Where to incorporate cheapest company for digital nomads?

[gymnopedist]

I was about to register a company in Wyoming, when I found out that I would be liable to filing IRS Form 5472, attached to a pro forma Form 1120, which implies getting USA tax identification numbers for both the company and myself (I am not from the USA and I dont think I will ever go there. Also, I dont need USA bank account and I don't want to deal with any USA institutions other than the state company registry and the registered agent). Amazingly, none of the dozens of USA incorporation/registered agent service providers I have seen online warns about this fact. Quite telling of the level of risk of doing business with USA entities IMO. You could find yourself with a fine in the hundreds of dollars if you ignore or are unaware of IRS filings.

So gone is the opportunity to have a company with a maintenance cost of 100 USD, no accounting, no tax and now I am looking for the next best deal.
I thought it would be Seychelles or Belize, with an annual government fee of 100 USD, meaning a potential annual cost below around 150 - 200 USD, but one needs to incorporate through agents and I haven't found any charging less than 400 USD per year. Any recommendation?

Singapore with a low annual government fee looked attractive, but the local director requirement seems to increase fees crazily. So the quotes I have got are a lot more expensive than Seychelles or Belize, plus Singapore has a public registry and nominee services cost above S$1000 yearly.

I don't mind where to incorporate. I just don't want to pay more than a 100 -200 USD to keep the company running and I don't want to have to be sending f***** letters like in the 15th century, or to disclose too much information (specially in public records) and be threatened with millionaire penalty fees by totalitarian regimes that can harass me worldwide.

 

[Mr Magoo]

You really are pushing it with 200USD / year. Belize will cost you around 600 USD a year including renewal, COGS + apostille and fedex to send it to you somewhere. Banks may ask you for financial statements though, although you have a Belize IBC.

 

[user9823671]

What are you trying to achieve?
Just have a company?
Avoid paying tax?
Keep your details private?

Will your business need a bank account? What payments will you need to receive (credit / debit / paypal).
If trying to pay lower taxes, do you understand all the complications that involves? If you move around constantly you can get away with (maybe I don't really know). Do you go back to your home country for any periods of time? do you understand that after that period your country can make a tax claim on your company as if it was incorporated in your home country.

Amazingly, none of the dozens of USA incorporation/registered agent service providers I have seen online warns about this fact

Of course not they want your business. They probably don't tell you that a yearly declaration needs to be made ( I forget which exactly) that will require a name of directory /shareholder, which kind of negates the point of not having a public register of ownership as these are publicly available.

You say you have found a Belize company for $400. No you haven't. There will be hidden charges, they will not provide you with everything that you most likely need. Be wary of cheap prices. If a site says you can pay 0% tax, be completely anonymous with (xyz) company and (abc) options, be very wary. It probably is not true.

 

[gymnopedist]

Thanks for replies.

You really are pushing it with 200USD / year. Belize will cost you around 600 USD a year including renewal, COGS + apostille and fedex to send it to you somewhere. Banks may ask you for financial statements though, although you have a Belize IBC.

For the simple activity I need a company for, 600 USD for limited liability and public registry avoidance is too much.
It seems UK companies could be a valid cheaper offshore option, for non UK residents. But if you were UK resident you could still use a non-UK resident nominee director to avoid dealing with corporate taxes (and accounting altogether), right?.
I might have forgotten how UK companies work but I'm thinking that 15 GBP annual return + 50 GBP virtual office anywhere in the UK + a nominee director and shareholder based anywhere except the UK could do.
I need to research this option. I don't know yet of any company offering non-residential nominee director/shareholder. It might not be cheap.

What are you trying to achieve?
Just have a company?
Avoid paying tax?
Keep your details private?

Will your business need a bank account? What payments will you need to receive (credit / debit / paypal).
If trying to pay lower taxes, do you understand all the complications that involves? If you move around constantly you can get away with (maybe I don't really know). Do you go back to your home country for any periods of time? do you understand that after that period your country can make a tax claim on your company as if it was incorporated in your home country.

I am trying to buy limited liability protection at the lowest price, avoiding appearing in public registries. I would not consider jurisdictions that tax offshore revenues because that requires accounting, increases complexity and expenses.
Also, I would like to accept visa/mastercard payments on a website. Payment processors might be a problem depending on what you are doing. I don't care about bank accounts since they are so expensive to get for offshore companies and payment processors do not always need them (still researching this atm).
EMIs will of course report to HMRC (most are based in the UK) which will then report to the country where I am resident, so I will pay personal income tax in the country I am resident. No problem.

