Midshore Company formation

[CCR]

Greetings!

I am looking for a reliable service provider who could advise the best jurisdiction for my business. I am engaged in E-commerce (mostly Amazon, Shopify). So far I've been working without a company and I had no need in creating one. Now that the company is growing in terms of turnover and people, I need to create a company.

Requirements:
- No grey area jurisdiction
- Low dividend tax
- Low income tax
- Ability to put all the employees on this company (low or non-existing social taxes since all the employees are from CIS countries)

Entries:
- all employees would be from CIS countries
- the owner - me - is from CIS
- countries engaged with e-commerce: USA, UK, China

Would appreciate any help.

 

[Sols]

Take a look at Cyprus, Malta, Gibraltar, Isle of Man, and UAE. Maybe Singapore. Maybe Labuan.

Don't hire the employees as regular employees, if you can. It's better if you can hire them as consultants/service providers. If someone is an employee, it very often becomes a much more difficult project and may require payroll tax, social security registration, and even work permits (or expensive, time-consuming discussions with lawyers and government officials to get exemptions). If they are service providers, there is generally nothing to worry about.

 

[CaptK]

Also look at Romania and Montenegro, they could also work for you and a lot cheaper.

 

[uplana]

Take a look at Cyprus, Malta, Gibraltar, Isle of Man, and UAE. Maybe Singapore. Maybe Labuan.

can't supply with any other countries, agree 100% here.

 

[CCR]

Thank you guys for the replies - will look into these jurisdictions.

 

[GPT]

Take a look at Cyprus, Malta, Gibraltar, Isle of Man, and UAE. Maybe Singapore. Maybe Labuan.

Don't hire the employees as regular employees, if you can. It's better if you can hire them as consultants/service providers. If someone is an employee, it very often becomes a much more difficult project and may require payroll tax, social security registration, and even work permits (or expensive, time-consuming discussions with lawyers and government officials to get exemptions). If they are service providers, there is generally nothing to worry about.

Adding Bulgaria to the list. From CIS perspective not a bad option. More or less in the same tax brackets as Cyprus and Malta.

 

[uplana]

Adding Bulgaria to the list. From CIS perspective not a bad option. More or less in the same tax brackets as Cyprus and Malta.

why would you setup your company in Bulgaria?

 

[GPT]

why would you setup your company in Bulgaria?

It fulfils most if not all requirements of TS.

 

[uplana]

It fulfils most if not all requirements of TS.

TS = ?

 

[GPT]

TS = ?

TS is the abbreviation for Topic Starter.

 

[sujoe]

Use a Holding Company + US LLC method

Advantages are, the US LLC pays no federal taxes, no employee social taxes, able to get access to Stripe/Paypal/Amazon/Bank, and more importantly able to apply for credit line for your ecommerce business down the road. As for the holding company set it up either in Estonia, Romania, Hong Kong, Georgia or Labuan.

 

[CCR]

Use a Holding Company + US LLC method

Advantages are, the US LLC pays no federal taxes, no employee social taxes, able to get access to Stripe/Paypal/Amazon/Bank, and more importantly able to apply for credit line for your ecommerce business down the road. As for the holding company set it up either in Estonia, Romania, Hong Kong, Georgia or Labuan.

Do you mean that the owner of an LLC would be a Holding company, hence a Holding company would be required to pay taxes in its country of tax residency, right?

That could work, only if there weren't one peculiarity with my business. I mostly operate on Amazon, and it's Policy is a company having 1 account. If not, these accounts become related and in case something happens to one of the accounts, it automatically blocks all of them. This is a huge risk considering that Chinese sellers can and will use black-hat techniques to gain an advantage.

Hence, I've decided that the safest option would be opening LLCs with a single-member nominal director. All the profits from this LLC would be going to a Holding company as marketing, logistics etc, but on paper, it would be Agency-alike.

 

[sujoe]

No, the holding company would not get taxed normally. Ideally you need to have the holding company that is registered in a jurisdiction that is favorable to Holding Companies tax-wise.

As for Amazon, the rule of not having more than one account is not valid anymore, you can setup multiple accounts as long as your accounts sell different products/brands, of course it would be better if each account use their own individual company and bank accounts.

However, the conversation at hand does not involve two amazon accounts. you just setup one account with the US LLC. All the profits from the LLC will be either declared as profits or dividends depending on the jurisdiction that you choose.