticket out of UAE and get out.

Can you also provide another suitable easier residency option in a safe EU country with low taxes [either corporate or personal] in any EU country if I rule out UAE? [Ex. Malta, Estonia, Cyprus, Portugal]
Some Asian countries are attractive for expats but the time zone to trade US markets is not convenient.

Will my trading profits be considered foreign-sourced income? Asking this because I read that there are some countries like Malaysia, Singapore, Hong Kong, Thailand, Portugal that don't tax foreign-sourced income.

 

[Don]

I honestly wouldn't worry too much about this at this point.
I would try reaching out to UAE-based traders. I'm sure there are groups on Meetup, Facebook etc.
See what they do.

Of course you can also set up a BVI company or something like that and use that to trade, but I would guess that they would still report you under CRS as the UBO. So not sure how much of a difference that would really make.

Theoretically you can also structure the entity in such way to avoid reporting.

I am thinking of obtaining a freelancer visa from one of the emirates in UAE and trade in my personal name. Open a bank account in another EU country while residing in UAE.

If at all UAE authorities find any issue about misuse of license/[or not taking appropriate license for trading derivatives in personal account], I might be subject to penalties but they would not be able be able to freeze my funds in foreign banks, right? As another poster mentioned in another thread, the best option would then be to buy a one way flight ticket out of UAE and get out.

Can you also provide another suitable easier residency option in a safe EU country with low taxes [either corporate or personal] in any EU country if I rule out UAE? [Ex. Malta, Estonia, Cyprus, Portugal]
Some Asian countries are attractive for expats but the time zone to trade US markets is not convenient.

EU residency might be unreasonably costly, but if you obtain a long term schengen D visa you can easily open a bank account.
For example a digital nomad visa, if you meet the requirements.
D visa is possible to apply also on the general basis if you build some substance and have sufficient savings/income.

You might also want to look into UAE golden visa.

 

[JustAnotherNomad]

I am thinking of obtaining a freelancer visa from one of the emirates in UAE and trade in my personal name. Open a bank account in another EU country while residing in UAE.

Why EU? I would just go with IBKR, probably.

If at all UAE authorities find any issue about misuse of license/[or not taking appropriate license for trading derivatives in personal account], I might be subject to penalties but they would not be able be able to freeze my funds in foreign banks, right? As another poster mentioned in another thread, the best option would then be to buy a one way flight ticket out of UAE and get out.

How would they even find out? But note that you would have to file things for the freelance visa as well.
I know some people were asked to file a UBO report including an organizational chart. For a freelancer! You will be dealing with people with very low education, mostly from South Asia and the Philippines.
You would have to check if you have to file corporate tax returns for the freelancer visa, and you would also have to check if you have to register for VAT, or if you can opt out somehow.

I really would recommend you to reach out to other traders and just see what they do, how they are set up and why.

Can you also provide another suitable easier residency option in a safe EU country with low taxes [either corporate or personal] in any EU country if I rule out UAE? [Ex. Malta, Estonia, Cyprus, Portugal]
Some Asian countries are attractive for expats but the time zone to trade US markets is not convenient.

I would rule out Estonia, but I know that Cyprus especially is very popular. Probably Malta would work as well, and maybe also Portugal with the right structure.
I have heard that you can even combine Cyprus with residency in Austria, but I don't remember the details.
I also don't know how easy it would be for you to obtain residency there without an EU passport.

Will my trading profits be considered foreign-sourced income? Asking this because I read that there are some countries like Malaysia, Singapore, Hong Kong, Thailand, Portugal that don't tax foreign-sourced income.

I believe some of them don't have capital gains tax? But maybe it's different with active trading.
In theory, it shouldn't be foreign income if you run things from that country, but in practice, especially less developed countries (Malaysia, Thailand for example) don't enforce this and will often treat all income as foreign if it comes from a company that is registered abroad.

 

[RAGAV]

Of course you can also set up a BVI company or something like that and use that to trade, but I would guess that they would still report you under CRS as the UBO. So not sure how much of a difference that would really make.

I assume reporting me under CRS is technically not a concern as I would be paying 9% corporate tax in UAE. Will license/regulatory risk increase if I trade in offshore entity due to CRS?

 

[RAGAV]

Why EU? I would just go with IBKR, probably.

I wanted to open a bank account in a foreign country (other than UAE) to transfer funds/receive funds to/from IBKR. I don't want to use my Indian bank account directly to fund IBKR or receive funds from IBKR in it directly when I am no longer a tax resident in India. That is the reason, in one of the earlier posts, I asked about opening an account in another country without being a resident there. [Did not want to use UAE banking]

I explored Portugal D7 visa requirements. The monthly income requirements are low, I thought of using my savings (which can last 3 years according to cost of living estimates) as proof instead of frequent monthly income. D7 visa also allows me to work or start a business without any restrictions.

I know a CA in UAE who should be able to help me out with the VAT/accounting/audits/freelancer visa etc. I reached out to couple of Indians there who are trading on their personal accounts from a long time. However, I guess in the past, it did not matter as there was no corporate/income tax. Not sure if license requirements may change in the future after introduction of corporate tax.