I did not know that my country of residence could tax my company as if it was incorporated in my country of residence. That would be a s**t scenario that wouldn't surprise me it be taking place in the USA or China, but where else?

Of course not they want your business. They probably don't tell you that a yearly declaration needs to be made ( I forget which exactly) that will require a name of directory /shareholder, which kind of negates the point of not having a public register of ownership as these are publicly available.

Quite right. Not mentioning the Form 5472 might be excusable since it's quite new (I guess it takes some time to update websites ), but only one compnay mentioned that annual return filings include the name and address of manager (person filing) and Registered Agent services do not necessarily cover filing AR for you. None of the 6 or 7 companies I asked about this replied. So you get into the trouble of having liabilities with the most tyrannical government in the history of humanity just to hide your name from registries, but your name and address ends up in a public registry anyways. F*** that.

BTW, above I meant "hundreds of thousands of dollars". 10K the first year, 25K from the 2nd. 5 years unaware of the new IRS requirement and you have a 100K+ fine waiting for you.

 

[JimBeam]

Have you taken a look at Estonia (How to Start a Company in Estonia & EU | e-Residency ) ?

They are made for digital nomads and people doing online work...

 

[JohnLocke]

There are lot of threads about Estonia you want to have a look at.

https://www.offshorecorptalk.com/threads/estonia-e-resident-company-vs-freezone-uae.24079/https://www.offshorecorptalk.com/threads/estonia-e-residence.23205/https://www.offshorecorptalk.com/threads/about-estonian-e-residency.17292/

 

[Martin Everson]

I might have forgotten how UK companies work but I'm thinking that 15 GBP annual return + 50 GBP virtual office anywhere in the UK + a nominee director and shareholder based anywhere except the UK could do.

I gave a detailed breakdown of costs in this thread below for UK companies i.e £41 to setup and £42 annual running cost if you do accounting yourself.

https://www.offshorecorptalk.com/threads/countries-with-cheap-maintenance-fees.25940/post-97334
Nominee service will still require you to appear in controlling persons sections so offers no protection in UK unless you pay for an expensive trust setup.

 

[user9823671]

I did not know that my country of residence could tax my company as if it was incorporated in my country of residence. That would be a s**t scenario that wouldn't surprise me it be taking place in the USA or China, but where else?

You need to have a read of CFC laws. Pretty much effects the world, certainly all EU countries / all (most?)developed countries

https://en.wikipedia.org/wiki/Controlled_foreign_corporation

I might have forgotten how UK companies work but I'm thinking that 15 GBP annual return + 50 GBP virtual office anywhere in the UK + a nominee director and shareholder based anywhere except the UK could do.
I need to research this option. I don't know yet of any company offering non-residential nominee director/shareholder. It might not be cheap.

You do understand that with a nominee, anytime you need to do anything with your business that requires the nominee, you have to pay (and it is not cheap). Also (and I have been looking at UK LLP with nominees this week) to setup, you are charged a lot more than £15

I am trying to buy limited liability protection at the lowest price, avoiding appearing in public registries.

I have been look for something similar recently. Please take anything I write with a grain of salt, it is just my understandings after researching, so I may word things wrongly.
To avoid being on a public register:
1) you need to go offshore. Seychelles / Belize / Nevis etc. Cheap and simple. However, you will not get banking
2) Or use nominees. Cyrpress / Hong kong being the two main ones (but MUCH more expensive with more yearly requirements IIRC)
3) But as well a UK LLP allows nominees, which also allows 0% corporation tax to be paid, as it flows to the owner you and your income tax. Not sure how that works being a UK resident though, am fairly sure it works like that for non-UK-residents).

Honestly, you need to increase your budget, I don't think you will be able to do anything of what you stated as wanting to pay.

Also, I would like to accept visa/mastercard payments on a website. Payment processors might be a problem depending on what you are doing.

You want to process the cards yourself, you need a merchant account. Or you happy to let a processor do it for you? stripe / 2cho / or any of the other myriad of providers?
You would sign up to the payment processors as an invidual or as your company? They will want to know all about you, especially if from a dodgy offshore jurisdiction (passport, residency, address etc etc) as the UBO (ultimate business owner ). Or if using nominees, you will have to pay for the nominee to go through it all and create and sign more contracts that you have control - again a big (relative) expense.

I don't care about bank accounts since they are so expensive to get for offshore companies and payment processors do not always need them (still researching this atm).

