US LLC or UK LTD for a mobile games publisher?

[tom0159]

Hi guys,

We are looking for a low-tax jurisdiction for our new business. We are a mobile games publisher (we create games and publish them on Google Play/ Apple app store) and we need to collect revenue from ads placed inside the games.
Here are a few facts about us that may help to get the best advice:
- We will receive money from different advertising companies (based in EU, US and Asia)
- The shareholders are EU based persons
- We don't want nominees

We are looking at an US LLC (Delaware, Wyoming, New Mexico) or at an UK Ltd, we want facile access to banking services but still we want to keep taxes low.
What's your suggestion for those needs?
Thanks a lot!

 

[JustAnotherNomad]

- The shareholders are EU based persons

It will be very difficult/expensive to save taxes legally then. You would have to prove that the company has substance, i.e. is actually run from where it is incorporated, has a local office, local employees and so on. You can’t just register a company in a country with low taxes and expect not to pay taxes where your physical butt is sitting. And even with substance, you may still have to pay taxes in your home country due to CFC rules.
If you’re not willing to move to a different country, you might be best off just talking to some accountants in your home country about existing loopholes.

 

[tom0159]

I totally understand you, let's assume that the shareholders are nomads, but with their mailing address in EU (and EU passports).
Which will be the best option?

 

[CaptK]

Easiest way is to move to another country which is more tax friendly.

Your gonna have to suffer the tax to begin with. Establish yourself first, expense everything and don't forget you can claim back for equipment and any loans you have personally made to the company.

Look into what relief start ups get and depending on your status in the UK you can get entrepreneur relief.

 

[JustAnotherNomad]

I totally understand you, let's assume that the shareholders are nomads, but with their mailing address in EU (and EU passports).
Which will be the best option?

Mailing addresses shouldn’t matter if you can really prove that you have cut all ties with the country from a tax perspective. But this is up to the country to decide, so “EU” is too general to answer. You should talk to a tax lawyer to make sure you can’t be taxed in your home countries anymore. A mailing address usually shouldn’t make any difference. But it’s generally a good idea to get some sort of official residency address even as a nomad, to avoid questions.

Estonia could be a good choice if you really aren’t managing the company from your home country - and probably even if you are, if you are located in different countries.
Estonia only taxes profit distributions, so if you either reinvest into the company or take out money in the form of salaries or service invoices, there is no tax, and accounting is said to be quite simple.
You can also do everything online through their e-residency program.

 

[JustAnotherNomad]

don't forget you can claim back for equipment and any loans you have personally made to the company.

Thin capitalization and transfer pricing rules could set some limits to what you can claim back in the form of interest.