Interactive brokers? CME group? Advice please.

goldenedge

Active Member
#1
Hi

I talked with their Indian customer support guys of both IB and CME brokers about opening an international margin trading account and its legality.

They say that it's possible to trade with margin. The steps they have given me are:
First, they convert my deposit(INR) in their Indian offices to USD. Then my account can be margin traded as usual in USD. So when I want to withdraw, they convert the USD to INR and and deposit (INR) in my bank account as they have their Indian offices.

When I inquired about paying TAXES, they told me to pay it as general trader tax.

ADVANTAGES: 24 hour trading, access to all markets,insane liquidity,the best margins and regulated account. (they are the biggest international brokers so don't worry about your money being lost :lol:)

DISADVANTAGES: Kinda illegal. But as I open an account with them in their INDIAN offices, I think it's possible to trade without much hassle.

My conclusions are that it might be worth it. I generally prefer to withdraw once in a month so I'm assuming that it wont be huge trouble. My account will be registered as a cash account (but margin will be provided) and I don't think the taxman checks each and every account of the trader.

Do you guys think it would be a good idea? Is anyone doing that?

If nothing works, I will just move to another country.
 
#3
Hi

I talked with their Indian customer support guys of both IB and CME brokers about opening an international margin trading account and its legality.

They say that it's possible to trade with margin. The steps they have given me are:
First, they convert my deposit(INR) in their Indian offices to USD. Then my account can be margin traded as usual in USD. So when I want to withdraw, they convert the USD to INR and and deposit (INR) in my bank account as they have their Indian offices.

When I inquired about paying TAXES, they told me to pay it as general trader tax.

ADVANTAGES: 24 hour trading, access to all markets,insane liquidity,the best margins and regulated account. (they are the biggest international brokers so don't worry about your money being lost :lol:)

DISADVANTAGES: Kinda illegal. But as I open an account with them in their INDIAN offices, I think it's possible to trade without much hassle.

My conclusions are that it might be worth it. I generally prefer to withdraw once in a month so I'm assuming that it wont be huge trouble. My account will be registered as a cash account (but margin will be provided) and I don't think the taxman checks each and every account of the trader.

Do you guys think it would be a good idea? Is anyone doing that?

If nothing works, I will just move to another country.
This violates every AML rule.

Once RBI knows this, they will shut down IB india and along with that your account.

Better to move out of this country.Hehe.:)
 

goldenedge

Active Member
#4
Any estimate about what could be the expense to move to any other country where we can trade european / american market?
Depends on the country. I prefer to get an investor's visa so that there won't be any hassle because you get a direct permission for indefinite stay. To get an investor's visa you must invest in the government related companies for a few years, depending on the country. The amount you have to invest varies from 50,000$ to 1million$.

Best countries to move (that I know of):
1) Dubai (needed investment 30 lakhs) -direct entry. No tax for anything.
2)Philippines (variable investment.) - direct entry. Very low tax. Really awesome country because they speak english better than you.:D
3) Switzerland (best country for rich traders to move in)- fixed 500,000$ tax and the rest of the tax you pay depend on how much you spend.
4)Thailand and singapore (variable investment) -direct entry. Zero tax but low standard of living compared to philippines.
5) Any tax havens - not recommended.


I find only Dubai interesting. It's very straightforward and without tax. More than 20% of the population are also indians. Countries like philippines and thailand has it's own problems. The most safest bet you can get is US or CANADA. Even though you pay around 34% effective tax every year, its worth it. 500,000$ investment in US will get you a direct green card. :clap:.


These are only recommended for traders more than million dollars capital. Or else it's not worth moving to any other country. Keep trading those Nifty options until you get rich.:p

EDIT: I have just checked Philippines and Thailand's government websites. You have to invest 75,000$ for Philippines and approx 6 lakh rupees for Thailand. (awesome right? )
Check this out. http://www.investorvisa.ae/investor-visa/thailand/
 
Last edited:

deba72

Well-Known Member
#5
This violates every AML rule.

Once RBI knows this, they will shut down IB india and along with that your account.

Better to move out of this country.Hehe.:)
As long as that money is not moved out of India, it does not violate any rule. I think, they are keeping the money here as margin and then allowing exposure in the overseas trading from their overseas entities. But I am not sure what will be their accounting procedure.
 
#6
As long as that money is not moved out of India, it does not violate any rule. I think, they are keeping the money here as margin and then allowing exposure in the overseas trading from their overseas entities. But I am not sure what will be their accounting procedure.
Yes, this is the grey area and a loophole which will get fixed soon.

Still very risky and you can easily launder money with the help of the broker.

I asked them the same question as OP did and they told me you should know your country's laws and you will take the entire risk if something goes wrong. That is why i did not open a/c with them.
 

goldenedge

Active Member
#7
Is it possible to go to Dubai on investor visa. Open account. Come back to india and keep on trading online being in india only? I do not understand reason for 'leaving' the country. Can you please share your thoughts on the same?
well, You cannot leave Dubai for more than 6 months to make sure that your visa isn't cancelled.

http://www.fbsemirates.com/3-year-investor-residence-visas/

Better to contact a immigration lawyer to figure out the complete process and rules.
 

goldenedge

Active Member
#8
Yes, this is the grey area and a loophole which will get fixed soon.

Still very risky and you can easily launder money with the help of the broker.

I asked them the same question as OP did and they told me you should know your country's laws and you will take the entire risk if something goes wrong. That is why i did not open a/c with them.
They mentioned that people have been doing this for years and that it won't be a problem.
 

tradedatrend

Well-Known Member
#10
1) Dubai (needed investment 30 lakhs) -direct entry. No tax for anything.
2)Philippines (variable investment.) - direct entry. Very low tax. Really awesome country because they speak english better than you.:D
Does Duabi or Philipines provide trading on international exchanges with profused liquidity. Not like DOW & FTSE etc on NSE. I am very skeptical about both part, in case you have more information, please share.

I prefer to get an investor's visa so that there won't be any hassle because you get a direct permission for indefinite stay. To get an investor's visa you must invest in the government related companies for a few years, depending on the country. The amount you have to invest varies from 50,000$ to 1million$.
Here is glitch, not in every country we get investor visa by buying government securities. I.E. for USA 1 million or 0.5 million (for rural areas) investment has to be made creating some sort of company which can offfer permanent job to 10 qualified us workers.

3) Switzerland (best country for rich traders to move in)- fixed 500,000$ tax and the rest of the tax you pay depend on how much you spend.
Any idea this fixed 0.5 miilion USD tax is applied on income upto what amount?

4)Thailand and singapore (variable investment) -direct entry. Zero tax but low standard of living compared to philippines.
Well, i would be hubmly disgree, Thailand and Singapore both are far ahead of Phlipipines in terms of living standard. Philipines is a communist ruled poor country wtih a big problem of povery etc.
Singapore is far far far ahead in liviing standard, beside it has created a niche in Asia as a financial hub. Moreover in my understanding SGX offers trading for various markets.
Almost same could be said for HongKong too, but i am not informed about their immigration rules / amount to be paid.
Thailand also is a good country in terms of living standard, but not certain about their stock market.

These are only recommended for traders more than million dollars capital. Or else it's not worth moving to any other country. Keep trading those Nifty options until you get rich.:p
hahah, i guess people who have a capital of more than 2-3 croer to trade, they can also try to move to places where maximum expense is within 50 lakh.
 

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