Hong Kong Ltd VS US Ltd VS UK Ltd

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banafinfodafuggiano

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Alright fellas, I'm about to open a HK Ltd since the income my business receive is 100% offshore.
My HK accountant say there should be no problem getting the Tax exemption, and it's costing me approx 750 USD a month all included (auditing, book keeping, etc).
This is twice cheaper than just my accounting in Canada, plus there would be no taxes.

I also heard US LLCs and UK Ltds can be tax free, however, it looks like there are zero banking opportunities for non-residents,

can someone confirm all my statements above are true?

Also, can you purchase non-business related assets with the HK company such as vehicles, cars, houses, gold, crypto , etc or it's not possible?
 
US and UK are tax transparent. HK is opaque. But the main question here will be: where is your company effectively managed from? If you live in Canada and manage the company from Canada, it is taxable in Canada.
 
750 usd a month seemed very expensive? Is that including the free for the one time offshore tax status handling?


daniels27 said:
daniels27 said:
UK are tax transparent
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UK Ltd are not tax transparent, maybe you're thinking of llp?
banafinfodafuggiano said:
banafinfodafuggiano said:
Also, can you purchase non-business related assets with the HK company such as vehicles, cars, houses, gold, crypto , etc or it's not possible?
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You can, but then it's a business asset.
 
A UK LTD is not tax transparent, it's just that one can easily transfer its tax residence elsewhere, which may or may not have the same effect in practice.
 
Yes, sorry. UK LTD is not tax transparent. Also the US LLC can be set up opaque.

Nevertheless, you have the problem with the place of effective management and your opaque company may (will) then be taxed in Canada.

Buying assets with the company is always possible. If you buy them for investment, there is no issue with it as long as you don't use it personally in any way. If you buy them to use. most likely, you then have to pay tax on the benefits of a free rental car in Canada as salary etc.

Also note that dividends from your company will be most likely be taxable in your country of residence (check the law).
 
banafinfodafuggiano said:
banafinfodafuggiano said:
I also heard US LLCs and UK Ltds can be tax free, however, it looks like there are zero banking opportunities for non-residents,
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I wouldn't say there are ZERO banking opportunities for non residents, especially with US LLC.

The point here is you overlooked to tell who will be running the business and where will you be tax resident.
 
Marzio said:
Marzio said:
I wouldn't say there are ZERO banking opportunities for non residents, especially with US LLC.
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There are enough. Even more if you buy Gold Mentor and check there.

Marzio said:
Marzio said:
The point here is you overlooked to tell who will be running the business and where will you be tax resident.
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Come on. We all know him. He is paying taxes in Canada and does not want to pay them.
 
daniels27 said:
daniels27 said:
Come on. We all know him. He is paying taxes in Canada and does not want to pay them.
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Bananafudgio is a local celebrity here.

banafinfodafuggiano said:
banafinfodafuggiano said:
Alright fellas, I'm about to open a HK Ltd since the income my business receive is 100% offshore.
My HK accountant say there should be no problem getting the Tax exemption, and it's costing me approx 750 USD a month all included (auditing, book keeping, etc).
This is twice cheaper than just my accounting in Canada, plus there would be no taxes.
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Given the previously stated size of your business, 750 USD/month for an all inclusive package is a pretty good deal in Hong Kong.

banafinfodafuggiano said:
banafinfodafuggiano said:
I also heard US LLCs and UK Ltds can be tax free, however, it looks like there are zero banking opportunities for non-residents,
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Yes, they can be tax free under US and UK law. Both are taxable in Canada, though.

banafinfodafuggiano said:
banafinfodafuggiano said:
Also, can you purchase non-business related assets with the HK company such as vehicles, cars, houses, gold, crypto , etc or it's not possible?
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Yes, but it becomes a taxable benefit if it's not actually a valid, genuine, bonafide company expense. Hong Kong is relaxed about a lot of things. Fraud is not one of them.

So the answer is probably no in your case.

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This is the probably the answer to your question.
 
daniels27 said:
daniels27 said:
Yes, sorry. UK LTD is not tax transparent. Also the US LLC can be set up opaque.

Nevertheless, you have the problem with the place of effective management and your opaque company may (will) then be taxed in Canada.

Buying assets with the company is always possible. If you buy them for investment, there is no issue with it as long as you don't use it personally in any way. If you buy them to use. most likely, you then have to pay tax on the benefits of a free rental car in Canada as salary etc.

Also note that dividends from your company will be most likely be taxable in your country of residence (check the law).
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I will soon be a resident of a 0% Tax country / or a country that doesn't tax foreign dividends. I'm already out of Canada. Unfortunately my ecom stores payment gateways are only compatible with HK companies, Ireland, Canada, etc... Neither US LLCs for non residents and neither UAE companies, but I can be a tax resident of the UAE for example and run a HK company which doesn't tax dividends. It's a decent set up the only problem is that everything is a bit vague with Hong Kong accountants in terms of fees. 750 USD a month includes everything yes, of course there will be extra payments eventually but it's half of what I paid in Canada to remain compliant with my Taxes (insane).

Sols said:
Sols said:
Bananafudgio is a local celebrity here.


Given the previously stated size of your business, 750 USD/month for an all inclusive package is a pretty good deal in Hong Kong.


Yes, they can be tax free under US and UK law. Both are taxable in Canada, though.


