Dubai Expat best Setup for Amazon FBA US/EU selling?

[troubled soul]

If Dubai expat want to sell stuff from china to USA/EU using amazon FBA program.
What will be the best solution for tax saving , as UAE and USA does not have any Tax treaty. Amazon will withhold the 30% of gross sell.
Any country will be fine ? Less headache and simple setup??

@Fred
ANy expert comments?

 

[Luxxxtino]

I'm in the exact situation in looking to set up a UAE structure - I've heard of multiple sellers using a HK corporate structure (no tax treaty with the US) and not having to deal with withheld sales by Amazon. Would appreciate if someone with such experience could weigh in

 

[JohnnyDoe]

Cyprus, US LLC, a free zone in the right place. Think about these elements and combine them. You can also throw into the equation some IP.
Sorry I can't provide more detail in public but I'm sure CyprusLawyer can help with one part of the equation.
And don't forget to be careful with Alibaba suppliers! You should better have a China agent to keep an eye on them.

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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields​

 

[KalasZX]

This is part of what I did with my Hong Kong company. It used to be possible to end up with zero tax this way, but took a lot of work to get there. I remember hearing something about the US-China tax treaty removing Amazon/Paypal zero withholding status from Hong Kong, Macau and Taiwan. Make sure there is still a way to do that before going forward with it.

Assuming you can still get to zero tax with a HK setup, it will be a constant struggle to maintain. Even though you aren't paying taxes in HK you still go through all of the paperwork, auditing, etc. etc. etc. as if you were. Technically speaking your zero tax status is reviewed every year and it will always be on you to prove that you don't owe taxes. In this aspect HK is no better than the US or EU. You will always end up getting bills for things you didn't know were legally required too. Whatever you think your fixed costs of owning the company will be, don't be surprised if it ends up being triple that every year. If you're doing less than US$30,000 in annual profit your total cost of doing business will be lower by setting up an offshore company somewhere cheap like BVI and eating the 30%,

While not zero tax, Russia still qualifies for 0% withholding from Amazon. Their corporate rate is 15% and you can effectively make that zero by sending money to companies you own in other countries. Something else to consider: you can get Russian citizenship from owning a company for 3 years, but will have to employ some Russians and pay some taxes to get there. Given the quality of the Russian passport it's a steal at twice the price.

 

[JohnnyDoe]

KalasZX said:
you can get Russian citizenship from owning a company for 3 years, but will have to employ some Russians and pay some taxes to get there.
Click to expand...

can you elaborate and possibly start a new thread on this?

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[KalasZX]

JohnnyDoe said:
can you elaborate and possibly start a new thread on this?
Click to expand...

It's not like it's a secret program that doesn't come up with a simple Google search. Most/all of the usual offshore suspects offer to handle the details for a(n im?)modest fee. If memory serves it's 10 million rubles invested, 10 employees, permanent residence after 1 year and citizenship after 3 if you have some basic Russian language ability. One would assume you'd learn some of the language by employing 10 Russians for 3 years. Coming from the perspective of a native English speaker that learned Japanese before learning Russian the hardest part is getting used to sounds letters make in the Cyrillic alphabet. From there it's just like Japanese kana, every letter makes the exact same sound every time. All of the Russian equivalents of "i before e except..." were eliminated by getting rid of unneeded letters about 100 years ago.

Do people really not know about this? I can start a different thread on it, from my perspective it just feels like starting a thread about being able to buy a passport from St. Kitts.

 

[JohnnyDoe]

KalasZX said:
It's not like it's a secret program that doesn't come up with a simple Google search. Most/all of the usual offshore suspects offer to handle the details for a(n im?)modest fee. If memory serves it's 10 million rubles invested, 10 employees, permanent residence after 1 year and citizenship after 3 if you have some basic Russian language ability. One would assume you'd learn some of the language by employing 10 Russians for 3 years. Coming from the perspective of a native English speaker that learned Japanese before learning Russian the hardest part is getting used to sounds letters make in the Cyrillic alphabet. From there it's just like Japanese kana, every letter makes the exact same sound every time. All of the Russian equivalents of "i before e except..." were eliminated by getting rid of unneeded letters about 100 years ago.
Click to expand...

Russian is not difficult, numbers are good and there's a lot of business to be done in Russia.

KalasZX said:
Do people really not know about this? I can start a different thread on it, from my perspective it just feels like starting a thread about being able to buy a passport from St. Kitts.
Click to expand...

It would be nice to hear from someone with direct experience.
A Russian passport is not a cheap passport from a small island (and eventually all those CIP passports will become useless/banned).

