Does anything significantly change in the client-broker relationship if you move from trading as an individual to trading as a private/limited company? Technically not a fund (no clients), but simply a business started for managing your own money and/or family money. The taxation of an individual trader is rather high where I live (in Europe). Many individual traders or investors instead start a company and manage their money through it. But does anything significantly change in the relationship with the broker when trading in the US markets (e.g. via IB)? For example, would you need a Series 7 license or other similar requirements? I'd like to be aware of possible drawbacks.
Yes , I think your automatically a professional if registered as a business . Many brokers won't allow because of retroactive backdating of bills based on classification . Check finra
Taxes with a company are even worse in europe. You pay your taxes (incone from dividends and wage) and the company pays too. It is about risk. You can't lose more then whats the firms money. If you were long WTI and it went negative - your firms account maybe zero but your very own would not.
Europe is a big place... it depends on the country. This is an important point, although details can vary considerably from jurisdiction to jurisdiction. Best to discuss it with a tax lawyer and/or accountant, although in fairness to @movingslow, he/she was only asking about the client-broker relationship. Curious which country, if you don't mind sharing?
Just curious if you're aware of double entity formation? Many corporations here and in Europe (especially in Switzerland) form first an LLC as a holding company. Then with your holding company you form another LLC for operations. For operation expenses all finances are loaned to your operating LLC, which enables operating LLC the use and possession of assets, but all assets are owned by Holding LLC. Literally every Realtor and big league Commodities firm uses this structure.. especially in Europe where they have satellite offices in major cities. Any mom & pop (husband and wife or family and friends) can incorporate the exact same business structure for taxes and asset protection. movingslow send me a PM..I think I can help you.
Maybe a stupid question but I never understand how you practically make such transition as you have to put (income) taxed money in it but you have to pay tax again if you get it out? (of course this doesn't apply to a special case where you "fill" the company with salary from a consultancy job (if this is even possible))