What to choose: a legal entity or an individual for trading on the stock exchange?
If you decide to trade on Forex or another market, you should keep in mind that, in addition to trading, there are many other organizational issues.
One of these issues is the choice of the person on whose behalf a trading account will be opened with a brokerage company.
Today, most brokers allow both individuals and companies (legal entities) to register.
This opportunity allows you to optimize your taxation as much as possible, meaning you can operate completely legally while reducing your tax bill.
To begin operating through a legal entity, you will need to establish a company in a tax-free or low-tax jurisdiction. These are typically offshore zones or countries such as the United Arab Emirates, Cyprus, Macedonia, Barbados, etc
Then open an account from which the deposit will be replenished and to which the received profit will be withdrawn.
The benefits of stock trading through a company
First of all, this is taxation. Depending on the country, you will pay from 0 to 10% tax on all profits.
It is not necessary to advertise your identity; the broker will not know on whose behalf the trading is being conducted, and therefore there will be no data leakage.
An account abroad: many banks are now reluctant to open accounts for ordinary citizens, although there are many companies offering a company with an already opened account.
Less attention is paid to large sums; when transferring large sums, questions often arise if the transfer is made in favor of an individual.
In some cases, it is possible to obtain a residence permit in the company's country of residence.
The benefits of working through an individual
It takes less time to prepare for opening an account with a broker; you simply need to register using your passport information.
There are no additional costs involved, while company registration and associated expenses rarely cost less than $1,000.
No additional expenses – payment for accountant’s services, annual expenses for company maintenance (from $800 per year), taxes when withdrawing funds from the company to a personal account.
Ultimately, the choice of option depends entirely on the amount you plan to trade on the exchange. If your deposit amount does not exceed $10,000, there's no point in even considering a legal entity.
In the case where the deposit amount exceeds 100,000, it is better to open a company and bear fixed costs than to pay high taxes as an individual.
Brokers for opening an account - https://time-forex.com/spisok-brokerov
