Broker for a residenceless (homeless) Swiss

Investing / Brokers
#1

Maybe somebody here can give me some recommendations.
I’m traveling around the world since 2008. The Swiss municipality I was registered at noticed that I have been outside of Switzerland for more than 6 months so they’ve deregistered me - as it seems you’re not allowed to be outside for longer than 6 months… So since 2010 I’m officially residenceless. I’m not registered as living in any country nor do I have to pay taxes anywhere. I didn’t earn enough to need to pay them anyway (at least in Switzerland) and never stayed anywhere long enough to become taxable.
Anyway, I’ve managed to save some money over the years and I’d like to invest them mainly into some ETFs. Right now I’m looking for Brokers. I’ve managed to open an account at Degiro and Interactive Brokers using the address of my parents in Switzerland. I just wanted to see if I manage to open the accounts or not but didn’t decide yet which one to use.
I’m planing to invest around 50 000 CHF during this year, probably it will be some more next year depending on how some projects work out this year. My main question now would be, which one would you recommend me? Degiro or Interactive Brokers or a completely different one?
There are several questions I’ve tried to find answers for, but not too successful so far.

  • What about withholding taxes. I don’t fill out any tax declarations. So I won’t be able to ask any withhold taxes back (As far as I know)
  • Could I get into any trouble since I don’t have a residency? Would I need to proof my residency in some way at one point in time? For the registration my identity documents and AHV number were enough. I do have a bank account in Switzerland registered on my name and on my parent’s address (Usually I use that one if anybody asks me for further proof of residency but I’m not sure if that would be enough)
  • Is there something else I’d need to consider because of my situation?
#2

Don’t they ask you which country you’re a tax resident of? Doesn’t sound great to lie during KYC checks…

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#3

Don’t think so, if you’re legitimately non-resident.

It’s just that they aren’t going to keep, let alone open up a securities account.

The concept of residencelessness is not appreciated by compliance departments.
For them, it essentially doesn’t exist.

Yes. Or declare.

Requires W8-BEN, if I’m not mistaken.

#4

Cool! But more than six months away, how would they know? I‘ve been away for more than six months - nothing happened

#5

Out of curiosity, how do you deal with health insurance? Are you FIRE or just freelancing in some way?

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#6

Hi @remimo, I hope you’ll get help from people who are knowledgeable about the topic.
In the meantime it would be interesting if you can share your story, either in the already existing post or you could open a new one in the “Share your story” category :blush:

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#7

That’s what I’m a bit worried about. I mean each time I enter a country I “lie” about where I’m living. Since you just aren’t really able to go anywhere or do anything as residenceless otherwise. And usually nobody cares (I’ve also opened some banc accounts like that, nobody ever cared).

The thing about being residenceless is that you can’t get an official form to prove it. I’ve got some paper proving that I’m not living at the former mentioned municipality anymore (Abmeldebestätigung), and that my new place of residency is unknown and the reason therefore is that I’m on a world travel. But I can not prove that meanwhile I haven’t become a tax residence in any of the other 200 existing countries.
I’ve filled out the W8-BEN form at Interactive Brokers without any problems. According to them I would be ready to start trading, they send me an e-mail each week to make my first money transfer to them. My main worry is, that at one point of time somebody would ask more questions and if that could get me into any troubles (difficult to get my money back, or some legal stuff), especially at the end of the year, when the whole tax stuff starts…
In general Degiro asked a lot less questions, so I’m more inclined to use them.
But so I was wondering if Degiro or Interactive Brokers at some point of time start asking more questions? More stuff that needs to be proven?
I’m not planning to trade with milions (Otherwise I would just pay somebody to solve all problems for me) so I guess that won’t raise any red flags.
I guess nobody really knows about the legal part? (Some friends of mine studied law, but it’s not their area of expertise and they couldn’t really help me).

My parents moved to an other village, so they’ve also tried to “move” me. But as it seems you can only do that in person. So the municipality just deregistered me when they’ve heard I’ve been outside for several years. Fortunately I could keep my health insurance (nobody told them I’m not living in Switzerland anymore) until I was able to get an international one. Which at the end is a lot cheaper with almost no deductible. Actually at the end it’s been quite a pain in the ass to get rid of the Swiss health insurance. In general life has got a lot easier and cheaper since I’m not officially living there anymore. No more official forms to fill out which my mother every year forgets to inform me about. No more swiss health insurance or fireman taxes (90CHF) which my mother forgets to inform me about and I have to pay overdue fines therefore.

