Where should I incorporate a Greyline business ?

[Yojimbo46]

Hello, I have a business in the style of sms-activate.org , it allow to rent sms for verification purpose to users. I started it for fun but now it's making money i don't know how to incorporate it so I protect myself and avoid futur problems. I'm living in France and it's not the right place for it.

The problem is that it's quite a shady business.
1) Usually users use this services to circumvent the security on websites and create many accounts and that potentially doesn't respect the term of use of the website.
2) it use real sim cards to rent activation sms to users. I don't know much about the regulation but I think this can be forbidden in some countries



My goal :
- Incorporate in offshore country
- Structure in a way i'm not responsible the way the sms are used
- Maybe Incorporate Anonymously

from my research the best is :

1) incorporate in UK ( because regulation for sim cards is quite good, it's the easiest country to buy sim cards ) *
2) structure the website as a Marketplace, i'm not the direct seller of the simcards. the seller of the simcard on the marketplace is responsible

Question:
- Can someone recommand a lawyer service to sort this out ?
- Should i stop the business as it's too risky for what it's worth ? I make 1500 euros / month of profit


Thank you very much , I'm stuck since several months with this question and I have not found solution

 

[Sols]

Yojimbo46 said:
1) Usually users use this services to circumvent the security on websites and create many accounts and that potentially doesn't respect the term of use of the website.
Click to expand...

This is probably not really your concern. Just make sure your terms of service stipulate that the SMS verification should only be used for legal purposes and in a way that does not violate the terms of service of other websites and services. Absolve yourself of liability and shift responsibility to your customers.

Would be good if you have a way to ban malicious users.

Yojimbo46 said:
2) it use real sim cards to rent activation sms to users. I don't know much about the regulation but I think this can be forbidden in some countries
Click to expand...

The world is full of places with strange and unusual laws, but I think by and large, what you're doing isn't illegal. Would be interesting to see legal opinions on it.

It might violate the terms of service of phone companies and of websites that people use your service to verify their accounts on.

Yojimbo46 said:
1) incorporate in UK ( because regulation for sim cards is quite good, it's the easiest country to buy sim cards ) *
2) structure the website as a Marketplace, i'm not the direct seller of the simcards. the seller of the simcard on the marketplace is responsible
Click to expand...

Probably fine. But if you are a marketplace that holds money on behalf of sellers (you take money from buyer, hold it, and give it to the seller), it might be considered a financial service and require a license. In reality, almost no one is going to care about it if you're just a smalltime operation.

A US LLC may be worth looking into. Strong limitation of liability and better privacy than a UK company.

Yojimbo46 said:
- Should i stop the business as it's too risky for what it's worth ? I make 1500 euros / month of profit
Click to expand...

That sounds like a nice side hustle for yourself but you're nowhere near the size where an international structure makes financial sense. Forming a company in the UK as a French resident can be complicated for tax purposes.

I don't think you're at any significant risk of prosecution. You might receive a subpoena/court order to disclose details about who paid for what when and it's in your best interest to be able to comply with such requests.

Phone operators might sue you but even that's unlikely. They make money on your business and as long as their phone numbers don't end up on spam lists or otherwise hurt their business (number chunks getting blocked), I doubt they'll care.

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This is the probably the answer to your question.

 

[bonox]

You should wait to grow your business in meantime, once big enough 30 - 40K euro month profit you can go offshore with your business.

 

[Yojimbo46]

Thank you very much for your answers.

bonox said:
You should wait to grow your business in meantime, once big enough 30 - 40K euro month profit you can go offshore with your business.
Click to expand...

I don't know how much time it will takes to reach such a critical revenue.
Meanwhile i need to setup a minimum the business .

Sols said:
This is probably not really your concern. Just make sure your terms of service stipulate that the SMS verification should only be used for legal purposes and in a way that does not violate the terms of service of other websites and services. Absolve yourself of liability and shift responsibility to your customers.

Would be good if you have a way to ban malicious users.


The world is full of places with strange and unusual laws, but I think by and large, what you're doing isn't illegal. Would be interesting to see legal opinions on it.

It might violate the terms of service of phone companies and of websites that people use your service to verify their accounts on.


Probably fine. But if you are a marketplace that holds money on behalf of sellers (you take money from buyer, hold it, and give it to the seller), it might be considered a financial service and require a license. In reality, almost no one is going to care about it if you're just a smalltime operation.

A US LLC may be worth looking into. Strong limitation of liability and better privacy than a UK company.


That sounds like a nice side hustle for yourself but you're nowhere near the size where an international structure makes financial sense. Forming a company in the UK as a French resident can be complicated for tax purposes.

I don't think you're at any significant risk of prosecution. You might receive a subpoena/court order to disclose details about who paid for what when and it's in your best interest to be able to comply with such requests.

Phone operators might sue you but even that's unlikely. They make money on your business and as long as their phone numbers don't end up on spam lists or otherwise hurt their business (number chunks getting blocked), I doubt they'll care.
Click to expand...

Ok it's good that it doesn't look that suspicious and the risk is not to high.


I could use a stealth paypal account to receive payment for credit cards / paypal and use P2P to cashout as crypto .
The main downside is that people easily do paypal dispute.

Does someone propose a setup with a propper payment gateway, cashout in crypto that doesn't require me to incorporate the business ?

 

[Gediminas]

Yojimbo46 said:
Hello, I have a business in the style of sms-activate.org , it allow to rent sms for verification purpose to users. I started it for fun but now it's making money i don't know how to incorporate it so I protect myself and avoid futur problems. I'm living in France and it's not the right place for it.

The problem is that it's quite a shady business.
1) Usually users use this services to circumvent the security on websites and create many accounts and that potentially doesn't respect the term of use of the website.
2) it use real sim cards to rent activation sms to users. I don't know much about the regulation but I think this can be forbidden in some countries



My goal :
- Incorporate in offshore country
- Structure in a way i'm not responsible the way the sms are used
- Maybe Incorporate Anonymously

from my research the best is :

1) incorporate in UK ( because regulation for sim cards is quite good, it's the easiest country to buy sim cards ) *
2) structure the website as a Marketplace, i'm not the direct seller of the simcards. the seller of the simcard on the marketplace is responsible

Question:
- Can someone recommand a lawyer service to sort this out ?
- Should i stop the business as it's too risky for what it's worth ? I make 1500 euros / month of profit


Thank you very much , I'm stuck since several months with this question and I have not found solution
Click to expand...

Hey,

So basically you have few options, either to do short legal research and find a place in the EU / UK to set up a company or to set up offshore in low regulated area.

Offshore might give better privacy and limit some possible exposures. But it might cause other issues (anti-tax avoidance rules in FR, banking questions).

It is hard to comment from the legal side without knowing the details, but generally, the fact that your services allow your customers to breach the terms of private companies (websites) does not make them illegal.

We worked extensively with these questions for affiliate marketing where they breach Facebook's policies. Also with proxy and VPN services.

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