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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields​

 

[Luxxxtino]

azb1 said:
If Dubai expat want to sell stuff from china to USA/EU using amazon FBA program.
What will be the best solution for tax saving , as UAE and USA does not have any Tax treaty. Amazon will withhold the 30% of gross sell.
Any country will be fine ? Less headache and simple setup??

@Fred
ANy expert comments?
Click to expand...

Hi mate just wondering what you ended up going for here? Currently looking at using a UAE FZ company but slightly concerned about:

1) 30% withholding
2) Being able to set up a US-based bank account is Amazon doesn't accept UAE-based accounts.

Cheers

 

[Aria]

Luxxxtino said:
I'm in the exact situation in looking to set up a UAE structure - I've heard of multiple sellers using a HK corporate structure (no tax treaty with the US) and not having to deal with withheld sales by Amazon. Would appreciate if someone with such experience could weigh in
Click to expand...

. Hi My Friend.
. I hope you are well.
. Could you tell me which country did you set up your company?
. I live in the UK, England and I want to start selling on Amazon.uk fba, and then extend it to the amazon.us fba.
. Could you tell me where is best to set up my company for tax saving ?

KalasZX said:
This is part of what I did with my Hong Kong company. It used to be possible to end up with zero tax this way, but took a lot of work to get there. I remember hearing something about the US-China tax treaty removing Amazon/Paypal zero withholding status from Hong Kong, Macau and Taiwan. Make sure there is still a way to do that before going forward with it.

Assuming you can still get to zero tax with a HK setup, it will be a constant struggle to maintain. Even though you aren't paying taxes in HK you still go through all of the paperwork, auditing, etc. etc. etc. as if you were. Technically speaking your zero tax status is reviewed every year and it will always be on you to prove that you don't owe taxes. In this aspect HK is no better than the US or EU. You will always end up getting bills for things you didn't know were legally required too. Whatever you think your fixed costs of owning the company will be, don't be surprised if it ends up being triple that every year. If you're doing less than US$30,000 in annual profit your total cost of doing business will be lower by setting up an offshore company somewhere cheap like BVI and eating the 30%,

While not zero tax, Russia still qualifies for 0% withholding from Amazon. Their corporate rate is 15% and you can effectively make that zero by sending money to companies you own in other countries. Something else to consider: you can get Russian citizenship from owning a company for 3 years, but will have to employ some Russians and pay some taxes to get there. Given the quality of the Russian passport it's a steal at twice the price.
Click to expand...

. HI Kakals ZX.
. I hope you are well.
. Could you guide me please?
. I live in the UK,England and I want to start amazon.uk fba then extemd it to the amazon.us.
. Where should I set up my company , BVI or HK ?
. As you know that I also want to minimise tax paying.

Last edited: May 8, 2023

 

[Clank]

Luxxxtino said:
Hi mate just wondering what you ended up going for here? Currently looking at using a UAE FZ company but slightly concerned about:

1) 30% withholding
2) Being able to set up a US-based bank account is Amazon doesn't accept UAE-based accounts.

Cheers
Click to expand...

You can use Currenxie or Airwallex. They will give you US bank account details.

 

[Aria]

Luxxxtino said:
Hi mate just wondering what you ended up going for here? Currently looking at using a UAE FZ company but slightly concerned about:

1) 30% withholding
2) Being able to set up a US-based bank account is Amazon doesn't accept UAE-based accounts.

Cheers
Click to expand...

GOOD QUESTION luxxxtino.

I also wanna know that. I am also at the same situation of where should I set up my company

 

[12345]

No, I think you don't pay the 30 % witholding tax if you run Amazon FBA business from abroad, I educated myself and I read that (depending on your countires tax treaty) you need to have a permanent establishment in order to pay income tax in the us which is defined:

2. The term "permanent establishment" includes especially:
a) a place of management;
b) a branch;
c) an office;
d) a factory;
e) a workshop; and
f) a mine, an oil or gas well, a quarry, or any other place of extraction of natural
resources.

4. Notwithstanding the preceding provisions of this Article, the term "permanent
establishment" shall be deemed not to include:
a) the use of facilities solely for the purpose of storage, display or delivery of
goods or merchandise belonging to the enterprise;
b) the maintenance of a stock of goods or merchandise belonging to the enterprise
solely for the purpose of storage, display or delivery;
c) the maintenance of a stock of goods or merchandise belonging to the enterprise
solely for the purpose of processing by another enterprise;
d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise, or of collecting information, for the enterprise;
e) the maintenance of a fixed place of business solely for the purpose of carrying
on, for the enterprise, any other activity of a preparatory or auxiliary character;
f) the maintenance of a fixed place of business solely for any combination of the
activities mentioned in subparagraphs a) through e), provided that the overall activity
of the fixed place of business resulting from this combination is of a preparatory or
auxiliary character.