Challenges of having US/NY LLC + US bank

[blabla]

Hi all

I have been thinking a bit about the right setup for my company. I run an international trading co, and live in a jurisdiction in Africa where personal income is not really looked into (unlike its corporate tax)

Purpose of the setup
- be a profit centre and limit corporate tax paid
- low ongoing reporting requirements
- get access to a strong financial centre that would ultimately finance some of my operations
- anonymity is not really an issue as the business is legit and personal income tax not really an issue

Characteristics
- Around US$5m revenue pa
-Around US$500k profit pa
- No income generated in the US

Looking at the options, it appears a US LLC would fit the purpose quite well but have questions
- How easy is it open a top tier bank account if I am not physically operating in the US?
- Where best in the US? NY appear premium, without badwill attached to a Delaware co.
- What are the risks with the setup with most income coming from Africa?

Also considered
- Seychelles looked interesting but I wonder about access to the right banking platform
- UK LLP (will get a close family member to partner) but appears difficult to open a UK bank account?
- HK setup + Singapore bank account or Singapore setup + HK bank account also considered

Please let me know your thought and if I am missing something else/any other risk with this kind of setup

 

[Outlander]

I'd go for the LLC in the US, but being an African citizen, you'll most likely need to go physically there to open a bank account and be conscious that they might want you to go through enhanced KYC. At the end of the day it boils down to the size of your business, if you have enough funds you can hire a local lawyer, sign a PoA and convince a bank to open an account for you.

 

[blabla]

Actually I am a UK citizen, but living mostly in Africa.

So access to a top bank for day to day operations (Citi, Chase etc) is likely to be a challenge?

 

[Outlander]

From what I see, if you have a US LLC as a non-resident you can choose between retail and private banking. if it's retail banking you most likely need to go there. If it's private banking, you could live in Uranus and they don't care.

I don't have a US LLC myself, this is my impression by talking to other people as well as posts in this forum.

 

[Milky Moon]

Home of Free Small Business Checking - SmallBusinessBank.com (you need to source it via a US bank, ACH account)(Transferwise can do this, maybe Payoneer)

 

[JustAnotherNomad]

I would also go for US LLC because you don’t need nominees like in Singapore.
Hong Kong is on some blacklists.
UK LLP I don’t know much about, but I’d expect there to be more accounting than for a US LLC.
A US LLC is inexpensive to form, you could simply register the company and try to get a bank account opened. Ideally use your CPA as the registered agent and not some big company that has millions of companies registered to the same address. That should make it easier to get the bank account. And if it really doesn’t work out, worst case is you’ve lost <$1000. But you will probably have to go there to open the account.

 

[onemansomewhere]

Hi all

I have been thinking a bit about the right setup for my company. I run an international trading co, and live in a jurisdiction in Africa where personal income is not really looked into (unlike its corporate tax)

Purpose of the setup
- be a profit centre and limit corporate tax paid
- low ongoing reporting requirements
- get access to a strong financial centre that would ultimately finance some of my operations
- anonymity is not really an issue as the business is legit and personal income tax not really an issue

Characteristics
- Around US$5m revenue pa
-Around US$500k profit pa
- No income generated in the US

Looking at the options, it appears a US LLC would fit the purpose quite well but have questions
- How easy is it open a top tier bank account if I am not physically operating in the US?
- Where best in the US? NY appear premium, without badwill attached to a Delaware co.
- What are the risks with the setup with most income coming from Africa?

Also considered
- Seychelles looked interesting but I wonder about access to the right banking platform
- UK LLP (will get a close family member to partner) but appears difficult to open a UK bank account?
- HK setup + Singapore bank account or Singapore setup + HK bank account also considered

Please let me know your thought and if I am missing something else/any other risk with this kind of setup

If you are a UK citizen, US banks almost does not care where you live. If you do not live in any of blacklited countries like Somalia, Yemen, ..

Here are somw of your answers:

Purpose of the setup - be a profit centre and limit corporate tax paid
US is a good choice if you have no suppliers in USA, no customers n USA, no real operations in USA

Purpose of the setup -low ongoing reporting requirements
There are few forms which you have to file each year by the IRS. IRS shares this informations with tax authorities of other countries in non official level. To be absolutely sure, obtaining some paper residence in country with a territorial tax system makes sense as addition to incorporation in USA.

