Advice on making the move from New York to the Philippines

[AusExpat]

17 hours ago, REC said:

Actually doing my own research the best thing would be a SRRV. There's a required time deposit savings account of 50k USD, which I can do if they allow you to use your traditional 401k for. 

I think I might end up making money if I can live there modestly in the beginning. Cost of living and taxes in New York are insane. 

I do plan on getting married there. I  prefer Filipinas to American women by far. I did want to start a family there too but that's way down the line. I'm aware of the scams too, I've avoided them there when I visited in the past. Just need to call the shots yourself and don't let other people make decisions for you.

Thank you all for the input. 

From my meetings wth the PRA the SSRV is 50K that you need to deposit as cash then after about three months you can withdraw that to use to invest. $20K is a security deposit only, if you're an ex-service memeber with "honourable discharge" you can get the military retirement one for $2,500. It's not like Thailand where they want to see cash in the bank, it has to be cash in a designated Filipino account.

Other option is a quota visa if you have some special skill that you can prove would be useful to the Philippines, or stay as a tourist like many do until you work out what you really want to do. About 18,000P to apply.

The current layout of the PRA website has almost no useful information, I attached an older image from their previous website layout for reference.

[REC]

I know I'll have to pay taxes because I don't plan on renouncing my citizenship. I was saying the income I generate is capital gains and nothing is withheld. So the $500 a week I generate doesn't end up being $500 come April.

Doing my research I will probably open a Citibank account.

I also found out that there is a yearly there renewal fee for the SRRV. It isn't as much as the tourist extensions but it's still pretty heavy. It also supposedly includes health insurance and educational benefits.

[scott h]

52 minutes ago, REC said:

Doing my research I will probably open a Citibank account.

Here is my experience with Citibank Philippines 

In 2012 when we moved here and started building out house so we needed to move large amounts of money from the states.

1. because I was not a Filipino citizen I kould not open an account. We had to put it in my wifes name.

2. fund transfers took 2-5 business days to complete.

3. Fil Atm card would not work with US account and visa versa. 

Even though they are named Citibank they are basically different companies.. Now before I get jumped on by my fellow members this was a while ago so things might have changed (but I doubt it)

Its great that you are doing a lot of preliminary research, but my best advise is to come and visit here for a month or two (you kan day trade from hotel rooms lolol) and see if this kountry suits your life style. 

 

[Tommy T.]

1 hour ago, REC said:

I also found out that there is a yearly there renewal fee for the SRRV. It isn't as much as the tourist extensions but it's still pretty heavy. It also supposedly includes health insurance and educational benefits.

The brochure I received when applying for my SRRV last year states:

1. Annual fee is US$360. When I compared that to the Tourist Fee, it comes out to almost the same if I remember correctly.

2. Benefit - Student Visa/Study Permit.

3. Benefit -Entitlement to PhilHealth benefits and privileges. (I think that means you still have to pay).

Hope that clarifies things a bit for you?

Edited April 10, 2020 by Tommy T.

[OnMyWay]

2 hours ago, Gator said:

Not all brokers report to the IRS. When I traded Forex, one of the US based brokers I used was OOANDA; they do not report to the IRS, but I did declare my gains on my taxes. If audited (which I was two years later, but for other reasons) the IRS would catch you when they review your bank records and see the deposits made from them. Maybe there are ways around that, but that’s for people far smarter then me and besides, I felt no reason to cheat and exclude it. 

That may be true, especially for FOREX where much of the activity is cross border, but the bottom line is that you have to pay taxes on profits.  I'm fairly certain all major stock brokers in the U.S. report activity to the IRS and they collect you SS# to do so.

2 hours ago, Gator said:

The Exclusion applies for income earned while working and residing outside of the USA, there is no stipulation that you pay or paid taxes to another government. My pay was sent by a British firm thru German and Swiss banks to my accounts in Germany and the USA. I didn’t pay any taxes to any government, except for the last few years when my income exceeded to excluded amount. I then only paid taxes on the amount over the exclusion.

https://www.irs.gov/publications/p54#en_US_2019_publink100047397

Perhaps you’re thinking of the Foreign earned tax credit, which is to offset or completely eliminate the taxes you paid to a foreign gov from your US taxes. 

It is probably different when you are working as a contractor as opposed to an employee on the payroll with payroll taxes deducted.  So it will depend on your contract.

However, back to the trading issue, capital gains are not Earned Income:

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-what-is-foreign-earned-income

Here is a good article about trading when you live overseas:

https://www.forbes.com/sites/greatspeculations/2016/10/11/if-you-trade-around-the-world-you-need-to-know-irs-rules/#3e7467a98f06

2 hours ago, Gator said:

Back to OP - he might be thinking he has no tax liability because his broker doesn’t report to the IRS. That’s his business, but I would suggest he consult a tax professional before departing the USA as I can only speak of my own experiences from a few years ago and am certainly no expert on taxes; and I don’t think you are either. 

Yes, forget about all this other stuff, the bottom line when I read the OPs opening post is that he is a tax cheat.  Everyone has to pay taxes.  It pisses me off when I hear about people making money under the table and not paying taxes.  People who get tips, like hairdressers and waiters, under the table construction, etc..  I knew someone who was making over 100k a year in the 80's as a hairdresser and she probably reported 40k.  A waiter at a good resto can also make good money but I think the IRS cracked down on their underreporting.

[BrettGC]

1 hour ago, scott h said:

Here is my experience with Citibank Philippines 

In 2012 when we moved here and started building out house so we needed to move large amounts of money from the states.

1. because I was not a Filipino citizen I kould not open an account. We had to put it in my wifes name.

2. fund transfers took 2-5 business days to complete.

