Easiest way to get a real (not hidden) business PayPal account (?)

[OffshoreResearch]

I'm now a Paraguayan resident (even if I still need to buy a property to have a real utility bill and a clear proof of address but I'll do this in the coming weeks).

Well, it's not possible receiving money by PayPal for Paraguayans and considering I've an online business (I sell virtual assets like eboks and software), I'm looking for a reliable jurisdiction where setting up a real company (with a rented office in order to get an utility bill) to open a local PayPal business account.

Considering I'll not generate/declare any income produced locally in the chosen jurisdiction, I'm obviously looking a country which will not ask me to pay any taxes on my external income (I'll not even deposit funds in local banks of course but just on PayPal with the plan to reinvest directly online in various fields).

I've no fear to create a complex but still transparent structures considering I don't need to hide myself in Paraguay (territorial tax country) but just to avoid paying taxes in the chosen jurisdiction.

Any ideas ?
Thanks in advance

 

[unicorn]

you may consider other territorial tax countries ? and ebooks : if you sell through amazon, I think I read somewhere a 30 % withholding applies in the US on royalties if you sell through kindle or amazon.

 

[OffshoreResearch]

Another territorial country would be the perfect solution but I need a clear advice regarding a reliable jurisdiction where setting up a real company/office and where I'll be able to get a business PPal acct with no sending/receiving limitations (once regularly verified of course).

ebooks/software are just part of my activity and I sell them through multiple channels so I'll have no issue about Amazon (I've a partner in Europe who'll cash funds generated from sources unfriendly with my new biz structure), the important is finding the right place to setup the new company w/PPal administered by me in full transparency.

Any idea ?

 

[unicorn]

Georgia virtual IT zone company will give you business account and paypal account. You sell from Paraguay so your place of management and control is Paraguay. and your clients are outside of Georgia so 0 % tax. (territorial system). A witholding tax on the dividends you pay yourself of 5 %. Other option is Roemenia 1 % corporate tax I think if you have 1 employee and 3 % tax if you have 0 employees ; management and consulting is 5 % tax for dividends. So 95 % of your profit can go to you I believe. Some fintech accounts can also be coupled with paypal : Comparison: 22 online accounts with pre-paid cards ; so with a micro entreprise you could get several such accounts and couple paypal on those too. Not sure, I'm not an expert, but worth checking.

 

[OffshoreResearch]

Thanks unicorn, you gave me a lot of infos on whom working.
Georgia is indeed the cheapest solution here and I'll have a look at the paid cards to possibly associate to the future PayPal account.

 

[OffshoreResearch]

But I've a concern about the Georgian PPal account because I still need to rent a physycal office, getting an utility bill and an equivalent of a tax payer certificate in order to verify the future account. Am I missing something ?
Anything can be done, I'm just trying to study carefully any aspects of this structure.

 

[Gediminas]

Malta could be an option with an effective 5% corporate income tax rate, no dividend withholding tax in most cases, EUR national currency and comparable low costs to set up substance.

 

[OffshoreResearch]

I've been in Malta in December to discuss already this possibility with a local consultant but it's quite hard getting a corporate bank account for some kind of activities he said, t his means I'll waste months in waiting to get one and without a local acct. I'd have no way to confirm PayPal.
Then I should use the holding structure, he explained me anything in details while in Georgia it seems I'll just pay 5% on dividends and this solution shold be much easier to setup.

Strange coincidence: for other reasons I'll be in Tbilisi this week so now I've the opportunity to investigate further about this topic as well
Sometimes life surprises us, I'll be in the right place at the right time.

 

[Gediminas]

I've been in Malta in December to discuss already this possibility with a local consultant but it's quite hard getting a corporate bank account for some kind of activities he said, t his means I'll waste months in waiting to get one and without a local acct. I'd have no way to confirm PayPal.
Then I should use the holding structure, he explained me anything in details while in Georgia it seems I'll just pay 5% on dividends and this solution shold be much easier to setup.

Strange coincidence: for other reasons I'll be in Tbilisi this week so now I've the opportunity to investigate further about this topic as well
Sometimes life surprises us, I'll be in the right place at the right time.