Yes, but it becomes a taxable benefit if it's not actually a valid, genuine, bonafide company expense. Hong Kong is relaxed about a lot of things. Fraud is not one of them.

So the answer is probably no in your case.
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Marzio said:
Marzio said:
I wouldn't say there are ZERO banking opportunities for non residents, especially with US LLC.

The point here is you overlooked to tell who will be running the business and where will you be tax resident.
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Any name other than Mercury? What other EMIs or banks allow non residents to open business accounts for US LLCs? Also I heard Stripe shuts down many accounts...

Last edited: Apr 21, 2024
 
What about Wise, don't they accept US LLC's ?

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banafinfodafuggiano said:
banafinfodafuggiano said:
I can be a tax resident of the UAE for example and run a HK company which doesn't tax dividends.
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By doing so your HK company will become taxable in UAE and if you say to UAE "hey i'm only a passive investor here because the business is run from HK" then you'll pay taxes in HK because income will be local sourced.

To be tax exempt in HK work needs to be performed outside HK.

Unless you become HK tax resident and live like a nomad by constantly moving so that you'll never become tax resident in any outher country, you'll pay taxes somewhere.
 
banafinfodafuggiano said:
banafinfodafuggiano said:
I will soon be a resident of a 0% Tax country / or a country that doesn't tax foreign dividends. I'm already out of Canada. Unfortunately my ecom stores payment gateways are only compatible with HK companies, Ireland, Canada, etc... Neither US LLCs for non residents and neither UAE companies, but I can be a tax resident of the UAE for example and run a HK company which doesn't tax dividends. It's a decent set up the only problem is that everything is a bit vague with Hong Kong accountants in terms of fees. 750 USD a month includes everything yes, of course there will be extra payments eventually but it's half of what I paid in Canada to remain compliant with my Taxes (insane).




Any name other than Mercury? What other EMIs or banks allow non residents to open business accounts for US LLCs? Also I heard Stripe shuts down many accounts...
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There is a whole thread about that, someone tried to open accounts for his US LLC at 18 EMIs: I tried opening a US business account in 18 EMIs, here's the result

Basically I think the conclusion was that the following non-US EMIs work: Airwallex, Zen, Wise, Verifo, and depending on your place of residence Revolut.

And then there are many US banks and EMIs that accept non-residents, the most popular being Mercury and Relay.

Finally, there are EMIs specialised in accepting businesses that dont get accepted elsewhere, but they unsurprisingly charge much higher fees.
 
Cloudbanck said:
Cloudbanck said:
There is a whole thread about that, someone tried to open accounts for his US LLC at 18 EMIs: I tried opening a US business account in 18 EMIs, here's the result

Basically I think the conclusion was that the following non-US EMIs work: Airwallex, Zen, Wise, Verifo, and depending on your place of residence Revolut.

And then there are many US banks and EMIs that accept non-residents, the most popular being Mercury and Relay.

Finally, there are EMIs specialised in accepting businesses that dont get accepted elsewhere, but they unsurprisingly charge much higher fees.
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What a fail that guy, he literally couldn't get more than 2-3 EMIs for his US LLC

I guess Hong Kong is still the number one choice. UAE would be first but the multi currency bank accounts available and payment gateways are very limited.

My customers are from outside the USA but I have 1-2 clients each year who pay me $70K grand in profit each and that live in the USA, I guess this will cause Taxation issues if running these payments through a US LLC?

Last edited: Apr 21, 2024
 
If you are a real Canadian, you may want to invest some money into a TN visa and get a SSN. It will open many banking doors to you and your company in the US.
 
banafinfodafuggiano said:
banafinfodafuggiano said:
Even tho I'm not a resident of the US?
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Yes, they didn't even ask where I live, just the company.
banafinfodafuggiano said:
banafinfodafuggiano said:
My customers are from outside the USA but I have 1-2 clients each year who pay me $70K grand in profit each and that live in the USA, I guess this will cause Taxation issues if running these payments through a US LLC?
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A US LLC is disregarded by default, meaning you pay the same taxes as if you didn't sell through the LLC.
 
banafinfodafuggiano said:
banafinfodafuggiano said:
What a fail that guy, he literally couldn't get more than 2-3 EMIs for his US LLC
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Come on, be respectful to him. It is not his fault, it is the regulation which was set up because of idiots who scammed and cheated earlier.

banafinfodafuggiano said:
banafinfodafuggiano said:
My customers are from outside the USA but I have 1-2 clients each year who pay me $70K grand in profit each and that live in the USA, I guess this will cause Taxation issues if running these payments through a US LLC?
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For services? No, it won't trigger any tax issues. For products, there are debates but I would not worry.

Xshore said:
Xshore said:
Yes, they didn't even ask where I live, just the company.
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Yes. It is US, they normally do not ask. But do you have a SSN? If you do not have a SSN, many banks may be less inclined to open an account for your company. Once you have a SSN, most banks just consider you resident and all issues are solved.
 
daniels27 said:
daniels27 said:
Yes. It is US, they normally do not ask. But do you have a SSN? If you do not have a SSN, many banks may be less inclined to open an account for your company. Once you have a SSN, most banks just consider you resident and all issues are solved.
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No ssn or itin, just ein. BoA wanted an itin or ssn, WF didn't.
 
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