Need Advice in Offshore Company formation

[offsh]

I'm a software developer and I'm planing to sell a mobile application on Google Play.


To do this my country must be in the Google's list of supported locations.


I am a resident of the EU but to my regret there are no my country in this list.


Currently, only developers in the below countries may sell paid applications:


ӢArgentina


ӢAustralia


ӢAustria


ӢBelgium


ӢBrazil


ӢCanada


ӢCzech Republic


ӢDenmark


ӢFinland


ӢFrance


ӢGermany


ӢHong Kong


ӢIreland


ӢIsrael


ӢItaly


ӢJapan


ӢMexico


ӢNetherlands


ӢNew Zealand


ӢNorway


ӢPoland


ӢPortugal


ӢRussia


ӢSingapore


ӢSpain


ӢSouth Korea


ӢSweden


ӢSwitzerland


ӢTaiwan


ӢUnited Kingdom


ӢUnited States


I'm looking for advice what offshore scheme can I use in my business to avoid taxes in my country and to be able to sell applications on Google Play.


I'm thinking of forming an offshore company along with a UK company and get a bank account in UK for this company. What do you think about this?


I will apreciate any ideas and help.

 

[JohnLocke]

What you may look into would be a European company for instant in the UK‌ which is owned by a Offshore company. If you would like to avoid that the‍ payment processor has to do DD on both the UK company and the offshore company⁠ then you should form the UK company first, apply for the merchant account and once⁤ approved and integrated you form the offshore company to let them hold all shares in⁣ the UK company. That should work.

 

[offsh]

Thanks for the advice. What type of UK company would you advice to form?

I would like to setup a structure where I would pay yearly fixed fee for offshore‌ company instead of UK taxes.. is it possible?

 

[JohnLocke]

A simple LTD should do it, actually we do not operate in the UK and‌ for that reason can't help.

To avoid the UK taxes you may consult some professional‍ i.e. tax adviser, tax consultant who may help you to structure everything. I think it⁠ should be possible.

 

[dominic]

Check the rules for a United Kingdom company to be fully owned by a offshore‌ company, what tax has then to be paid? I think your solution may be there.‍

 

[tarous]

Depending on the needs and size of the business you might also go try and‌ read-up on Singapore. Opening a subsidiary company there is easy although the fees incl. nominees‍ (required) would reach around $5k for 1st and around 2-3k for following years. The upside⁠ is that Singapore uses territorial rules for taxation, so company income originated abroad is tax-exempt⁤ and for income within Singapore it's a flat 17% rate for non-resident companies. You'd have⁣ to read about foreign/local source definition to avoid surprises though.

 

[alain]

I have hear a lot of good about Singapore in the past but they say‌ today it is not what it was and not worth it?

 

[Zqq]

Singapore is still a very good jurisdiction to incorporate, but it's not suitable for small‌ companies as the costs to incorporate and maintain the company are quite high. Hong Kong,‍ for example, is equally reputable and much cheaper. No local director is required for Hong⁠ Kong. The directors and shareholders can even be other companies (including offshore companies), which means⁤ your name is nowhere in Hong Kong public records.

 

[alain]

And what are the estimated fee to establish a Hong Kong company? can I open‌ company and bank account in HK remote?

 

[Zqq]

To incorporate in Hong Kong, expect to pay around 1,500 to 2,500 USD.

It is‌ generally not possible to open bank accounts in Hong Kong without visiting the bank in‍ person. The banks insist on meeting you in person.

 

[tarous]

Why would Singapore not be worth it? AFAIK not much is changing in the Lion‌ City. In fact, it's a pretty good place to establish a business since it's a‍ hub opening you to Southeast Asia. And if you would consider to turn your company⁠ into a resident one, there's a lot of capital for IT flowing around. Plenty of⁤ VC funds, government funds and quite a lot of talent - the IT community is⁣ quite strong there.

As for bank accounts the companies that assist you in setting up⁢ the business will help you open an account as well, just need to check all︀ details with them. However, if you start off as a non-resident company then big banks︁ will have big requirements (e.g. 100k USD deposit upon opening). You'd have to look around︂ for other solutions. But you can easily Google up a few companies in SG and︃ they can tell you more via e-mail.

PS. And since you're into apps then InMobi,︄ the largest independent ad network, has their big office there too, good place to connect.︅ And of course Google has their SEAsian HQ there as well.

 

[Zqq]

A Singapore company requires a local, resident director and that drives the costs a lot.‌

Singapore is a fantastic jurisdiction to do business in. Taxation is low and simplistic. Filing‍ is straight-forward. The government is responsive and helpful, and banks are some of the best⁠ in the world. But for a non-resident looking for a reputable jurisdiction to start up⁤ a one-man operation, Hong Kong offers much cheaper solutions.

 

[tarous]

Yes Singapore requires a local director, but that's what I included above - it's covered‌ by the nominee services and there can be other, non-resident directors appointed for the purpose‍ of running the business from abroad. Rough cost of a nominee director service in SG⁠ is around 1500-2000USD per year. The complete maintenance costs (incl. company secretary services, virtual office,⁤ account etc.) can range between 2-3k a year. That's why I also mentioned - depending⁣ on the size of the business it can be a good place to incorporate.

In fact if the business is small I would even opt for starting the IT business⁢ in Singapore, as the corporate taxation is effectively 0% for the first 3 years up︀ to 80k USD in revenues. The huge upside to this is the fact that Singapore︁ offers a lot of opportunities to get financing from local investors and the government, which︂ is helping IT businesses. The IT community is also very vibrant and some of the︃ largest corporations have their local HQs there.

There's no good or bad answer here, all︄ depends on the needs and the current situation of the company.

 

[JohnLocke]

I agree with tarous, for simply Internet business which is a start-up or where one‌ know it never will be something big you can start out with a Seychelles company,‍ if it is well established business and you plan to expand your business to the⁠ Asian and need staff, office etc. Singapore may be one of the best places doing⁤ so.

 

[tarous]

But the fact of the matter is, you don't have to be in need of‌ staff. Singaporean company can be directed completely from overseas without you ever coming to the‍ Lion City. For IT though, there are certain perks which make SG quite attractive -⁠ it's more about weighing all the pro's and con's in a specific situation. Singapore alone⁤ can act as an offshore destination - either you incorporate just there and enjoy the⁣ perks (tax-exemptions and easy financing for start-ups) or you form an IBC in Seychelles and⁢ a subsidiary in Singapore - and, with proper accounting, can be fully tax-exempt on foreign-sourced︀ income.

Now, whether that's the ideal solution I don't know - I know far too︁ little about other jurisdictions. I just happen to live in Malaysia and travel very often︂ to Singapore, so I know the environment very well 🙂 It's quite possible that other solutions,︃ involving UK companies, are better for you - that I don't know, depends on your︄ plans.

 

[trisstann]

are you sure cyprus isn't in those countries?

 

[JohnLocke]

May I ask you where you got this information from, please post a link or︄ type in the url if possible. I can't either understand why Cyprus is not on︅ this list.