Best US state to incorporate in for online adult business?

[Bluevelvet]

Hi. My website is almost done being developed and I've been told by the payment processors that would accept my business that I need to incorporate in the US, because my ID/passport is US. The payment processors are CCbill and Paymentcloud.

My home is Virginia, but I live abroad now. I've read the 4 best states to incorporate in are Delaware, Wyoming, Nevada and New Mexico. And I've also read incorporating in your own state is good.

The business is 100% online only. It's an adult website marketplace where people can sell panties and other clothes, as well as offer videos/pictures/camming. Buyers will pay sellers via apps like paypal, cashapp etc. There will be no cart on the website.

So based on that information, does anyone have any suggestions of the state I should incorporate in?

 

[Sols]

Selling used clothing (even with an adult oriented theme) isn't going to be a problem in any state I can think of. But when you get into distribution of adult content (videos, pictures, camming), you need to be mindful of state laws. California may very well be your best choice. There are some in other states (Texas, Nevada, Florida) but California is by far the leader.

Speak with lawyers in the states you're interested in. AFAIK, most of your competitors which are are US companies are incorporated in the states mentioned above.

 

[Bluevelvet]

Selling used clothing (even with an adult oriented theme) isn't going to be a problem in any state I can think of. But when you get into distribution of adult content (videos, pictures, camming), you need to be mindful of state laws. California may very well be your best choice. There are some in other states (Texas, Nevada, Florida) but California is by far the leader.

Speak with lawyers in the states you're interested in. AFAIK, most of your competitors which are are US companies are incorporated in the states mentioned above.

I researched the competitors and none are in the US. Going by my big 3 competitor's TOS, they seem to be in Australia, Bulgaria and either UK or Malta.

Well when looking online for best states to incorporate a business in, I never see California pop up. Don't they have super high taxes? Do you think Nevada would be better, because they've got Vegas and all? And like I said, Nevada is on many lists online as one of the best states to incorporate in.

So you think it would be too much of a hassle to try to incorporate an adult business in Virginia, Delaware, New Mexico or Wyoming? I am not aware of their laws for stuff like this.

 

[Sols]

I researched the competitors and none are in the US. Going by my big 3 competitor's TOS, they seem to be in Australia, Bulgaria and either UK or Malta.

That is correct. Most of your competitors are going to be a network of European and offshore companies. Almost no one has their entire business in a single entity, in order to obfuscate and isolate risks, costs, and revenues.

Well when looking online for best states to incorporate a business in, I never see California pop up. Don't they have super high taxes? Do you think Nevada would be better, because they've got Vegas and all? And like I said, Nevada is on many lists online as one of the best states to incorporate in.

It's not about taxes. It's about not violating state laws on distribution of adult content. You aren't running an average business. You're running a high-risk business with a lot of laws and regulations to consider.

So you think it would be too much of a hassle to try to incorporate an adult business in Virginia, Delaware, New Mexico or Wyoming?

I think you'll want to familiarize yourself with the laws on sale and distribution of adult content there. There might be a reason why other companies aren't setting up there.

I am not aware of their laws for stuff like this.

That's what lawyers are for. If you set this business up wrong and something slips through that shouldn't (minors, human trafficking), the repercussions range from fines to prison time.

 

[Bluevelvet]

That is correct. Most of your competitors are going to be a network of European and offshore companies. Almost no one has their entire business in a single entity, in order to obfuscate and isolate risks, costs, and revenues.


It's not about taxes. It's about not violating state laws on distribution of adult content. You aren't running an average business. You're running a high-risk business with a lot of laws and regulations to consider.


I think you'll want to familiarize yourself with the laws on sale and distribution of adult content there. There might be a reason why other companies aren't setting up there.


That's what lawyers are for. If you set this business up wrong and something slips through that shouldn't (minors, human trafficking), the repercussions range from fines to prison time.

Okay I understand what you're saying. Wouldn't Nevada be good for an adult online business though? Because of Las Vegas I'd assume Nevada is cool with adult stuff?

Also I was wanting to incorporate in EU but CCbill requires you to incorporate in the country you're a citizen of. And I think payment cloud is US only. The other payment processors I've asked said they wouldn't work with my kind of website

FYI - 2 of my competitors use CCbill. 1 uses Verotel which is EU only - but Verotel told me that they no longer will work with these kind of websites, they said: "Because its too high risk, so we can only accept business models where its max 20% physical goods, the rest being 80% digital"

 

[Sols]

Okay I understand what you're saying. Wouldn't Nevada be good for an adult online business though? Because of Las Vegas I'd assume Nevada is cool with adult stuff?

Las Vegas is tolerant of in-person adult activities, but do the same laws necessarily translate to distribution and sale of adult content online in Nevada general? It's probably fine, but I wouldn't base a business on a hunch. Hiring a lawyer to help you with this is cheaper than the consequences of doing it wrong.