@MrCheese
I’m working as a freelance programmer

@weirded
Usually I don’t like to bore people with my story, but since at least you seem to be interested I can post there (but later today or tomorrow) :wink:

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#8

Ok, the above post got a lot longer than planned, and didn’t really showed the exact questions I’ve got.
I’m very interested about

  • Withhold taxes. As said, I don’t think I’d be able to ask them back. As it seems Interactive Brokers does withhold them. At least for US American and Swiss ETFs (is that correct?). I couldn’t really find information about it for Degiro. So which one would be better there? What do I need to consider when buying ETFs so no tax would be withhold? At the end. Does it make a big difference (I guess it does)?

  • For people which already use Degiro or IBKR, do they ever ask for anything else than your Tax Identification Number (AHV) and your passport (I’ve also got an Identity Card if necessary)? Any other papers or prove of residence they ever want to know about?

  • I’ve wrote both brokers to ask them. But so far I’ve didn’t get a reply…

  • Any other hints? Or just a reason to not do it at all?

As I said, so far I’m tenting to Degiro (less questions asked, less complicated).

#9

That’s probably the best way forward. I personally don’t believe that it’s ok to not pay taxes anywhere in the world but that’s just my jealousness.

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#10

Though you knowingly lied when you filed it, it explicitly asks if you’re a tax resident of country X, at a minimum don’t claim tax benefits you’re not entitled to (I’d guess lying on W8-BEN is another level from lying to KYC checks). At least make sure not to do anything that would make the US unhappy (if they decide they want to get you, the sentence for perjury is up to 5 years of prison).

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#11

Why would you pay taxes in a country you don‘t live in? You don‘t benefit from what it‘s invested in.

If you get a new passport that should cover it‘s real cost, if it‘s subsidized it‘s not one the persons fault who gets a new one.

Jealousness sums it up well. I‘d like to join the club

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#12

…truthfully certifying that “the beneficial owner is a resident of no country/nowhere”?

Or claiming you’re a resident of Switzerland, even though the authorities themselves aren’t considering you resident - so basically certifying something that’s not (f)actually true?

It’s possible - though in my experience (and I’ve had quite a few foreign accounts) not very likely unless you change your address or contact details. Including phone number.

The issue is less about being residenceless - but more about practical issues.

I’ve read about a few cases where the Swiss health insurance was happy to cash in the premiums - but then bailed on paying for treatment once that got expensive. That was the moment they “discovered” the customer hadn’t been resident for a while.

…because you are working and earning money while …yes, actually “living” there.
Even if it’s location-independent freelance programming work.
And even if you’re living there for only a small part of the year.

#13

Hi there,

I have looked into the question of no residency anywhere out of curiosity, and it is a rather difficult topic.

Let’s say you are a digital nomad, who can work from anywhere. Technically, it means that your residency is in the place you are staying right now. It is also your actual tax residency if you stay less than 6 months, and you will have to abide to local ruling and taxes of the place where you stay, even if it is just for 1 month (or even less). It will be hard to prove for the country you come into, but it is “the correct way”

Means, technically, everytime you change country, you change tax residency, health insurance, pension funds etc. (BTW as far as I know all “worldwide insurances for digital nomads” have a little passus that you need to have a home country, where they can transport you back to and then the home country takes over cost).

Means also, that everytime you change country, you should do it as an immigrant. Suddenly makes it much more difficult. Again, not easy to prove, but that would be the correct way.

Unfortunately world rulings have not kept up with real life and distant working yet. And only a minority can actually work like that until now, so it won’t change quickly.

Recommendation from there : make yourself resident somewhere, where you stay most of your time in a year and abide to local tax rules. Can be less than 6 months, but most of your time should be spent there.

EDIT: BTW you can try to revert the loss of residency in Switzerland if this is still your center of life. (Stay four months per y back home, something like that)

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#14

According to one of my friends (lawyer), you need to pay taxes where your center of live is (German: Lebensmittelpunkt). Since I’m living as a vagabond, hopping from place to place, country to country and therefore don’t have any center of live, according to him I don’t need to pay taxes (that was his legal opinion). Until I’ve got deregistered I didn’t pay any taxes anyway. I didn’t earn enough. I’m only in Switzerland for christmas every 2-3 years or so. So as it seems legally I even wouldn’t be able to register again to pay taxes.
About the moral side of not paying taxes:
Usually I need around 200-500CHF (500 only when I do diving and stuff) per month for living including health insurance, depending on where I am and what I’m doing… So over the years even with a low income I was able to save some money, but I wouldn’t have paid a lot of taxes if any (Actually in Switzerland I would have been entitled for premium reduction of the health insurance…). Last year was the first time I’ve earned more => Pandemic, I wasn’t really able to travel and were (am) stuck, so I’ve decided to spend more time working. Also, soonish I’ll be 40 and that’s when you start thinking a bit more about your financial future and for how much longer you want/can continue living out of your backpack ;-).
If I owe it to society to stay at a single place, work more, earn more, and therefore pay (more) taxes and spend more money is a completely different question.

