Job Discussion Forums

[Hadit]

In a thread that was locked on the Saudi Arabia forum VS stated she didn't think that a self-employed person qualified for the FEIE, but I believe this is incorrect. They do qualify, but still have to pay social security and medicare on those earnings. Here is an IRS comment:

http://www.irs.gov/Businesses/Self-Employment-Tax-for-Businesses-Abroad

Many of the Middle East countries have no income tax. I have started a primarily Forex trading LLC partnership with a few people so that what was capital gains now becomes earned income, and able to be excluded with the FEIE. So I was researching countries that don't have income taxes because 25% of 100k is 25k saved with the FEIE. I don't know if there would be any housing write-offs doing this, I haven't consulted a professional yet.

It may also be possible to skip across countries before you are classified as a resident (usually 180 days), while taking the FEIE deduction to save that way too, rather than having to reside in a country that does not tax personal or self-employed income, if you do not need to work, or your internet business allows it. Look to the tax treaties info to be sure as to the # of days.

The best is of course being able to work to make money in the countries, which are:

Andorra
Anguilla
Bahamas
Bahrain
Bermuda
British Virgin Islands
Brunei
Cayman Islands
Cook Islands
Djibouti
Gibraltar
Isle of Man
Kuwait
Maldives
Monaco
Oman
Nauru
Qatar
Turks and Caicos
UAE
Vanuatu

Saudi Arabia I believe taxes self-employment income at 20%. If you have a lot of income being generated you could live in the above countries without working. Most of the above have a high cost of living, as decided here:

http://www.xpatulator.com/cost-of-living-article/Cost-of-Living-July-2012_350.cfm

Here is the tax info on a lot of countries:

http://www.taxrates.cc/html/saudi-arabia-tax-rates.html

So from the above where one can work without an MA, I think getting a CELTA and a few years experience and going to Oman may be a good idea.

There are a few other options though. I took a look at the tax rates of some of the poorest countries, and two stand out: Bulgaria and Albania each have only a 10% tax rate. Each are nice countries with coastlines, and one can teach English in both. Runners up include Seychelles at 15% and Romania at 16%.

For Albania, "self-employed individuals that realize an annual turnover up to Leke 2,000,000 (approximately EUR 14,800)" it is stated do not have to pay annual taxes, so it might be a 0% country. There is a teaching program called LSAI that gives one $200/mo. + housing to teach there, so if one already has a good self-employment income, it might work.

http://www.lsiaal.com/index.php?f=19

As to any trading advice, I would look at Fmonera's backtests at donnaforex.com for Forex robots to begin to see how to notice how which ones may be long term profitable, rather than trying to trade yourself.

Update: Well, I just had this research shot down from these rules:

http://www.irs.gov/publications/p54/ch04.html

It appears that if "capital is a factor" (money to make money) in your profits, you can only claim up to 30% of the profit as earned income for the FEIE. You still may be able to set up an S-corp where you pay yourself a certain wage as manager, but I believe you'd have to set it up in the US. There is the PFIC rule that would classify investments as passive (not active) income.

[veiledsentiments]