Hi guys!
I have been exploring multiple setup options for a new dropshipping / e-commerce venture and have hit a dead end in terms of choosing the right offshore setup/bank/payment processor. Hoping you guys can help me with some questions. Some information that should help you provide suggestions.
Personal Background:
Business Plan:
Questions:
I really want to run an honest business, save enough, pay taxes that make sense or reduce them as much as possible + Stay on the right side of law and grow the brand slowly into a label/pivot to subscription or just retire at some point.
Any help would be great in untangling this complex web!
I aint really rich and have a strict budget plan, so I hope your suggestions wont burn a big hole in my pocket.
Thanks again!!
I have been exploring multiple setup options for a new dropshipping / e-commerce venture and have hit a dead end in terms of choosing the right offshore setup/bank/payment processor. Hoping you guys can help me with some questions. Some information that should help you provide suggestions.
Personal Background:
- I am non eu/non american citizen, residing in Spain.
- Thanks to a special tax law, I am not taxed on worldwide income in Spain (for another 2 years) and only on local income.
- I am not a tax resident in my country of citizenship for the last 10 years.
- I want to take advantage of this two year window which is tax loophole as currently I am not taxed on my worldwide income anywhere - and want to keep my nose clean (low tax setups are also fine with me).
Business Plan:
- I am working on two completely legitimate dropshipping ventures
- one dealing with expensive high street apparels and accessories, shipping worldwide - and
- another selling really cheap (under 10) clothing worldwide.
- Two different stores (with language based sub domains and geo-fencing), different branding, different mode of shipping.
- My high street warehouse vendor is EU and US based and my low end apparel store vendors are china and turkey based.
- Woocommerce is what my team is currently building these stores on.
- Would like to avoid Paypal and similar non-merchant bank providers due to high fees, reserve requirement, reactive fraud prevention and chargeback issues leading to account freeze. Isnt great for my own customers.
- While I can personally visit banks for corporate account opening, a pure offshore bank has very limited payment processing/gateway options. Even if there are any, fees are crazy.
- Open to "typical" offshore setup (tax havens) but this complicates banking options.
- While I plan to report dividends once am a proper tax resident in Spain, until then I would like to keep this venture outside tax purview.
- Know Spain sucks from a tax resident perspective, but I cant relocate in the near future
- Zero corporate tax / low audit reqs/non EU setup is possibly better as I can use a "company" card to reduce quantum of dividend payments and thus resulting tax.
- Will pay VAT /tax on sales - as per local rules.
- Most banks have a "high-risk" view of dropshipping, even though my suppliers are legit and visits can be arranged.
- I did toy with multiple setups including, Irish /Cyprus company with local bank accounts- though the corporate tax is lower than rest of EU, banking is complicated and tax proximity/EU agreement may complicate matters with Spain.
- I did check the option of a USA LLC (FL/DL/WY), but banking again becomes a stumbling block. Also I will have to pay US taxes since I'll be selling to US customers (though I am open to considering this).
- Reviewed IOM, Jersey, BVI, Belize, Panama, Seychelles, Mauritius etc are great options, but banking services make it complex and expensive.
- UAE Freezones arent recommended for ecommerce and also UAE is one of my target markets - so that rules it out.
- Madeira would have been great, but a 70k investment in year 2 is gonna be hard...
- Also looking into private bankers who are open to ecommerce.
- Gibraltar, UK and other crown concerns could have an adverse fallout given Brexit (or not.)
Questions:
- What kind of company setup would you suggest for Tax benefits and to limit exposure/support anonymity? Does it make sense to have an Offshore Trust+ two separate LLC entities in EU OR Separate LLC entities outside EU (typical offshore setup)?
- What country(ies) would you recommend for the LLCs?
- What country would you recommend and are open for banking based on the recommended countries (I dont have $$ for minimum balance based opening) ?
- What reliable/comparatively inexpensive payment processor/gateway solution would you recommend that supports such a setup?
- What country and bank would you suggest if I plan to accept crypto as payment (may be at some point in the future).
I really want to run an honest business, save enough, pay taxes that make sense or reduce them as much as possible + Stay on the right side of law and grow the brand slowly into a label/pivot to subscription or just retire at some point.
Any help would be great in untangling this complex web!
I aint really rich and have a strict budget plan, so I hope your suggestions wont burn a big hole in my pocket.
Thanks again!!
