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HK or USA LLC for a bulgarian resident ?

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baliz71

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Jan 31, 2019
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Hello,

I have a small question. I have a company in Bulgaria where I am a tax resident, I am in ecommerce dropshipping field. In order to have more flexibility, more banking options etc, I am considering opening a company in HK or in the USA for my business, but I can't decide which is more interesting for me.

What I'm looking for :
- Simplified accounting
- Easy to set up and maintain without too much bureaucracy
- A reliable option for a Bulgarian resident that won't pose any problems for the Bulgarian authorities.
- Robust banking and payment processors

So, HK or USA ?

Thank you for your help!
 
HK pretty much does not fit any of this. They have annual audits, need a‌ secretary and have expensive payment processors. On top of that you are not sure wehther‍ they will accept your tax-free claim.

US does fit may of this. But for the⁠ payment processor part, they are mainly only useful for US sales. Fees are much more⁤ than what you get in Europe.

And for the Bulgarian point, both companies need to⁣ be registered in Bulgaria and you need to pay taxes in Bulgaria.

In your case,⁢ most likely a company in a EU country would be of more benefit to get︀ better deals on banking and payment. You can then apply for a tax ruling and︁ will only be taxed in Bulgaria.
 
Your best bet is to use a Bulgarian company, you can open bank accounts in‌ Bulgaria or other EU countries.

By opening a company abroad you still need to pay‍ taxes in Bulgaria.
 
Yes, i know i need to pay taxes in Bulgaria, this is not a problem‌ for me;
The more interesting point is mostly in paiement processors, for example in HK‍ you can get Oceanpay, useepay, that provide more local paiement processors than stripe for example,⁠ wich can be useful for me. So in the same time, if everything can be⁤ simplified, it can be a good deal for me 😛
 
Where are your customers located?

Having a HK payment processor for EU clients does not make⁣ any sense in most cases. Likewise, having a US LLC for HK clients also makes⁢ no sense.
 
Mostly in Latam, europe, and Worldwide.
I plan to keep maybe the Bulgarian company for‌ Europe, and the HK or US LLC for worlwide
 
You will only add more work for yourself. What is it that you can't do‌ with your Bulgarian company? Why do you need other payment processors so badly? What is‍ it that e.g. Stripe can't do?
 
First, the accounting part, i like the fact that the accounting part is outside Europe,‌ so bulgarian tax have nothing to ask me related to my company. Then, the paiement‍ processors, Stripe don't have lot of local paiement processors for Latam for example, with HK,⁠ you can get access to Mercadopago, Oxxo, and so on, very popular here. Also easy⁤ access to klarna too for example.
 
Like the gentleman's already clarified, you have to relocate if you want to avoid the‌ Bulgarian tax office to get off you. Since you are an EU citizen, you will‍ be taxed where you live unless you build massive substance in another country for your⁠ company and can keep it secret that you own another company outside Bulgaria.
 
Yes, the idea is not to be "secret" , i will declare it, the taxation‌ in bulgaria is "OK" - i just need more paiement processors (like oxxo, mercadopago, klarna,‍ etc) i contacted already airwallex, and ayden and got rejected. HK have some processors with⁠ account manager that can facilitate the process for example (via oceanpayment, useepay...)
A bonus can⁤ be also the accounting less strict than in Bulgaria, and to have something out of⁣ bulgaria too 🙂
 
I doubt you will be able to avoid the accounting. You will have to do‌ accounting both in the other country AND in Bulgaria, so it's just extra work, like‍ I said.
And I wouldn't be sure you will be able to get access to⁠ payment providers, they usually want to see some substance in the other country (office etc.).⁤
 
What you could do is register your Bulgarian company in Hong Kong and then get‌ those. You still will have to do file with IRD actually but without the need‍ for an audit.
 
thats not a⁣ bonus as long as you live in Bulgaria, they can simply ask you to do⁢ the things you are not required to do by HK since they gonna treat it︀ like a local business.
 
Nope, bulgaria is⁠ less strict, i know lot of people here with USA LLC, without issues with the⁤ tax administration for example - they not treat it like a local business, like what⁣ the france, spain and germany can probably do
 
just until Ursula starts to have a closer look. Then from one day to⁤ the next it will.
 
There are some possible explanations for this:

1. Bulgaria has actively decided not to⁤ enforce their own laws, in exchange for people spending time there and spending money (same⁣ as e.g. Portugal, Thailand, maybe Cyprus)
2. They don't have the resources to properly investigate⁢ this, so they go after the big fish, not some small freelancer making 4k a︀ month

But I can guarantee you, they haven't actually written into their tax code that︁ "register a US LLC, run it from Bulgaria and we won't tax it" - 100%.︂
You will see that if you're a Bulgarian citizen making $$$ with a US LLC,︃ they will tax it.
 
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