@nabalzbhf
Yes that W8-BEN form made me quite a bit unhappy. To be honest, when I filled it out I didn’t really realized what it was, I just wanted to find out if I could open an account or not… I’ve just remembered about it when reading San_Francisco’s post.

@Patirou
I was thinking about registering somewhere. The main problem there is that I don’t really stay anywhere. That a lot of time they want a prove of residence. Or that you need to prove to have (or will have) a job in the corresponding country. I’ve heard about some countries where it is supposed to be easy to register yourself (portugal or lituania), but I’ve never really looked into it…

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#15

Technically, many countries won’t even let you in at immigration without a work visa, if you plan to work there. And if there’s anything they’ve asked me at the border to non-EU countries almost every time, it was what I was planing on doing in the country (tourism / language learning, etc.).

Sure, you’re going to get away with it most of the time by - wrongfully - claiming to be a tourist.

I’m not surprised. I still wouldn’t necessarily rely on it either. Your friend’s likely not an expert in tax law for every single country you’ve been staying in. And location independence is a niche subject for sure.

Have you ever (truthfully) declared at immigration that you’re there for (tourism and) working from there?

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#16

I assume that in case of doubt tie-breaker rules are likely to apply, that might define tax residency, if you’re earning income.

Let’s phrase this differently:

Assume I have been living in San Francisco. Or maybe just “been” there for a while. I’ve recently sold my belongings there and severed my ties to the US. I am now showing up at the Swiss border with my portable laptop, go to the immigration booth and truthfully say: “I will be staying in Switzerland for two months. To see your beautiful country. Oh, and also I am going to work for two months while I’m in the country. I will subsequently be leaving and move on to Singapore”. I may have a work visa or not need one (I could be Swiss or French).

What is your lawyer friend’s answer going to be?

“Since San_Francisco doesn’t live here, he can work in Switzerland and not be taxed?
It’s just a two-month period, and he doesn’t live here?”

It doesn’t need to be that complicated. I could also be in the country transiently in between moving from one EU member state to another.

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#17

Define taxes! In some countries government has no way to collect taxes from private people so for instance only corporate taxes can be being collected (resp. sometimes also deductions on employees/salaries).

Then some countries want to attract wealthy people (investing/spending in the country being also a tax… VAT). The question then in your case is concerning VAT… as an freelance programmer :wink:

A few weeks ago I asked REVOLUT about keeping their services (CC) while leaving Switzerland for a couple of years. Their answer was that they could not allow me to keep the account if I leave Switzerland. So keep in mind that there are also issues about having banking services.

#18

But you are technically not a tourist since you are working, and even in the EU you have to oblige local standards if you work there (and which are different from country to country).

Means every time you have to migrate healthcare system, pension system etc. No one stands at the border and as long nothing happens all fine.

#19

Fun fact, just got an email from Transferwise, stating that they will change their name and become more of a banking service than a transfer service

And that you can get an account from every place, somehow doubt that though.

#20

Definitely not. They most probably wouldn’t have let me in by doing so. If you want to enter for bussines you need to give a lot of reasons and contact’s. For working you need a working visa (permit). So no. I always claim to be there for tourism purpose which is mostly (90%) even true. I mean otherwise even if you go for two weeks to a country and respond some mails, or maybe even make some calls for your company while you are there, you’d need to declare that. Which just nobody does.
When you enter a country over land or the sea border officials don’t ask a lot of questions, and especially don’t want any complicated cases. I’ve tried a few times to ask them some (hypothetical) questions about registration/staying in the country and stuff, but the answer basically always was: make a cross at tourism and don’t continue asking stupid questions ;-).
At some places, countries even live pretty well of those kind of tourists. Look at the carribbean. There are thousands of sailing boats around on which people life all year long. Obviously also only for tourism purposes…

Actually in a lot of countries most of the population doesn’t pay any direct taxes since they’re working in the informal area (that can easily be more than 50% of the population). So the only tax the government gets from them is VAT. And sometimes property taxes. If people pay them. Usually most local governments don’t dare to take your hut away, because you didn’t pay property taxes.

Just don’t tell them that you leave Switzerland. As long as you’ve got an address there where correspondence can arrive they don’t have any real chance to find out. I’ve met a lot of people which worked for a while in Europe - legally (I know even more which did it illegally). And managed to get a bank account there, and just kept the bank account even once they’ve returned to their country. (European bank accounts are great (stuff like transferwise even better), so much easier to use them abroad, making transfers, etc…)

Me too. Right now they don’t even accept transfers from all countries. I don’t know if they accept transfers to all countries. But at least transfers to Colombia they only accept since recently and only small amounts.

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