Question Best country to incorporate in for Dropshipping / Ecommerce

[akao]

Looking to set up a company, in order to test some dropshipping and ecommerce stores. Will only need the company to get access to payment processors (paypal, stripe, 2co, shopify payments, etc).

Will be selling mostly to the US so we're not looking for US company (even tho it's cheap) - as tax is huge (30% if i understand correctly, from all revenue sourced in the US).
I don't mind paying tax if it's something around 10-15% and if the company formation is cheap (which is one of our requirements, as we don't want to spend too much on a company which we don't know if we'll use).
Second (and probably the most important) requirement - no or very little accounting / reporting / auditing needed. We found several jurisdictions in europe with low tax, low cost to incorporate - but the paperwork / bureaucracy is absolutely horrible (reporting every 3 months, VAT - even if you don't sell to that country, inventory entries and exits, etc - at one point we had 100-200 orders combined per day, and we can't afford to deal with all that paperwork).

So cheap to form, low or no paperwork, little taxation (comfortable with 10-15%, maybe even 20% - we'll switch to a more friendly tax country if this has success)

 

[troubled soul]

zero tax easy setup (UAE)

 

[akao]

zero tax easy setup (UAE)

i don't think that uae is cheap to form...

 

[troubled soul]

i don't think that uae is cheap to form...

There is a reason why UAE is expensive

 

[CyprusLawyer101]

Hi there,

Cyprus non-tax resident company - 0% tax.
Easy set up - relatively good fees.

Good Luck!
Lawyer101

 

[Marzio]

In your case i'll probably go with a UK LLP and residency in a territorial taxation country.

 

[rainy]

And that would free the OP from paying taxes for his UK LLP?

 

[Marzio]

And that would free the OP from paying taxes for his UK LLP?

Yes, if he for example will transfer his residency in Panama his total tax burden would be 0%.

 

[rainy]

How does that work? Whom would he have to prove that he stays in Panama as a resydent and thus doesn't have to pay taxes for his UK LLP? To the tax authorities of the UK? Wouldn't UK still oblige him to still pay 19% of taxes?

What if I'm not a UK resident and have never even been there, and I have residency outside of the UK, in some territorial-based taxation country, and I also own a UK Ltd. Even in this case, you say, I'd only have to pay a tax for my UK Ltd according to the tax rate of a country where I'm resydent at? Let's say, 10%. And not 19% which is the tax of UK Ltd?

Wait, LLP... For LTD it'd be different - tax 19% anyway?

 

[Marzio]

You are confusing UK LTD with UK LLP.

LLP is limited liability partnership, taxes are paid where partners are resident.

Territorial taxation countries will not tax foreign sourced income.

 

[rainy]

Territorial taxation countries will not tax foreign sourced income.

Alright, but UK won't tax LLP either, if a person is non resydent? Then what's in it for UK? Why does it allow a non resydent to register a LLP if it yields no money to UK?

 

[Marzio]

Why does it allow a non resydent to register a LLP if it yields no money to UK?

Because UK and their overseas territories are the freaking biggest tax haven in the world, you should stop what you are doing and sing GOD SAVE THE QUEEN immediately!

 

[rainy]

Because UK and their overseas territories are the freaking biggest tax haven in the world, you should stop what you are doing and sing GOD SAVE THE QUEEN immediately!

How could he create an LLP if it can't be formed by 1 physical person, as 2 minimum are required? Wouldn't he have to give a birth to someone first, and then wait for 18 year? Would there still be UK LLP-s in 18 years, do you know?

 

[Marzio]

2 partners are required but partners could be also companies. A dormant UK LTD as a second partner could work just fine.

 

[rainy]

Then the process would be: create a UK LTD, make it dormant either right away or after a little while, then create an LLP where the 2nd partner is that dormant LTD and that's it, right?

And since an LLP is at least as good tax-wise as an Ltd, but, most often it'll have lower taxes, or 0, depending on person's resydential location, what's the catch? Why do most people not go with an LLP instead of LTD?

 

[Marzio]

Ability to use merchant payment platforms such as Paypal, Stripe

Guys, could you help me find Mauritius in this list from Stripe website? I can't find it.

Oh yes i can't find it because Stripe is not available there!

 

[Marzio]

Why do most people not go with an LLP instead of LTD?

Well, you discovered the existence of the LLP less than 24 hour ago so the first answer would be simply because people don't know what they don't know.

Opening a bank account for a LLP could be a problem if partners are not UK residents but luckily there are a lot of options like TransferWise, Tide, Fire.

 

[Kakarot]

but Rmaudhoo you lied to him, now no one gonna trust you to incorporate anything here anyway. He got you.

 

[rainy]

Opening a bank account for a LLP could be a problem if partners are not UK residents but luckily there are a lot of options like TransferWise, Tide, Fire.

Well, whether it be an Ltd or Llp, for a non resident a bank in the UK won't open an account. Putting banking in the UK aside, are there any nuances in "Ltd vs Llp"? Then an Llp will always be a better choise?

 

[Marzio]

an Llp will always be a better choise?

For the person who started this thread yes.