Let us know how did it go in Tbilisi. It might be an easier option for you now but you don't want always go the easy ways in your life. In regards to local banks in Malta, if you wish, I might be able to help you there, so let's keep this topic updated.

 

[OffshoreResearch]

I'll surely update you all about my Tbilisi experience.
This time I'll be just there for 3 days but I'm already planning to go back in February to rent an office and to finalize the whole thing while now I'll start to collect some info on how moving forward.
I'll also take a note of your nick with reference to a possible future Malta account in case I should opt for that jurisdiction (who knows) but let's see what I'll learn in Tbilisi first.

 

[James2774]

Maybe I’m missing something but if you open a US LLC or a UK LLP there is zero corporate tax and no tax liability for a foreigner.
You can also create those corps online cheap/quick with registered agent, address, use their utility bill etc for the PayPal

if you need a US bank Mercury.co can be opened online.
UK bank you’d need to show up in person or go about it in a back foot grey area way to my knowledge

 

[speedster]

Maybe I’m missing something but if you open a US LLC or a UK LLP there is zero corporate tax and no tax liability for a foreigner.
You can also create those corps online cheap/quick with registered agent, address, use their utility bill etc for the PayPal

if you need a US bank Mercury.co can be opened online.
UK bank you’d need to show up in person or go about it in a back foot grey area way to my knowledge

You'll most likely be taxed in your home nation though

 

[James2774]

You'll most likely be taxed in your home nation though

So you mean Paraguay will tax him for money earned through the LLC?

 

[speedster]

So you mean Paraguay will tax him for money earned through the LLC?

It seems Paraguay doesn't have CFC rules, so no. My apologies

 

[OffshoreResearch]

There's no tax applied by Paraguay on foreign income, no doubt here.
I like travelling so I can go personally to open an account for an UK LLP company for instance but I've still a couple of questions:

1. Will I be able to open the account in an UK bank or I'll need to open it outside UK ?
2. Will all my income by exempted from tax or the one produced in UK (if any) will be taxed ?
3. What're the docs needed to be eligible to open a PayPal account in UK for my LLP company ? I'll need to rent an office in order to get an utility bill I guess and what else ?

Thanks for your assistance, I'm apparently close to a possible solution always supposing that UK banks will agree to open the account to a Paraguayan resident (I'll not know for sure until I'll not try)

 

[OffshoreResearch]

QUICK UPDATE (About my Tbilisi travel):
I wasn't organized to meet a consultant but I've been able to get a quick meeting with a group of 3 young guys actually offering assistance to anyone looking to start a business in Georgia.
I've just had the chance to chat with them for few mins but I'll be back with more calm towards the end of February to discuss more in details the whole matter.

Well, this's what I remember of the discussion but don't take anything for good for now. I'll communicate with them again in the next days by email to have anything under hand so I'll be able to clarify better how things work (supposing I'm actually saying something of wrong not having taken any note on the moment).

It's possible opening a local company in a 'free zone' and foreigners will pay no tax on foreign income and just 5% on dividends but they've multiple ways to avoid cashing dividends directly by investing in anything they like (there's no need to cash dividends and no tax applied until you'll not withdraw them to your personal account).
You can also withdraw all your funds in favor of another offshore company by just invoicing your Georgian company for the sale of services and/or other stuff.
There's no limitations over the amount of money you can earn and withdraw elsewhere or reinvesting free of charge.

Software/IT technology companies may be eligible to legally pay no tax over their dividends as well.

These guys say it's quite easy getting a local PayPal business account and they can assist in completing the easy verification process, they say there's no need for a local office (so I guess the utility bill may be replaced by some other docs in this case).
They also say business accounts are charged 25% (twentyfive %) on their incoming payments but this sounds quite strange to me and considering they're against PayPal, I'm not sure about this info.

Where may we find more info about the exact Paypal service fees applied to each country ? I've been unable to find a link to the Georgian ones.
I may also call them but at what number considering Georgia doesn't have a local PayPal office ?