Purpose of the setup - get access to a strong financial centre that would ultimately finance some of my operations
Forget about any business financing option in the US. If you do not have a US SSN and reasonable personal credit level, no financing in the USA is available..

Purpose of the setup - anonymity is not really an issue as the business is legit and personal income tax not really an issue
There is nothing like anonymity if banking with US banks


- How easy is it open a top tier bank account if I am not physically operating in the US?
Easy, if you are willing to travel. UK Passport + corporate documents + US mobile phone number + US address are the only things which you need

- Where best in the US? NY appear premium, without badwill attached to a Delaware co.
Forget NY. There are required more state filling and fees with NY. The best option by my professional opinion is Wyoming,.

- What are the risks with the setup with most income coming from Africa?
The most of US banks does not accept international wire transfers from high risk countries. To be honest, almost no reasonable banks in a first world accepts incoming wire transfers from high risk countries..
Can your customers pay by the credit cards? If yes, processing a credit card payments can be much easier..

Also considered - Seychelles looked interesting but I wonder about access to the right banking platform
No real bank will open a bank account for Seychelles company having income from Africa

Also considered - UK LLP (will get a close family member to partner) but appears difficult to open a UK bank account?
Easy to set up and running and easy to open a bank account when you are a UK citizen.
If one of the partners will be UK resident, this LLP will be considered by HMRC as localy managed and will be taxted the same as LTD. All accounting, reporting and paying taxes.. Not a choise

Also considered - HK setup + Singapore bank account or Singapore setup + HK bank account also considered
HK and Singapore accountants are very expensive. Audit will be required in your case in both jurisdictions. What is not cheap as well. There is a risk that HK and Singapore banks will be not willing to accept incoming transfers from Africa.

If you want no or low accounting and reporting, Low fees, having a bank account with resonable services in a bank with accepting incoming payments from Africa, the best solution for you will be company and bank account in Mauritius.

 

[blabla]

If you are a UK citizen, US banks almost does not care where you live. If you do not live in any of blacklited countries like Somalia, Yemen, ..

Here are somw of your answers:

Purpose of the setup - be a profit centre and limit corporate tax paid
US is a good choice if you have no suppliers in USA, no customers n USA, no real operations in USA

Purpose of the setup -low ongoing reporting requirements
There are few forms which you have to file each year by the IRS. IRS shares this informations with tax authorities of other countries in non official level. To be absolutely sure, obtaining some paper residence in country with a territorial tax system makes sense as addition to incorporation in USA.

Purpose of the setup - get access to a strong financial centre that would ultimately finance some of my operations
Forget about any business financing option in the US. If you do not have a US SSN and reasonable personal credit level, no financing in the USA is available..

Purpose of the setup - anonymity is not really an issue as the business is legit and personal income tax not really an issue
There is nothing like anonymity if banking with US banks


- How easy is it open a top tier bank account if I am not physically operating in the US?
Easy, if you are willing to travel. UK Passport + corporate documents + US mobile phone number + US address are the only things which you need

- Where best in the US? NY appear premium, without badwill attached to a Delaware co.
Forget NY. There are required more state filling and fees with NY. The best option by my professional opinion is Wyoming,.

- What are the risks with the setup with most income coming from Africa?
The most of US banks does not accept international wire transfers from high risk countries. To be honest, almost no reasonable banks in a first world accepts incoming wire transfers from high risk countries..
Can your customers pay by the credit cards? If yes, processing a credit card payments can be much easier..

Also considered - Seychelles looked interesting but I wonder about access to the right banking platform
No real bank will open a bank account for Seychelles company having income from Africa

Also considered - UK LLP (will get a close family member to partner) but appears difficult to open a UK bank account?
Easy to set up and running and easy to open a bank account when you are a UK citizen.
If one of the partners will be UK resident, this LLP will be considered by HMRC as localy managed and will be taxted the same as LTD. All accounting, reporting and paying taxes.. Not a choise

Also considered - HK setup + Singapore bank account or Singapore setup + HK bank account also considered
HK and Singapore accountants are very expensive. Audit will be required in your case in both jurisdictions. What is not cheap as well. There is a risk that HK and Singapore banks will be not willing to accept incoming transfers from Africa.

