We're planning on founding an e-commerce based company, my co-founders and I are all based offshore, and we're planning on registering a Delaware LLC to enable USD payment, etc. I have come across some articles and YouTube views that suggest the US LLC be owned by another offshore corp, instead of us as individuals directly. Sometimes, they vaguely mention this is easier in terms of filing the requisite tax paperwork every year. Is this true? And if so, where should we register the offshore corp? We're considering HK since it has very favorable tax treatments.
Own Delaware LLC vs through offshore corp?
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When it is an offshore︀ corp (or any other single legal/natural person) as the sole member, the company is just︁ a disregarded entity and nothing more, therefore achieving the simplest possible tax filings you can︂ get in the US.
When you have multiple members of any type, it becomes a︃ partnership – still no US tax liability but an additional complication in tax returns.
HK is a good choice but you need to prove you paid tax somewhere else or︄ your jurisdiction of PE/CFC does not require you to pay taxes; otherwise you will be︅ liable for their 8.25-16.5% as usual. Also keep in mind that accounting is more expensive︆ than some other offshore jurisdictions and you need to pass an audit (albeit mostly a︇ formality) irrespective of income.
Something like BVI is fine but banking with a HK member︈ will probably be easier. You could try Singapore set up in an offshore way, i.e.,︉ you have no locally remitted funds and no locally conducted activity, in which case you︊ gain from its reputation without paying local taxes or (most likely) filing an audit.
When you have multiple members of any type, it becomes a︃ partnership – still no US tax liability but an additional complication in tax returns.
HK is a good choice but you need to prove you paid tax somewhere else or︄ your jurisdiction of PE/CFC does not require you to pay taxes; otherwise you will be︅ liable for their 8.25-16.5% as usual. Also keep in mind that accounting is more expensive︆ than some other offshore jurisdictions and you need to pass an audit (albeit mostly a︇ formality) irrespective of income.
Something like BVI is fine but banking with a HK member︈ will probably be easier. You could try Singapore set up in an offshore way, i.e.,︉ you have no locally remitted funds and no locally conducted activity, in which case you︊ gain from its reputation without paying local taxes or (most likely) filing an audit.
I would go for a HK over BVI because it is very difficult to setup a BVI company and there is not need to go through such complicated process when you can do it with ease with HK!
Be aware of ECI. The BPT could be a problem.
Are you sure? Don't they only exempt foreign income from tax?
Are you sure? Don't they only exempt foreign income from tax?
Unless he has staff in the US, it normally is not ETBUS.
No, he has no clue.
https://taxsummaries.pwc.com/gibraltar/corporate/taxes-on-corporate-income
"Companies are subject to Gibraltar taxation on income accrued in and derived from Gibraltar."
No, he has no clue.
https://taxsummaries.pwc.com/gibraltar/corporate/taxes-on-corporate-income
"Companies are subject to Gibraltar taxation on income accrued in and derived from Gibraltar."
He wrote it's an e-commerce business. Some people say there is increased risk of being ETBUS with Amazon FBA etc.
Done some more googling, it seems like something like that existed 20+ years ago:
https://www.gibraltaroffshore.com/exempt-company/
It seems like there is now a non-resident company instead, which sounds similar to how Singapore/Hong Kong treat companies:
https://www.gibraltaroffshore.com/gibraltarnonresidentcompany/
Done some more googling, it seems like something like that existed 20+ years ago:
https://www.gibraltaroffshore.com/exempt-company/
It seems like there is now a non-resident company instead, which sounds similar to how Singapore/Hong Kong treat companies:
https://www.gibraltaroffshore.com/gibraltarnonresidentcompany/
This concept was scrapped 20 years ago. According to what I found, taxation is now based on where the company is managed.
You could probably do business with people in Gibraltar and still not pay tax, as long as management isn't based in Gibraltar.
But then the question is - where is the company managed from?
You could probably do business with people in Gibraltar and still not pay tax, as long as management isn't based in Gibraltar.
But then the question is - where is the company managed from?
The rules are basically the same on Gibraltar as all over the globe, all depends on where the company is managed from and if the owner is sitting in a country where you have to pay high tax or just some taxes it makes not much sese unless there are other reasons.
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