Best Company Set up for Digital Nomad + Ecommerce?

[banafinfodafuggiano]

I earn $150,000-200,000 a year with my online brand,
how and where would you set up a company + bank to minimise tax close to zero?

Consider that I can move almost anywhere since my business is 100% online and
I'm a strong passport holder (Spanish + Canadian).

I want to pay as close to zero: corporate and income tax but at the same
time I have to incorporate in a serious jurisdiction since the payment gateway (Stripe)
takes this matter seriously.

 

[Cloudbanck]

I earn $150,000-200,000 a year with my online brand,
how and where would you set up a company + bank to minimise tax close to zero?

Consider that I can move almost anywhere since my business is 100% online and
I'm a strong passport holder (Spanish + Canadian).

I want to pay as close to zero: corporate and income tax but at the same
time I have to incorporate in a serious jurisdiction since the payment gateway (Stripe)
takes this matter seriously.

How about a US LLC, and residency in Paraguay (since I take it you speak Spanish).

So you get the US as serious jurisdiction with no problems with banking and payment gateway. And no US tax as long as you dont have any office or employees/dependent agents or operations in the US, and dont spend too much time there.

And Paraguay with territorial system will be zero tax, but you always have to be a bit careful about rules and enforcement around permanent establishment. For Paraguay though, I think a one-man-with-a-laptop business is not a problem.

Other countries that could work to live in are the territorial central american ones, or Uruguay, Dominican Republic. Then you got the tax free small Caribbean islands if you are into that. And the UAE - if you enjoy living there - would totally work with that type of income even with the 9% tax above 100k/375 AED (if the tax is applied on US LLCs with turnover below 1M AED, you just take the part above 100k as salary). Thailand could work too, but there I think you have to wait to next year before remitting money earned the current year into the country.

Another idea is to have multiple home bases, and there you can even throw in a high tax country as long as you avoid being a tax resident there.

Monaco would not work, 150k to 200k is not enough, unless you have over a million or so in savings. Cayman Islands is also too expensive with that type of income I think. (And I mean the getting and maintaining residency costs, not the living costs)

 

[Barney2201]

Is there a preferred location for US LLC’s I know Delaware and Wyoming where always discussed but many people seem to be gravitating towards Florida

 

[Jbb1]

Is there a preferred location for US LLC’s I know Delaware and Wyoming where always discussed but many people seem to be gravitating towards Florida

New Mexico is the cheapest and gives the best anonymity

 

[JohnLocke]

You could also incorporate your business in Switzerland or the UK or both and connect each entity to each other.

 

[Barney2201]

If you incorporate in Switzerland do you not need local staff / directors?

 

[banafinfodafuggiano]

How about a US LLC, and residency in Paraguay (since I take it you speak Spanish).

So you get the US as serious jurisdiction with no problems with banking and payment gateway. And no US tax as long as you dont have any office or employees/dependent agents or operations in the US, and dont spend too much time there.

And Paraguay with territorial system will be zero tax, but you always have to be a bit careful about rules and enforcement around permanent establishment. For Paraguay though, I think a one-man-with-a-laptop business is not a problem.

Other countries that could work to live in are the territorial central american ones, or Uruguay, Dominican Republic. Then you got the tax free small Caribbean islands if you are into that. And the UAE - if you enjoy living there - would totally work with that type of income even with the 9% tax above 100k/375 AED (if the tax is applied on US LLCs with turnover below 1M AED, you just take the part above 100k as salary). Thailand could work too, but there I think you have to wait to next year before remitting money earned the current year into the country.

Another idea is to have multiple home bases, and there you can even throw in a high tax country as long as you avoid being a tax resident there.

Monaco would not work, 150k to 200k is not enough, unless you have over a million or so in savings. Cayman Islands is also too expensive with that type of income I think. (And I mean the getting and maintaining residency costs, not the living costs)

US LLC pays zero corporate tax?

what about UK LLP/LTD are they also corporate tax exempt if the director is a non UK resident?



Thailand and Uruguay for personal residency sound interestng.

 

[JustAnotherNomad]

US LLC pays zero corporate tax?

No. You can choose for it to be taxed as a disregarded entity, then you pay tax in the US as if you did business in your personal name.
So if you don't physically work in the US = no US tax.
If there is tax in other countries, that's up to the other countries to decide.

If you don't choose for it to be taxed as a disregarded entity, then it is subject to corporate tax in the US (but why would you do that).

what about UK LLP

Same as a US LLC that is taxed as a disregarded entity, it is taxed on the partner level only. But you need at least two partners (could be you and a UK Ltd. or US LLC).

LTD are they also corporate tax exempt if the director is a non UK resident?

No, a UK Ltd. has to be tax resident somewhere. In theory, you can move the tax residency to a zero-tax country under a tax treaty, but I don't know where that would be. Maybe the UAE if you stay below the thresholds for corporate tax.
If you don't move the tax residency, then a UK Ltd. is always tax resident in the UK and subject to UK corporate tax.

 

[Blackside]

Move to Dubai.

 

[Radko]

Plenty of Options, Panama has a territorial tax system and it's very well connected, safe, nice people, easy to get temporary & permanent residency.
Thailand as mentioned you can remit the proceeds after 12 months tax free, but Thai authorities are not checking, and it's very cheap to live there. But the Elite visa is expensive.

