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Best alternative for UK ltd, no VAT, lower tax

J

jeffbean

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Feb 18, 2020
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#1
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We currently operate an online digital service through a UK Ltd company.

I want to setup a new company not in the UK to reduce the stress with running this, somewhere with no VAT, below 10% taxes, and minimal accounting but also all of our income comes from Stripe so we need to be accepted by Stripe.

  1. Clients are international
  2. Directors are located in different countries
  3. All income comes via Stripe
  4. Need to use reputable business bank or Wise/ Revolut, well known EMI

Any recommendations ? What first came to mind is a Freezone company in UAE or a New Mexico LLC
 
#2
US has no VAT and Stripe is not an issue.
Estonia is OK (no corp tax), but you'll have to deal with VAT (either reverse it if the clients are in the EU or charge 0% tax if they are outside of EU). Stripe - again, not an issue.
UAE is tricky when it comes to banking, VAT and Stripe - there is too much uncertainty now with the corp tax, banking is a nightmare even if you have a local director.
 
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#3
Estonia works great if you have EU customers too, VAT accounting is easy to delegate, and reinvested profits are remain tax-free if you don't distribute dividends.
US LLC is optimal if you don't have customers in the US and live in a low-tax jurisdiction.
I'd suggest moving your a*s and then the company.
The company may be in a Stripe-accepted while your tax residency can be in almost any country worldwide, so you have options.
 
#9
New laws and rules from our best friends in the OECD directed say that payment processors have to start collecting VAT on international transactions. I don't know when this comes to happen but 2024 is the year!
 
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#10
bubbledouble said:
New laws and rules from our best friends in the OECD directed say that payment processors have to start collecting VAT on international transactions. I don't know when this comes to happen but 2024 is the year!
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Sounds good to me. I mainly use Delaware and Hong Kong credit cards to pay. Will be renting them out to my Finnish friends :)
 
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#12
JonnyStekkino said:
Better a Wyoming LLC or an Hong Kong LTD? Which one is cheaper in terms of fixed costs and taxes?
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My comment was that if payment processors have to charge clients VAT for international transactions, I will just use a Delaware or Hong Kong credit card to buy stuff beging shipped to Finland as I will then save 25.5% on VAT. (How can they know where it is being shipped?)

Of course the Wyoming LLC is cheaper, much cheaper, as you do not have to pay 2000 USD per year for the audit as in Hong Kong.
 
#15
aniglo22 said:
No , as long you don't have any dependent agents(sales agents etc.. ) , or physical substance (warehouse etc..).
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It is quite complex and answers from US lawyers are conflicting. What can be said for sure is that you are not paying US taxes if either:
  • you do not sell physical goods
  • there is a DTA and you conform to it (i.e. only have a warehouse for distribution)
If you sell physical goods, there is the view that you are taxable in the US if you sell to US customers. But there are other views that you can even store it in the US without being taxable unless the warehouse only ships your goods.
 
#16
daniels27 said:
It is quite complex and answers from US lawyers are conflicting. What can be said for sure is that you are not paying US taxes if either:
  • you do not sell physical goods
  • there is a DTA and you conform to it (i.e. only have a warehouse for distribution)
If you sell physical goods, there is the view that you are taxable in the US if you sell to US customers. But there are other views that you can even store it in the US without being taxable unless the warehouse only ships your goods.
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I think if you are outsourcing the fulfillment you should be fine ?
 
#17
aniglo22 said:
I think if you are outsourcing the fulfillment you should be fine ?
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As I mentioned, there are conflicting views. You can google it and you will find that it is like half-half. You can search for "fba engaged in trade or business" on Goolge etc. My personal opinion is that there is no single know case where IRS asked for taxes, but at least 50% of the lawyers will tell you that you have to pay taxes or sleep in fear every single night.
 
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#20
daniels27 said:
As I mentioned, there are conflicting views. You can google it and you will find that it is like half-half. You can search for "fba engaged in trade or business" on Goolge etc. My personal opinion is that there is no single know case where IRS asked for taxes, but at least 50% of the lawyers will tell you that you have to pay taxes or sleep in fear every single night.
Click to expand...
more or less what we should believe is there a risk of the IRS to ask for taxes or is it something we can forget about?
 
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