If you want no or low accounting and reporting, Low fees, having a bank account with resonable services in a bank with accepting incoming payments from Africa, the best solution for you will be company and bank account in Mauritius.

Many thanks for your comprehensive answers.
You mention company + bank in Mauritius. Actually a competitor/friend mentions having a similar setup but using Seychelles co + Mauritius bank (ABC). He is satisfied excepted that his bank is annoying for checking all inwards (vs invoices) and outward payments. Quite annoying and time consuming. Probably there are other more business friendly banks

To your point, do you see any benefit of having a Mauritius co vs Seychelles ?

 

[ih8socialism]

Many thanks for your comprehensive answers.
You mention company + bank in Mauritius. Actually a competitor/friend mentions having a similar setup but using Seychelles co + Mauritius bank (ABC). He is satisfied excepted that his bank is annoying for checking all inwards (vs invoices) and outward payments. Quite annoying and time consuming. Probably there are other more business friendly banks

To your point, do you see any benefit of having a Mauritius co vs Seychelles ?

Mauritius is not blacklisted like Seychelle and afaik there is a 10% corporate tax or was it income?

For banks you can check out AfrAsia Bank Mauritius – Personal, Private, Corporate and International Banking

If you have any specific questions about Mauritius lmk, I have a good friend who is married to lady from mauritius and 2 friends from reunion island living there since couple of years and doing business there.

 

[JohnLocke]

It is an interesting point people rise. Seychelles is blacklisted and now it is not worth anything, it means, it is useless?

Mauritius companies are almost as difficult as Seychelles when it comes to banking, the local bank in Mauritius may only accept local companies or require tons of documents, or am I wrong?

 

[onemansomewhere]

It is an interesting point people rise. Seychelles is blacklisted and now it is not worth anything, it means, it is useless?

Mauritius companies are almost as difficult as Seychelles when it comes to banking, the local bank in Mauritius may only accept local companies or require tons of documents, or am I wrong?

This is why I advised Company in Mauritius + Bank account in Mauritius..

Many thanks for your comprehensive answers.
You mention company + bank in Mauritius. Actually a competitor/friend mentions having a similar setup but using Seychelles co + Mauritius bank (ABC). He is satisfied excepted that his bank is annoying for checking all inwards (vs invoices) and outward payments. Quite annoying and time consuming. Probably there are other more business friendly banks

To your point, do you see any benefit of having a Mauritius co vs Seychelles ?

Banks in Mauritius are alergic to Seychelles companies with non Seychelles UBOs.

Any bank in Mauritius will open bank account for company incorporated in Mauritius.

Mauritius is not blacklisted like Seychelle and afaik there is a 10% corporate tax or was it income?

For banks you can check out AfrAsia Bank Mauritius – Personal, Private, Corporate and International Banking

If you have any specific questions about Mauritius lmk, I have a good friend who is married to lady from mauritius and 2 friends from reunion island living there since couple of years and doing business there.

There are 2 types of companies in Maurutius. 1. Domicilled companies - good it you need to use DDT - you have to pay corporate tax, 2. Offshore companies - it is just not called offshore anymore - good if you do not need to use DDT. Both types of companies are welcomed by banks in Mauritius. Banks does not care which type of company it is.

 

[isyet]

Hi all

I have been thinking a bit about the right setup for my company. I run an international trading co, and live in a jurisdiction in Africa where personal income is not really looked into (unlike its corporate tax)

Purpose of the setup
- be a profit centre and limit corporate tax paid
- low ongoing reporting requirements
- get access to a strong financial centre that would ultimately finance some of my operations
- anonymity is not really an issue as the business is legit and personal income tax not really an issue

Characteristics
- Around US$5m revenue pa
-Around US$500k profit pa
- No income generated in the US

Looking at the options, it appears a US LLC would fit the purpose quite well but have questions
- How easy is it open a top tier bank account if I am not physically operating in the US?
- Where best in the US? NY appear premium, without badwill attached to a Delaware co.
- What are the risks with the setup with most income coming from Africa?

Also considered
- Seychelles looked interesting but I wonder about access to the right banking platform
- UK LLP (will get a close family member to partner) but appears difficult to open a UK bank account?
- HK setup + Singapore bank account or Singapore setup + HK bank account also considered

Please let me know your thought and if I am missing something else/any other risk with this kind of setup

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