How are you going to pay for servers? domain names, other business expenses without an account? From a personal account? I have no idea here, but would that affect your limited liability protection?
How will you get money out of the payment processor to you? Transfer to your personal account? Again, does this affect your protection?

EMIs will of course report to HMRC (most are based in the UK) which will then report to the country where I am resident, so I will pay personal income tax in the country I am resident. No problem.

All banks will report to the UK I believe due to TIEA tax agreements between countries that have you as an UBO. IF you were thinking about using nominees, with your stated budget, I imagine your revenue is not going to be too high, so I would plan for much backup if anyone comes knocking for such a small time account.

 

[user9823671]

Have you taken a look at Estonia (How to Start a Company in Estonia & EU | e-Residency ) ?

They are made for digital nomads and people doing online work...

op doesn't want to appear in public registers, that is no good for him

 

[user9823671]

Regarding losing your limited liability and not having a business bank account

Misuse of funds. If a business owner takes business funds for personal use, or if the owner commingles funds for his or her own gain. For example, if the owner has both business and personal funds in a personal checking account and doesn't clearly separate the two types of funds, this may result in misuse of the funds.

To me this sounds like, if you are paying for things from a personal account, you might be at risk of losing that protection

 

[fshore]

Regarding losing your limited liability and not having a business bank account



To me this sounds like, if you are paying for things from a personal account, you might be at risk of losing that protection

This quote appears to be from USA. Where would you be sued? If in the UK then the court will look at it differently, and generally not as strict with mixing personal funds as they are in the US.

 

[JohnLocke]

I don't mind where to incorporate. I just don't want to pay more than a 100 -200 USD to keep the company running and I don't want to have to be sending f***** letters like in the 15th century, or to disclose too much information (specially in public records) and be threatened with millionaire penalty fees by totalitarian regimes that can harass me worldwide.

This sounds to me a little strange. All comments in this thread are valid. However, what I don't understand is, if you only want to spend $200 per year to maintain the company and you don't want to risk anything, where do you expect to setup a company for such low a budget?

Furthermore, if you have a lot of money (or you expect to make) that you want to hide from someone why you go for such a low budget risking to get cought easely by anyone?

 

[user9823671]

This quote appears to be from USA. Where would you be sued? If in the UK then the court will look at it differently, and generally not as strict with mixing personal funds as they are in the US.

Are you sure? These things (in my experience) are always more complicated than assumed. Best to speak to a UK solicitor to find out *for sure*.

 

[blockchain4ever]

Regarding losing your limited liability and not having a business bank account



To me this sounds like, if you are paying for things from a personal account, you might be at risk of losing that protection

Clear separation is easy - just use two accounts. But I agree that you might be at risk. Though, if you use a company for tax optimization I don't think this is a big issue. If you use it as a legal shield, then definitively you're roast if you do this.

 

[blockchain4ever]

I gave a detailed breakdown of costs in this thread below for UK companies i.e £41 to setup and £42 annual running cost if you do accounting yourself.

https://www.offshorecorptalk.com/threads/countries-with-cheap-maintenance-fees.25940/post-97334
Nominee service will still require you to appear in controlling persons sections so offers no protection in UK unless you pay for an expensive trust setup.

Nice! I had forgotten that secretary services are not needed anymore in the UK!

 

[JohnLocke]

There are lots of cheap lawyser in the UK which would be happy to take ant case against a UK Ltd used as an legal shield for illegal activities.

 

[gymnopedist]

Have you taken a look at Estonia (How to Start a Company in Estonia & EU | e-Residency ) ?

They are made for digital nomads and people doing online work...

high cost and afair with public records

 

[gymnopedist]

I gave a detailed breakdown of costs in this thread below for UK companies i.e £41 to setup and £42 annual running cost if you do accounting yourself.

https://www.offshorecorptalk.com/threads/countries-with-cheap-maintenance-fees.25940/post-97334
Nominee service will still require you to appear in controlling persons sections so offers no protection in UK unless you pay for an expensive trust setup.

There have been a couple of changes to uk companies that make them less attractive.
There is a new filing requirement with corresponding fee: confirmation statement, and there is the PSC. No UK provider is going to offer nominee services unless they just want to rip you off. So the only option left to run a uk company protecting your id is to resort to offshore director nominees and lie about the PSC.
The foreseable problem with lying about the PSC is that the UK government is for sure going to start to verify IDs sooner or later, so you'll be forced to abandon your company.

