Quote Originally Posted by Snoopy View Post
Is there anything to stop you as a New Zealander, buying US shares in your own name and then transferring these shares to a company that you own or a trust you control in New Zealand, by using an off market transfer form?



What is the issue with having a company in New Zealand or a Trust in New Zealand being registered with the IRD as a separate entity? They are separate entities are they not?

SNOOPY
If you're dealing direct from a US broker, it all depends on the type of account opened. It's even shown on the W8BEN form the various types of entities that the account is formed under. For eg. an "Individual" account holder is direct with the person that operates the account and has a foreign status that requires no IRS #. For an incorporated company or trust account, then that's a different can of beans because they are separate entities which you are correct. However, foreign entities (not persons) are not allowed to operate in the US purely as a foreigner, just like a US company can't simply operate in NZ without some corporate registration. ie we see Pizza Hut and other US icons in NZ but they operate ie. under Restaurant Brands NZ and thus pay taxes to IRD. This is very different to a foreign person that only just has an account and requires no registration with the overseas tax dept. (on a side note, the USA is not part of the OECD "Common Reporting Standard" which require the sharing of account information to the tax dept where the person resides). I suppose the key distinction is an individual account holder may have no intent to profit vs all corporations and (most trusts) operate in a way to make a profit which thus would always attract income tax.

Something to consider is if you do incorporate in the US or setup a trust in the US, beware the US has estate taxes at the time when the company is wound up or the trust is wound up. So this may not be beneficial at all to the NZ resident that sets up such an arrangement in the US and later on the settlers and trustees have passed away. The JWROS does not apply to such accounts either.