Company for app income while traveling with reliable banking

[LolRoller]

Hi all,

I am looking to form a company to hold my app and receive income from the google play store and the apple app store.
Monthly income, we will expect > 20k, targeting 100k+. Currently 0 :| still in beta but very enthusiastic users. We plan on traveling over the world (in a boat) so I don't feel paying tax in my residence country (The Netherlands).

I am looking for a country with no corporate tax on foreign income, low registration fees and maintenance (we don't know how long the app income will last), no or low reporting requirements. It's not necessary to stay completely anonymous.

I also would like to have access to reliable banking, personal / corporate CC accepted worldwide, so no unexpected KYC closures. We can do that upfront, since we have a completely legit business and "nothing to hide".

The plan I have come up so far: a BVI company with a Singapore corporate bank account.
And two personal private bank accounts (also in Singapore if possible).

As a bonus I would like: automatic 50/50% transfer of the income on the corporate account to both private bank accounts or automatic transfer of a surplus above a set amount (eg 10k).
Another question: how far can we get with remote opening of the bank accounts during covid restrictions (we the owners are not vaccinated and don't plan on doing it)?

Appreciate all tips and help. Thanks.

 

[LolRoller]

Hi all,

I noticed I got no response on my question, and I wondered why.

Are my questions too complex, didn't I do enough research myself or is it improbable we're going to succeed? Or do you guys just don't take me serious because of my username ?

 

[CyprusBusiness]

Hello

From what you described above registering a BVI company may result in the following issues:

(1) Economic substance rules are in place effective from 1.1.2019 by which any legal entity established in BVI must adhere to, as failing to do so may result in criminal and financial sanctions.

Of course, there are some exemptions to what constitutes legal entity which can be explored through proper structuring. An example would be using a permanent establishment abroad (as an extension of your BVI company) and having foreign directors on the board of the BVI company. However please note this example would create a tax residency in the country where the permanent establishment is registered.

(2) If you are using Stripe, Wise, paypal etc as merchant acquirers, you should consider their policies for accepting/onboarding a client with a BVI registered company. Also you should consider apple store and googleplay policies as well as you main concern should be to avoid having the app removed by them.

For remote opening account in Singapore I am not entirely sure but from experience physical visit was necessary in the past 2 years. Of course there are agents who can handle this remotely but it comes with a high price.

Other structures that fit your lifestyle would be a Cyprus company utilising the IP Box Regime (effective tax 2.5%) in combination with non-domiciled status using the 60 days rule.

 

[Marzio]

Cyprus company utilising the IP Box Regime

To be allowed into the IP Box Regime do you need to demonstrate R&D expenses arising in Cyprus?

 

[CyprusBusiness]

Yes the IP can be acquired by the Cyprus company as a capital/debt injection from the former owner of the IP as long as it meets the definition of Qualifying asset. If no or low R&D activity will take place after transferring the IP to the Cyprus company the qualifying profit will be lower and the tax benefit will again be lower.

Most companies choose to obtain a tax ruling after incorporating the Cyprus company to make a bulletproof case.

 

[Asterion]

@LolRoller
You have to be more specific about your app income.
Is it in-app purchase that are forcibly paid to Apple/Google first?
Is it in-app purchases that can be paid to an external provider such as Stripe?
Is it ads income?

 

[Marzio]

Can you tell us what’s the difference between those income types?

AFAIK Apple in-app purchase is paid as service income.

Google in-app purchase as royalties.

Ads income (AdSense) as income.

 

[LolRoller]

Thanks all for the responses.

@CyprusBusiness Thanks for all your tips. I missed that BVI demands economic substance for resident companies since a few years, that's a bummer.
I am not too fond of service providers that "prove" economic substance while that might work for a while. I will look into cyprus, since the longer I read about this topic, the more and more I think we should pay some taxes somewhere.

@Asterion
It will be in-app purchase (recurring subscription) that are first paid to Apple / Google. No ads. As long as we stay under the 1 million app revenue (and the accompanying 15% fee) on both, I don't think we will implement payment options outside the stores.

@marzio Thanks for that info. Do you have a source for that? I cannot find much info on google about those distinctions.