US investment vehicle

Well, you’ve opened your buxiban…
You’ve taken your loot to the bank…
You’ve paid ALL your taxes (Hopefully…

How do you turn that profit into another investment…?

Well, I invest in the US stock market, and I have been buying some stocks with good dividends on a personal basis…

However, I keep getting hit with that 30% withholding tax… as a foreign non-resident.

So I am wondering, is there any LEGAL way to avoid paying this?
Can we set up a company in the US for investment purposes only?
Can this receive dividends pre-tax?
Can the dividends be treated as income?
Can the profits thereby be taxed at a more reasonable rate, ie. minus costs, etc?

Anyone got any suggestions? on this issue? or at least on finding someone in Taipei who is really good at handling this kind of question… Needless to say the sums of money I’m talking about are quite small, presently… But who knows?


All i have ever done is to complete, sign and return to the organisations handling the purchases etc a form W-8BEN, this is called a certificate of foreign status of beneficial owner for United States witholding tax.

With that form i have never been deducted the with holding tax.

I am assuming here that you are not a US citizen.

According to my understanding, the withholding tax rate depends on the existence of a tax treaty with the U.S.

Right now, no tax treaty exists with Taiwan. Therefore, I am subject to withholding taxes.

The form you mentioned doesn’t exempt me from this requirement in the absence of a tax treaty!

Hence my desire to find a more suitable arrangement, since I’m planning that Dividends will play a bigger part of my portfolio in the short to medium term.

Best Wishes

You say you’re already investing in dividend paying US stocks. What does your broker say?

I’m thinking it is going to be very hard for you to get out of the dividend tax in your situation (foreigner non resident).

Good luck and let us know what you learn.

After filing your w8-BEN, you are exempt from interest income but you
will always pay the 30% on stock dividends. If you buy bonds, then you will not be taxed on the coupons because it is treated as interest income.

If the dividends are automatically reinvested in the same stock will the 30% still be deducted?

yes, when he sells…unless taiwan and the us come to an agreement…not likely

You might want to find out if this tax rate would apply if you make these as a ‘corporate/company’ purchase.
Buying these as an investment vehicle for your corporate funds.

You could try Australia. It has a very prosperous stock market and the withholding tax is only 10%.