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loxs

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Jul 27, 2018
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Hi I am a Bulgarian national and resident and I'm working on a software product that I intend to turn into a (small) business. Depending on how it turns out, it might even be only a "side project", and I might also do some software consulting using the company.

I don't think I want to avoid paying taxes - both company and personal, but I want to reduce the amount of pain and suffering as much as possible.

So here is my situation, I'd be grateful if you advise me on where to incorporate and what services to use.

Here are the cons of forming a Bulgarian company. If I don't find a jurisdiction that sufficiently solves most of these problems, I'll incorporate in Bulgaria:

1. If I receive even one cent from abroad, I have to obtain a VAT number, which means that I have to fill monthly tax reports and pay an accountant monthly (government requires reports to be signed by a licensed accountant). Although this can be done quite cheaply, I might get harassed by the "Bulgarian IRS" for small omissions etc. If I want to have "smooth sailing" I need to pay to a "reputable" accounting firm, which means something like 200-250 EUR per month. This is a bit steep for a company that may have very small income initially.

2. I have to pay a salary to the "company manager" monthly, no matter what. This includes social security, taxes etc. and the minimum is about 400 EUR a month (from which the government will take about half). There are ways to mitigate this, if I have another job, or if I nominate a manager someone who has another job (I can do that, as I have friends here etc) but I don't want to have to deal with this s*t.

3. The "easy" payment providers like Stripe don't work with Bulgarian companies.

4. If I decide to close the company, the process is painful - I need to fill empty tax reports for 2 years.


So I started researching and I am quite lost. I talked to Laveco (they have an office here) and they can create companies in lots of locations but (as already written on this forum) they have no idea (or care about) online businesses. I will still use them (as I have mutual friends etc. with people who work there) for the formation, but they are no good in helping me choose.

So what would be a good jurisdiction for incorporation? I don't mind reporting and paying some personal tax (on dividends maybe) once a year in Bulgaria.

I was thinking about two alternatives, could anyone please tell me about the tradeoffs if I choose any of these. And of course I'm open to other alternatives.

1. Delaware - I don't know if I want to take all the risks of dealing with the IRS. And because I don't plan on taking outside investment, I don't think I'll gain a lot from this

2. Hong Kong - I don't understand how often do I need to fill tax reports and how much will it cost me to have someone do it for me. Can I do them on my own?


Please note that I don't mind paying 2-3 thousand dollars a year (as this seems about the cost of having an offshore company), I just don't want to have to deal with stupid problems as much as possible.
 
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Let me ask something! Bulgaria is part of the EU what's the problem to find a EU payment processor?
4. If I decide to close the company, the process is painful - I need to fill empty tax reports for 2 years.
setup a Cyprus company which is easy to open AND CLOSE! painless process and no one will ask questions later on!
 
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