3. Fil Atm card would not work with US account and visa versa. 

Even though they are named Citibank they are basically different companies.. Now before I get jumped on by my fellow members this was a while ago so things might have changed (but I doubt it)

Its great that you are doing a lot of preliminary research, but my best advise is to come and visit here for a month or two (you kan day trade from hotel rooms lolol) and see if this kountry suits your life style. 

 

We opened a Citibank account last year mate, transfers between our AUD and PHP accounts only take minutes,  our cards work where ever;  Times have indeed changed.  Even using the money transfer services (Western Union, World Remit etc) from/to our respective local Aussie/PI banks only takes an hour max - down from 2-3 days only 4-5 years ago.  We set it up the Citibank accounts to avoid the exorbitant bank transfer fees eg:  If I was to transfer money from my Bank of Queensland account to an overseas account, BOQ charged a percentage of the transfer amount.  Transferring from our AUD to PHP account with Citibank costs nothing. 

ING is another good option that I researched.  

Edited April 10, 2020 by BrettGC
Spelling - Stupid phone posting....

[scott h]

6 minutes ago, BrettGC said:

Tines have indeed changed. 

that's great to hear,,,it was a hassle for us lol

[Freebie]

16 hours ago, Gator said:

There is a “Foreign Earned Income Tax Exclusion” that covers global income for expats.  I think it’s now just over 105k USD per calendar year. Essentially any earned income under that amount is not subject to US income taxes and you still have to file a return. Same applies to state taxes, but that gets complicated and to be safe I would consider moving my tax home a state tax free state like Florida or Nevada. 
 

The OP would be well under the threshold, but there are other restrictions such as the time allowed to be in the USA (for visits). The OP would do well to investigate the IRS’s rules or he could be in for an unwelcome surprise when, or if, he returns to the USA. 

There may well be such a clause however my broking bank DBS auto deducts the US tax derived on dividends of US stocks and keeps telling me theres no way to get the tax returned as its auto applied on US stocks. Ive asked several times and yes I have completed the BEN-8form which I think is the correct form.

[Gentleman.Jack.Darby]

On 4/8/2020 at 11:16 PM, REC said:

After the corona virus calms down, I am looking to live in the Philippines temporarily. I have just been doing day trades and have easily been pulling in 500 USD in untaxed income a week. I would like to live there a year to test out the conditions, life style,  and reduced income before settling. I have already visited Manila on multiple occasions and enjoyed it as a tourist. The heat does get to me so I was looking at staying in Tagaytay or Baguio. However, I might end up staying in Manila because the US embassy is there and the only US banks that have branches there are all in Manila.  

- Does anybody here currently live off the capital gains from stock trades while living in the Philippines? or is that just a pipe dream of mine?

- Has anybody went to the Philippines tourist visa and just paid for extensions to live there? It seems to get pricey doing that,  any I don't know if its a guaranteed way to live there. Is the best alternative to get married there and apply for citizenship?

Any help would be greatly appreciated.

No U.S. bank has "branches" in the Philippines as we Americans experience branches in the U.S., such as going to a JP Morgan Chase branch in New York if one's home account is in Arizona

While Citibank is in Manila and Cebu, that is Citibank Philippines, not a branch of U.S. Citibank, so one would need to open an account there and the minimum to open an account is PHP 1 million, about USD 20K. And one would likely find it difficult to open an account there unless one has a visa type, such as an SRRV, that allows at least a one year stay or is more-or-less "permanent"

On the good side regarding banks, if one did set up a Citibank Philippines account, it wouldn't be necessary to stay in Manila to use it. One could always transfer money from one's Citibank U.S. account to one's Citibank Philippines using Global Transfers and then transfer the funds to another more convenient Philippines bank using Philippines BancNet

Living off capital gains from day trading in-and-of-itself isn't a pipe dream; after all, it's spendable cash just as is cash from a pension

I'm not sure how your day trading gains would be tax free since U.S. trading platforms report activity to the IRS, so that wouldn't change simply by virtue of being in the Philippines. I suppose one could try to set up a Philippines trading account, but that would likely be difficult on a tourist visa and that would subject one to Philippines taxes and could be construed as "working", which is definite "no-no" on any type of tourist visa or without a work permit

And I know folks throw out the U.S. tax code "earned income exclusion", but that exclusion applies to income earned while a legal resident of another country, subject to that country's tax laws and paying taxes, for income earned in (from) that country; it doesn't grant an exclusion for U.S. income arising from a source in the U.S., such as dividends, interest, capital gains, etc. while one is a tourist (non-resident) outside the U.S.

I would suggest thinking long and hard about trying to live in the PI on an income stream, such as capital gains, that isn't stable and reasonably guaranteed

I'd also think long and hard about one's tax situation and make sure the equivalent of USD 2K, before taxes, is enough to support one's intended lifestyle

[AusExpat]

2 hours ago, Gentleman.Jack.Darby said:

On the good side regarding banks, if one did set up a Citibank Philippines account, it wouldn't be necessary to stay in Manila to use it. One could always transfer money from one's Citibank U.S. account to one's Citibank Philippines using Global Transfers and then transfer the funds to another more convenient Philippines bank using Philippines BancNet

I have a US Citibank account and transferring to a Philippines Citibank account is apparently the same as transferring to BPI, BDO or any other local bank (I was told this at a CitiPH office as the companies share the same name and probably backend but are completely seperate legal entities, I also called the US and got the same response about 5 years ago). The good news is that since the Philippines updated their banking system a couple of years ago (hence all the additional paperwork now) money transfers from the US are done quickly instead of days.

So much for being the "World's Bank" and the reason I originally signed up with them in the US.

Edited April 13, 2020 by AusExpat