E-Commerce company structure for minimal tax

[CP9931]

Hello!

I am looking for some recommendations on an effective structure to lower total effective taxes.
I am currently in the process of cutting ties with Canada and open to relocating (mostly) anywhere. I do have a preference on Malaysia due to the low cost of living and close proximity to the rest of South Asia.

I was originally looking to setup a Labuan company and meet the substance requirements in order to take advantage of the 3% CIT and 0% Dividends. However, from the looks of it, e-commerce does not seem to fall under the approved categories to take advantage of the 3% rate.

Would setting up a company elsewhere with a low CIT, then paying dividends to myself in Malaysia at a 0% rate be something that can work?

Any other suggestions or recommendations are greatly appreciated.

Cheers

 

[12345]

USA LLC
You pay no CIT in the US as long as there is no permanent establishment in the US (check your tax treaty with the US of your new country of residence though, at least that's how it works with EU countries)

 

[Marzio]

CP9931 said:
paying dividends to myself in Malaysia at a 0% rate
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Be aware that starting 2026 foreign sourced income brought into Malaysia will be taxed.

Somebody reported that under MM2H foreign sourced income will still be tax free but it has to be confirmed and remember things could always change for the worst so have a plan B ready.

 

[dirtyharry]

Marzio said:
plan B ready.
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What would a plan B look like in your opinion if you know that ?

 

[Marzio]

I would probably say Dominican Republic or Philippines since he said he wants to be in SEA area.

I would always look for places with favorable tax treaties with your home country first.

 

[TheCryptoAnt]

Marzio said:
Be aware that starting 2026 foreign sourced income brought into Malaysia will be taxed.
Click to expand...

Theres no CGT in Malaysia tho, only for RE (in Malaysia)

 

[daniels27]

Singapore offshore company could work. Then you need to fly under the radar or keep travelling in SEA.

More permanent alternatives would be any of the SEA countries like Idonesia, Taiwan, etc. with about 3% personal income if done properly. If you know which country you prefer, check with a local lawyer doing expats. They normally know the holes.

 

[Marzio]

RE = resident evil?

daniels27 said:
Singapore offshore company could work.
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Isn't the US LLC easier to form and manage than a SG offshore company?

Do you need to hire a nominee director for the SG company?

 

[12345]

USA llc way easier and cheaper than sg company
Sg you are required to do accounting in Singapore and prepare annual financial report. That results in high cost because of high salary of accountant in sg

 

[daniels27]

US LLC profits are personal income in tnt country you live. SG if a company where you can accumulate money and pay out dividends. The cost for a SG company isn't more than 3k per year.

 

[Marzio]

daniels27 said:
US LLC profits are personal income in tnt country you live.
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This is true if the residency country sees US LLC as transparent and not all countries do, UK for example sees US LLC as opaque entity.

I don't see MY going after MM2Hs for triggering PE in Malaysia, especially for solopreneur nomads.

 

[dirtyharry]

daniels27 said:
US LLC profits are personal income in tnt country you live. SG if a company where you can accumulate money and pay out dividends. The cost for a SG company isn't more than 3k per year.
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but you must appoint a nominee director and maybe shareholder too ?

 

[Billybob69]

Marzio said:
This is true if the residency country sees US LLC as transparent and not all countries do, UK for example sees US LLC as opaque entity.

I don't see MY going after MM2Hs for triggering PE in Malaysia, especially for solopreneur nomads.
Click to expand...

But you would need some director elsewhere for the UK to not tax a US LLC right?

 

[JackAlabama]

CP9931 said:
Hello!

I am looking for some recommendations on an effective structure to lower total effective taxes.
I am currently in the process of cutting ties with Canada and open to relocating (mostly) anywhere. I do have a preference on Malaysia due to the low cost of living and close proximity to the rest of South Asia.

I was originally looking to setup a Labuan company and meet the substance requirements in order to take advantage of the 3% CIT and 0% Dividends. However, from the looks of it, e-commerce does not seem to fall under the approved categories to take advantage of the 3% rate.

Would setting up a company elsewhere with a low CIT, then paying dividends to myself in Malaysia at a 0% rate be something that can work?

Any other suggestions or recommendations are greatly appreciated.

Cheers
Click to expand...

the thing with labuan is, theres almost like 0% available info.

 

[Marzio]

Billybob69 said:
But you would need some director elsewhere for the UK to not tax a US LLC right?
Click to expand...

It was just an example but even with a director in Bermuda, the US LLC owned by a UK resident would probably fall into CFC rules.

 

[pesto]

So there is no workaround to avoid the CFC rules with nominees any longer with a US LLC ?

 

[daniels27]

pesto said:
So there is no workaround to avoid the CFC rules with nominees any longer with a US LLC ?
Click to expand...

It is not just CFC rules. Even places like Switzerland and Hong Kong deem locally managed company to be a local company. You could use directors in another jurisdiction to get around it, but it is still subject to the country not investigating too much.

 

[pesto]

Okay now I get it, sorry.

 

[maxmoney]

CP9931 said:
Would setting up a company elsewhere with a low CIT, then paying dividends to myself in Malaysia at a 0% rate be something that can work?
Click to expand...

anyone knows if that really works in his situation ?

 

[GPT]

E-commerce you say, dont forget to comply with Europes draconian OSS scheme.
https://vat-one-stop-shop.ec.europa.eu/one-stop-shop_enPer 2025 there are some changes again.