Business structure for marketplace?

[d4567]

Hi, I'm seeking advice I'd like to set up a structure for a makert place so good banking is a must. I have Australian and Euro citizenship. I'm fine with paying taxes personally. More so want to structure the business for tax efficiency and low paperwork.

Thing's I'm considering:

Approach 1)
A) Canadian Passthrough LP - for global trade besides canada
B) US LLC (single member) - for trade in Canada
C) LLC in Territorial tax based country, perhaps Panama, Gibraltar or Costa Rica.

Where by the US LLC would be registered under entity C. And the Canadian Partnership is registered under entity C and myself (possible under my euro citizenship) And Use entity C tp consult a company else where when a work force is required. The idea would be to have bank accounts in all 3 places.


Approach 2) Circular ownership, whereby
A) US LLC (single member) that is owned by;
B) a UK LLP, owned by my euro self and;
C) a Canadian LLP that is owned by myself and the US LLP.

So that each is pass-through


What do you think? Ultimately the stress and less paperwork the better.

 

[Jabbar]

Where are your main markets? Which countries?

 

[Jerry1911]

A) Canadian Passthrough LP - for global trade besides canada
B) US LLC (single member) - for trade in Canada
C) LLC in Territorial tax based country, perhaps Panama, Gibraltar or Costa Rica.

This will be a nightmare to manage. Set up a company in some low tax jurisdiction with proper substance (and by extension, banking) and call it a day.

By the way, you also need to factor in your personal residency which you haven't specified anywhere in your post.

 

[d4567]

Where are your main markets? Which countries?

The aim is to very much be a global product. No limitations other than countries that have sanctions

This will be a nightmare to manage. Set up a company in some low tax jurisdiction with proper substance (and by extension, banking) and call it a day.

By the way, you also need to factor in your personal residency which you haven't specified anywhere in your post.

For residency I plan to live in Australia and the pacific. I'm happy to pay personal tax on income when I pay myself a wage. But if foreign control would be an issue I could be flexible. Possibly Europe again also

 

[Sols]

Why not form an Australian company? Why the complication with foreign companies and multiple layers?

There are no tax savings for you as long as you own/control the companies from Australia. They are tax resident in Australia and have to pay taxes like a local company anyway.

You aren't exactly saving yourself much paperwork if you're setting up a multi-layered structure either.

Consider also how your business would actually operate, which regulations apply (many types of marketplaces are regulated in EU/UK), and what (if any) payment processors would touch your convoluted two-trips-across-the-Atlantic structure.

 

[d4567]

Why not form an Australian company? Why the complication with foreign companies and multiple layers?

There are no tax savings for you as long as you own/control the companies from Australia. They are tax resident in Australia and have to pay taxes like a local company anyway.

You aren't exactly saving yourself much paperwork if you're setting up a multi-layered structure either.

Consider also how your business would actually operate, which regulations apply (many types of marketplaces are regulated in EU/UK), and what (if any) payment processors would touch your convoluted two-trips-across-the-Atlantic structure.

Although I am in Australia now, with in the next 5 years I don't plan to be here for at least 3.5yrs to 4yrs.

I figured registering offshore I could potentially avoid some initial headaches with GST (VAT) in Australia.

The plan would still be to register in a reputable country to enable payment processing

 

[Fred]

The aim is to very much be a global product. No limitations other than countries that have sanctions


For residency I plan to live in Australia and the pacific. I'm happy to pay personal tax on income when I pay myself a wage. But if foreign control would be an issue I could be flexible. Possibly Europe again also

You need to make yourself familiar with CFC rules - no matter which from your mentioned structures - if you manage them out of Australia - Australian CFC rules apply and the companies would be handled from Australian Tax Authorities like a local Australian Company.

Same goes for every EU Country - we know from our clients Cyprus doesn't enforce the CFC rules hard yet but this can change quick.

Issue would be payment gateway as well no matter if independent or through Marketplaces as soon as it comes to PayPal, Stripe and such they can't or don't want to handle structures like US LLC with no substance and UBO is Resident in Australia.

So you would need to look for a jurisdiction which enables you a Residence Visa through the Company Formation and good payment processing coverage - the lowest possible bureaucracy and of course tax you can find in Dubai, UAE - it has it all - what you maybe have already figured out. Beside of that you have Cyprus which is more difficult and time intensive to get done as you would need at least on the paper the Residence there for a closed working story which requires pink slip as Australian passport holder but as you mentioned you have EU passport it shouldn't be a big issue.

General speaking you should utilise your EU passport for diversification purpose if you plan to go offshore now but not intend immediately to relocate.