 

[gymnopedist]

You need to have a read of CFC laws. Pretty much effects the world, certainly all EU countries / all (most?)developed countries

I guess it all boils down to tax information agreements. You could have as many companies as you like and if the tax authority of the country your companies are resident in do not know you, or you are able to claim to be resident in a tax free country, you will be left the f alone. But this is just getting more difficult with each iteration, so yes need to have the read.

You do understand that with a nominee, anytime you need to do anything with your business that requires the nominee, you have to pay (and it is not cheap). Also (and I have been looking at UK LLP with nominees this week) to setup, you are charged a lot more than £15

Yeah, as you said the problem is the outrageous prices. It shouldnt' be that expensive.

How are you going to pay for servers? domain names, other business expenses without an account? From a personal account? I have no idea here, but would that affect your limited liability protection?
How will you get money out of the payment processor to you? Transfer to your personal account? Again, does this affect your protection?

I do not see how paying for business expenses would undermine limited liability protection. If you managed to operate the company anonymously, sure you'd be fucking up your anonymity by taking expenses personally. But that's not what limited liability is. Anominity is a much more powerful protection and thus forbidden

All banks will report to the UK I believe due to TIEA tax agreements between countries that have you as an UBO. IF you were thinking about using nominees, with your stated budget, I imagine your revenue is not going to be too high, so I would plan for much backup if anyone comes knocking for such a small time account.

Are you assuming I am resident or citizen of the UK?. If you are from Eswatini and open a bank account in Laos, the UK will not be told. If you are Eswatini citizen resident of Andorra, the Laos bank will only report to Andorra, AFAIK.
As I understood it EMIs normally report directly to customer's country of residence (similarly to FATCA which is why many financial institutions kicked out US customers), but in the UK EMIs report to HMRC (and then HMRC reports to the relevant countries)

I have been look for something similar recently. Please take anything I write with a grain of salt, it is just my understandings after researching, so I may word things wrongly.
To avoid being on a public register:
1) you need to go offshore. Seychelles / Belize / Nevis etc. Cheap and simple. However, you will not get banking
2) Or use nominees. Cyrpress / Hong kong being the two main ones (but MUCH more expensive with more yearly requirements IIRC)
3) But as well a UK LLP allows nominees, which also allows 0% corporation tax to be paid, as it flows to the owner you and your income tax. Not sure how that works being a UK resident though, am fairly sure it works like that for non-UK-residents).

Honestly, you need to increase your budget, I don't think you will be able to do anything of what you stated as wanting to pay.

Belize looks as the best option, but somehow more expensive (even though gov fees are the same as Seychelles).
Seychelles has a few problems. I believe as soon as you create a compnay in Seychelles you are automatically reported to your country of residence and possibly also your country of citizenship. I have not been able to find reliable information about this. If true, this would be a case when opening a company automatically makes tax authority aware of you and reported. It's not the same in other jurisdictions (USA, UK, Canada,..).
So it sucks that in Seychelles I just don't know what's going on behind the scenes and the only way to be protected is to use nominees for everything. If on the other hand there was more clarity I could be OK with the reporting as long as they do not have public records. Unfortunately Seychelles is not the right place to be assured you won't end up in public records. Gov had plans to publish PSC records, retracted in the last moment but who knows what they might do in the future.

 

[user9823671]

I guess it all boils down to tax information agreements. You could have as many companies as you like and if the tax authority of the country your companies are resident in do not know you, or you are able to claim to be resident in a tax free country, you will be left the f alone. But this is just getting more difficult with each iteration, so yes need to have the read.

and depends on the level of risk you are happy with regards to being legal, and what happens if you ever get audited.
From my understanding, just opening a business isn't what gets you, it is the bank account. CRS means your resident country is informed.

Yeah, as you said the problem is the outrageous prices. It shouldnt' be that expensive.

Company formation companies are not out to help you out, they are out to make as much as possible from you. If you want nominees, they have you over a barrel. Whcih is why I think you see nominees pushed hard y less scrulpulous outfits, once you have a nominee they know you have no choice but to pay whenever you need anything from them.

if the tax authority of the country your companies are resident in do not know you, or you are able to claim to be resident in a tax free country, you will be left the f alone

that all depends on what countries feel they have a claim to residency of the company

Belize looks as the best option, but somehow more expensive (even though gov fees are the same as Seychelles).

Take a look at belize IBC / LLC changes that happened this year, they are trying to clean up their act somewhat