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avalon18

New member
Hi all -

We are setting up a Shopify shop to sell household goods in both markets. Two partners, one is based in the US and the other UK. We are looking for jurisdiction and type of entity with lower set up and maintenance cost, less compliance, lower taxes (including at the personal income tax level), easy to integrate into major e-commerce platforms (Shopify, Etsy, etc,) and payment systems. Would appreciate any advice regarding where we should incorporate our business. Right now we are evaluating US LLC vs UK LLP but would welcome any other suggestion.

Thanks,
 

Sols

Staff member
Mentor Group Gold
You're both going to be paying full taxes on your profits and salaries/dividends, so there's not much you can do about that.

For tax purposes, LLCs and LLPs are nearly identical so it doesn't make much of a difference what you pick. UK might be easier in terms of banking, payment processing, and VAT payments, but your partner in the US might run into issues with banking there if the company wants US bank account.

Have you considered incorporating in both countries and placing a holding company on top that you both control? It's more paperwork but it's a pretty common setup for these kinds of businesses.
 

avalon18

New member
Thank you. We have just started and want to keep the structure financially and administratively lean while validating our idea. If we are lucky enough to sustain and grow the business, we may consider doing the holding structure. How easy is it to restructure from one UK LLP to a holding company and one LLC/LLP in each country?
 

Sols

Staff member
Mentor Group Gold
It's hard to say. Depends on what you do exactly. Payment processors and banks will want to repeat KYC on you and the entire structure in case of ownership.

It doesn't have to be particularly painful but won't be as smooth as having the right setup from day 1.

If you want to keep things lean and simple, maybe consider forming the two separate companies and own them individually. Then merge under a holding company when doing so makes financial and operational sense.
 
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