 

[James2774]

There's no tax applied by Paraguay on foreign income, no doubt here.
I like travelling so I can go personally to open an account for an UK LLP company for instance but I've still a couple of questions:

1. Will I be able to open the account in an UK bank or I'll need to open it outside UK ?
2. Will all my income by exempted from tax or the one produced in UK (if any) will be taxed ?
3. What're the docs needed to be eligible to open a PayPal account in UK for my LLP company ? I'll need to rent an office in order to get an utility bill I guess and what else ?

Thanks for your assistance, I'm apparently close to a possible solution always supposing that UK banks will agree to open the account to a Paraguayan resident (I'll not know for sure until I'll not try)

1. To open a UK/EU bank you need to do it in person, just like the US (for the most part, you can also have a partner in the corp do it in person for you, but then of course you must have a partner). Keep in mind, an LLP requires TWO directors, you can open it by yourself and the filing company will be a 1% partner for legal purposes. However they will not open a bank account for you.
2. All income produced outside the UK will be tax free. You would have a UK tax liability if you sell within the UK. The LLP itself is a pass through corp btw.
3. When you open a corp online (at least in the UK and USA), the corp can give you a registered agent, address, phone, etc, you will use those docs for your paypal account along with your corp docs (Articles of INC and EIN in the USA for example)

Im not sure why people dont do this its really the answer for all the "how do i get a PayPal account/bank account etc". Just open a corp online and you are basically a citizen of that country and dont have to pay taxes in that country.
Maybe im missing something but I dont think so.

 

[James2774]

QUICK UPDATE (About my Tbilisi travel):
I wasn't organized to meet a consultant but I've been able to get a quick meeting with a group of 3 young guys actually offering assistance to anyone looking to start a business in Georgia.
I've just had the chance to chat with them for few mins but I'll be back with more calm towards the end of February to discuss more in details the whole matter.

Well, this's what I remember of the discussion but don't take anything for good for now. I'll communicate with them again in the next days by email to have anything under hand so I'll be able to clarify better how things work (supposing I'm actually saying something of wrong not having taken any note on the moment).

It's possible opening a local company in a 'free zone' and foreigners will pay no tax on foreign income and just 5% on dividends but they've multiple ways to avoid cashing dividends directly by investing in anything they like (there's no need to cash dividends and no tax applied until you'll not withdraw them to your personal account).
You can also withdraw all your funds in favor of another offshore company by just invoicing your Georgian company for the sale of services and/or other stuff.
There's no limitations over the amount of money you can earn and withdraw elsewhere or reinvesting free of charge.

Software/IT technology companies may be eligible to legally pay no tax over their dividends as well.

These guys say it's quite easy getting a local PayPal business account and they can assist in completing the easy verification process, they say there's no need for a local office (so I guess the utility bill may be replaced by some other docs in this case).
They also say business accounts are charged 25% (twentyfive %) on their incoming payments but this sounds quite strange to me and considering they're against PayPal, I'm not sure about this info.

Where may we find more info about the exact Paypal service fees applied to each country ? I've been unable to find a link to the Georgian ones.
I may also call them but at what number considering Georgia doesn't have a local PayPal office ?

Sounds more complicated and more costly.
WIth a US/UK LLC/LLP it costs maybe $100 to do it online and a trip to a bank. You can even get a US bank online for this at mercury.co as a foreign non resident business for free.

Then you have all the docs needed for your paypal and zero taxes, vs going through Georgian middlemen and paying 5% on dividends etc,
Business PayPal in US/UK is what 2.75%? No avoiding that of course.


Let me add btw that PayPal is not so kind to digital goods, they close accounts for that often enough. With a UK/US LLC however you can certainly acquire a merchant account of your own that will accept those products

 

[OffshoreResearch]

An LLP seems to be the perfect solution for me, thanks a lot for sharing all these details about it.

1. So the second partner owning 1% of the company might still be able to take possess of the company bank account or there's a way to limit his rights ?

2. What's the % paid on dividends just in case I should decide to withdraw them to my personal bank account instead of going through the Georgian company ? Surely higher than the Georgian 5% I guess
Just to know ...

 

[AmenChoice]

Brilliant idea. Makes sense to me but does it actually work in practice? Doesn’t the IRS limit ownership of LLCs to only US residents and ask for ID?