Foreign China residents offshore options

[ap1]

I'm a EU citizen with residence in China (less than 5 years, leaving the country for at least 30-60 days/year) and I own the 100% of a EU company. I'm exploring the idea of dissolving my EU company and incorporate another one offshore. Any specific recommendations for foreigners living in China? I value the most an easy compliance and worry free banking system. Thank you!

1. Online Travel Services.
2. Bank account for a travel business.
3. All 100% legal, seeking for an easy compliance / low tax jurisdiction outside China.

 

[sujoe]

Any reasons why you want to dissolve the EU company? what's your nature of business?

 

[ap1]

The reason is because of tax optimization and an easier compliance.

It's a travel company.

 

[sujoe]

Not knowing the full situation, I would suggest the safest bet, an US LLC, which doesn't exchange information with China. There are no accounting or auditing requirements as long as you don't trigger USTB and ECI, just make sure that you don't have US-based employees or exclusive agents, then you are fine.

If the turnover is smaller than 1mil euro, try getting the Romania Microcompany, where they either tax 1% or 3% on the revenue. A very good proposition if you have a high-margin business. Only thing you need to be aware of Romania is in the CRS and would report your info to China year-end, where you are a tax resident, but the good thing is you are not yet deemed domiciled and resident in China yet, so you are not taxed on worldwide income, but be aware of the place of effective management rules of China.

 

[ap1]

Thank you @sujoe. Romania is not an option for me. I've researched about incorporating a Nonresident Alien, Single-Member LLC and looks appealing. My only worry here is the U.S. Travel Agency Regulatory Compliance. I'm in consultations at the moment before taking the final decision. Furthermore, Travel companies are considered high risk businesses by Banks and payment gateways, so it's something I should clear in advance.

About the China side, my tax advisor here said there should be no problem. Wanted to hear real experience from other expats in China, though. As this is quite a tricky country.

 

[sujoe]

Banking and Payment Gateways are surely a problem for the Travel Industry, but I think you are still able to get them. About the US Travel Agency Regulatory Compliance issue, what if you only service non-US customers and use another company outside US to service US citizens, that is, if this regulation is applicable to you. As for China, I had been in China for more than 10 years, you are regarded as non-domiciled but tax resident in China, you won't be liable to non-PRC income.

 

[ap1]

Thank you again @sujoe. As a nonresident alien in the US, some banks told me that they expect the LLC to do business in US too. Not sure if I they would close the LLC account if all the business is coming from abroad. Some lawyer mentioned that, as I’m a nonresident alien, bonds might be more expensive or even difficult to get for the LLC. I have to clear this kind of details, tax structure is clear for me now.

 

[sujoe]

No problem, once you clear up the issue of the regulation, and decided to go with the US LLC, give me a ping, I might be able to get you a financial institution that is able to service your industry.