Hi all, I've been on and off this forum for about a year, but need to wrap things up and find a good set-up for my business I am starting. As many of you always ask for details before being able to recommend, that's exactly what I will give you, so here we go 
1) It's an online business and targeted to customers world-wide, in the adult sector (i.e. classified as "high risk" by credit card processors, but 100% legal, nothing shady about it)
2) I'm a UK resident, and am trying to simplify reporting and optimise my taxes. I am -NOT- interested in money laundering or tax evasion.. I am only interested in 100% legal set-ups.
3) I am too early in the business to have enough volume to be able to justify getting an own merchant account, I instead am thinking of going with a CC processor like CCBill.
4) I will be in the need of a business bank account. As I will -not- pay myself or others an income from this side businesses, the access times are not that important, however, online-banking would be nice to keep track.
5) While it is a 100% legal business and 100% legal setup, as the nature is in adult entertainment, I would like to keep my name off the records for any online trolls (I do understand that my name would be revealed in legal cases, which is fine)
Here are my thoughts, please let me know what you think of each option and if you can recommend incorporating and tax advisors/banks to work with
Option a) Incorporate in British Virgin Islands as they have 0 tax, and, as I do not intend to pay myself an income/dividends, it would be the easiest thing for me to do, also they do not have other taxes/pass on taxes, and a very low burden of reporting. In case I want to change my mind and pay myself an income, I'd report it to tax authorities in the UK and pay the fair tax. However, I am wondering what would be a good bank to combine with the BVI.. have seen Isle of Man pop up in combination quite a few times, and was wondering if you have any insights on that or would recommend a different bank. Please make your case/suggestions for option a.
Option b) Incorporate in Delaware, pay a little bit corporate tax and deal with the financial reporting burden (their tax laws are a bit confusing and you have to deal with state and federal issues, sales tax and so forth). On the upside would be that it would be an American company, which maybe makes it easier on the banking and credit card processing side? I do not know if this is a big issue in the adult industry, but so far I have only found CCbill that is working in this field. And I do not know if credit card processors take issue with incorporating in a tax haven, even though every company does it (half of the world's revenue stream is going through tax havens, so it's a no-brainer). Please make your case/suggestions for option b.
Option c) Incorporate in Cyrpus -- this seems to be big on the board here, I guess because that's what you specialise in. However, downside for me would be the instabile tax situation. The corporate tax just increased from 10 to 12.5%, putting it on the same level as Ireland. And the sales tax also increased and now is 19%. While I do understand that you can always pass on costs to your clients, realistically it just means I am less competitive and also have to deal with the uncertainty in cyprus. The advantage of having a cyprus bank account and a cyprus company would enable me to probably go down the route of having a proper merchant account and do CC processing myself, but I am not there yet.. Coupled with the high costs of incorporating there, I am not really sure what a lot of people here see in it. So please make your case for Option c as well
Option d) Anything you might know works well in the business and circumstances I described
Thank you so much for your time. I really do appreciate it is a lenghty statement and questions/or request for thoughts, but it would help me a great deal.
Also happy to skype and walk you through my issues / but please only at this point if it is non-binding and without pushing a solution on to me, thank you.
Cheers
M
1) It's an online business and targeted to customers world-wide, in the adult sector (i.e. classified as "high risk" by credit card processors, but 100% legal, nothing shady about it)
2) I'm a UK resident, and am trying to simplify reporting and optimise my taxes. I am -NOT- interested in money laundering or tax evasion.. I am only interested in 100% legal set-ups.
3) I am too early in the business to have enough volume to be able to justify getting an own merchant account, I instead am thinking of going with a CC processor like CCBill.
4) I will be in the need of a business bank account. As I will -not- pay myself or others an income from this side businesses, the access times are not that important, however, online-banking would be nice to keep track.
5) While it is a 100% legal business and 100% legal setup, as the nature is in adult entertainment, I would like to keep my name off the records for any online trolls (I do understand that my name would be revealed in legal cases, which is fine)
Here are my thoughts, please let me know what you think of each option and if you can recommend incorporating and tax advisors/banks to work with
Option a) Incorporate in British Virgin Islands as they have 0 tax, and, as I do not intend to pay myself an income/dividends, it would be the easiest thing for me to do, also they do not have other taxes/pass on taxes, and a very low burden of reporting. In case I want to change my mind and pay myself an income, I'd report it to tax authorities in the UK and pay the fair tax. However, I am wondering what would be a good bank to combine with the BVI.. have seen Isle of Man pop up in combination quite a few times, and was wondering if you have any insights on that or would recommend a different bank. Please make your case/suggestions for option a.
Option b) Incorporate in Delaware, pay a little bit corporate tax and deal with the financial reporting burden (their tax laws are a bit confusing and you have to deal with state and federal issues, sales tax and so forth). On the upside would be that it would be an American company, which maybe makes it easier on the banking and credit card processing side? I do not know if this is a big issue in the adult industry, but so far I have only found CCbill that is working in this field. And I do not know if credit card processors take issue with incorporating in a tax haven, even though every company does it (half of the world's revenue stream is going through tax havens, so it's a no-brainer). Please make your case/suggestions for option b.
Option c) Incorporate in Cyrpus -- this seems to be big on the board here, I guess because that's what you specialise in. However, downside for me would be the instabile tax situation. The corporate tax just increased from 10 to 12.5%, putting it on the same level as Ireland. And the sales tax also increased and now is 19%. While I do understand that you can always pass on costs to your clients, realistically it just means I am less competitive and also have to deal with the uncertainty in cyprus. The advantage of having a cyprus bank account and a cyprus company would enable me to probably go down the route of having a proper merchant account and do CC processing myself, but I am not there yet.. Coupled with the high costs of incorporating there, I am not really sure what a lot of people here see in it. So please make your case for Option c as well
Option d) Anything you might know works well in the business and circumstances I described
Thank you so much for your time. I really do appreciate it is a lenghty statement and questions/or request for thoughts, but it would help me a great deal.
Also happy to skype and walk you through my issues / but please only at this point if it is non-binding and without pushing a solution on to me, thank you.
Cheers
M