Obviously Dubai, and many others, i.e. Cyprus, etc

 

[JimBeam]

Where do you live currently?
Where are you tax resident right now?
Are you paying taxes on this income?
Would you be comfortable to move to UAE, Cyprus, Switzerland, Bulgaria to achieve lower taxes?

 

[banafinfodafuggiano]

Where do you live currently?
Where are you tax resident right now?
Are you paying taxes on this income?
Would you be comfortable to move to UAE, Cyprus, Switzerland, Bulgaria to achieve lower taxes?

I am a Spanish and Canadian citizen, resident in Canada, paying taxes here.

All those you mentioned do not really have access to Stripe or Shopify payments

No. You can choose for it to be taxed as a disregarded entity, then you pay tax in the US as if you did business in your personal name.
So if you don't physically work in the US = no US tax.
If there is tax in other countries, that's up to the other countries to decide.

If you don't choose for it to be taxed as a disregarded entity, then it is subject to corporate tax in the US (but why would you do that).



Same as a US LLC that is taxed as a disregarded entity, it is taxed on the partner level only. But you need at least two partners (could be you and a UK Ltd. or US LLC).



No, a UK Ltd. has to be tax resident somewhere. In theory, you can move the tax residency to a zero-tax country under a tax treaty, but I don't know where that would be. Maybe the UAE if you stay below the thresholds for corporate tax.
If you don't move the tax residency, then a UK Ltd. is always tax resident in the UK and subject to UK corporate tax.

So, is it harder to get payment gateways and banks up and running if using a UK LLP rather than a UK LTD?


Also, if using a UK LTD, if I pay myself a salary, will i have to pay payroll tax in the UK first and then HMRC will refund it to my personal name since I'm not a UK resident?

 

[covid]

How about a US LLC, and residency in Paraguay (since I take it you speak Spanish).

So you get the US as serious jurisdiction with no problems with banking and payment gateway. And no US tax as long as you dont have any office or employees/dependent agents or operations in the US, and dont spend too much time there.

Correct me if I'm wrong, but I think payment processing will be an issue if he has no actual business taking place in the US, maybe banking as well but I'm not 100% sure.

At least when I was trying to get set up with payment processing (as a Canadian with a US LLC), multiple people told me the company had to have a US owner with a certain % and/or actual business taking place in the US (so you end up paying taxes). This was a high-risk business so maybe that was the only issue.

 

[Cryptohodler]

No, a UK Ltd. has to be tax resident somewhere. In theory, you can move the tax residency to a zero-tax country under a tax treaty, but I don't know where that would be. Maybe the UAE if you stay below the thresholds for corporate tax.
If you don't move the tax residency, then a UK Ltd. is always tax resident in the UK and subject to UK corporate tax.

Hello, what is the official process to follow to move my UK Ltd company 's tax residency to another country ? If say I am actively managing and controlling it from there ? Do I log into HMRC or companies House website and fill some form online ?

 

[JustAnotherNomad]

Yes, there is a form you have to send to HMRC, but I don't know exactly how to do it.

The treaty non-resident UK Ltd. - the best-kept offshore secret?

Some time ago, someone on this forum posted about his "non-resident UK Ltd." This sounded a bit strange - after all, the UK doesn't have non-resident companies in the same way e.g. Hong Kong does. Of course this sparked my interest, so I've investigated a bit more - and I've been considering...

www.offshorecorptalk.com

Read this:

INTM120070 - Company residence: 'Treaty non-resident' companies - HMRC internal manual - GOV.UK

www.gov.uk

You'll probably want to do it together with an accountant anyway. Your UK accountant should know how to do it and what's required. You may need a corporate tax residency certificate from the other country.

 

[Arkanoid2021]

There is something called Stripe Atlas, where Stripe helps you to setup a US LLC. Is it a good option ?
I'm in a similar situation , I'm thinking about moving to Dubai (Strip is available there ) or creating a US LLC

 

[Cryptohodler]

There is something called Stripe Atlas, where Stripe helps you to setup a US LLC. Is it a good option ?
I'm in a similar situation , I'm thinking about moving to Dubai (Strip is available there ) or creating a US LLC

Before going to Dubai read the really long thread on UAE tax clarification.
US LLC tax will depend on your residence country which if you choose as Dubai you will be taxable as doing business from uae.again, read the thread.

 

[JustAnotherNomad]

There is something called Stripe Atlas, where Stripe helps you to setup a US LLC. Is it a good option ?

Usually no.

 

[Arkanoid2021]

Before going to Dubai read the really long thread on UAE tax clarification.
US LLC tax will depend on your residence country which if you choose as Dubai you will be taxable as doing business from uae.again, read the thread.

Its a traditional setup the US LLC is a ecommerce serving French speaking countries . The UAE company will receive money from the US LLC. Many have done this before without issues.

From what I read:
"Once an individual qualifies as a tax resident in the UAE, they are required to declare their worldwide income to the UAE tax authorities and file their tax returns accordingly. However, the UAE does not levy personal income tax on individuals, except for certain industries such as oil and gas and financial institutions. "

btw, Im ok paying a little of fees/taxes in the UAE that doesnt bother me.

 

[JustAnotherNomad]

Its a traditional setup the US LLC is a ecommerce serving French speaking countries . The UAE company will receive money from the US LLC. Many have done this before without issues.

And from next year it's dead. Well, actually for 150-200k, it would still work.
Invoicing the US LLC from the UAE company may not be necessary, potentially not even advisable, as the US LLC would probably have to file corporate tax returns in the UAE anyway.