Cheap Setup For Ecommerce / Dropshipping - 100% Legit

[akao]

Currently doing dropshipping / ecommerce and i have some income from affiliate marketing and advertising.
I am an EU citizen. I use paypal and 2co as my standard payment gateways - all legit transactions, no complaints, etc...

Things are going rather well and revenue is starting to increase, so i'm looking to set up a company so that i don't have to pay taxes.
I'm not looking for full anonymity (i wouldn't mind having it), i just want to deal with taxes (or at least high taxes).

I sell stuff (from services to products - clothing, health and beauty, tech stuff, etc) to people all over the world : US (about 40% of customers), EU, AU/NZ, CA mostly
Currently doing about 100k per year in revenue, but i estimate we can hit 500k or more within 12 months (and most of that will be profit)

I'm looking to set up a cheap option (company + bank account) to run the ecommerce stores without much hassle.

I don't need a specific location for the company, but the thing is, for the bank account, i don't want to travel outside the EU to open it (and with the covid thing, it might be difficult to travel). I want to set up things asap.
Here are the options i found so far, don't know which one to choose.

1) Delaware / Wyoming / New Mexico LLC (or even Corp - not sure which one would be best) : it's cheap to set up, and i can get a US bank account without going there - cost is $350 (or $450, can't remember exactly) bank account included
I should be able to use paypal or stripe to process payments, i have 2 main concerns : a) i know there's no state tax there, but i remember reading something about a 30% federal tax (on all sales made to the US) which is a bummer; b) i don't want to have to deal with account and statements and filings (or having to deal with an accountant).

2) Seychelles IBC + Singapore Bank account - i actually found an offer on this forum from 6sigmagovernance.com (any feedback on this would be appreciated) - $800 for the whole package which seems great - i know there are no filings required each year and there's just a flat fee per year - thing i'm not sure about is what kind of payment processing options will i get accepted into with a seychelles ibc (paypal and 2co i think accept SC, but not sure)

3) Hong Kong company + bank account by NEAT - found this recently, don't know much about it, incorporation by neat is $700 or so and it seems to have everything i need, not sure what are the hidden catches, or how much taxes i need to pay (i don't sell anything to HK) or how private is everything.

4) any other solution i missed and suits our needs (most of them seem pretty expensive tho).

So main reqs :
- cheap (up to $1000 bank account included)
- no need to visit the bank
- low or no taxes
- no need to file things constantly (or as little as possible)
- privacy is good but not required

 

[MrPeachy]

This is exactly my questions, would be great to get some help

 

[JohnLocke]

so i'm looking to set up a company so that i don't have to pay taxes.

You won't avoid taxes.

I think you misunderstood something, you avoid paying taxes just because you set up a company. You can get some tax deductions in some countries but there will usually always be some form of company tax or personal tax to pay.

You could setup a Seychelles company with a TransferWise account to get started. That's cheap, fast and almost no administrative concerns. Once you have grown your business you may look into a better setup, where you most often can't avoid accounting and tax filing.

 

[JustAnotherNomad]

If you live in the EU, you can’t legally avoid any taxes this way. Period.
It will either not save you any taxes, or it will be illegal or it will cost a lot of money.

 

[akao]

You won't avoid taxes.

I think you misunderstood something, you avoid paying taxes just because you set up a company. You can get some tax deductions in some countries but there will usually always be some form of company tax or personal tax to pay.

You could setup a Seychelles company with a TransferWise account to get started. That's cheap, fast and almost no administrative concerns. Once you have grown your business you may look into a better setup, where you most often can't avoid accounting and tax filing.

Seychelles is a good option, no accounting or tax filing - but is there any credit card processor that works with a Seychelles IBC?

If you live in the EU, you can’t legally avoid any taxes this way. Period.
It will either not save you any taxes, or it will be illegal or it will cost a lot of money.

Why do you say that? How come you cannot avoid taxes in the EU if all the money is made by your offshore company (which is not just a pass through llc) ?

 

[JustAnotherNomad]

Because your government isn’t stupid.
Do you think ANYONE with an online business would be paying taxes in their home country if this was possible? So there are lot and lots of laws and rules in place to make saving taxes either illegal or expensive. If you don’t like that, you have to move to a different country.
PLEASE inform yourself a bit more, before finding yourself either with a useless offshore company or in jail.

 

[bru1234]

did you ever heard about RCS?? Automated data transfer. Your company could be considered as if it was in your own country and thus taxed there + all problems that it can creates.

 

[JustAnotherNomad]

CRS is just how they’ll catch him. It’s the laws of the country he lives in that are the issue.

 

[akao]

RCS is for VAT as far as i know. CRS yes, that might be an issue, but what's that got to do with the revenue the company makes? The company is registered in an offshore jurisdiction, not the EU - so it actually pays tax (whatever tax may be) in that jurisdiction. Let me know what am i missing here?

 

[JustAnotherNomad]

You are missing your local laws that (naturally) don’t allow this. Any offshore company you run from your own country will be considered a local company for tax purposes. You MUST declare the company to authorities and pay your local taxes. The only legal way around that is to make sure that the company is not run from your home country, i.e. that you rent an office with employees in the other country. But that will cost money. You must pay a regular salary. If you don’t do any of that, then you are guilty of tax evasion.

You can either believe us or ignore the advice and go to jail. Good luck.

 

[bru1234]

crs is not only for vat
CRS means your country will know you are beneficiary of a bank account abroad and will know what you got on it....

 

[akao]

crs is not only for vat
CRS means your country will know you are beneficiary of a bank account abroad and will know what you got on it....

RCS is for VAT (you mentioned RCS in your post - and i said RCS is for VAT). CRS is for reporting - but one thing i don't get, how will the country know i am the beneficiary of a bank account abroad if i don't even have a bank account abroad? i don't get it...

 

[Tax Cow]

Beautiful wishes!

- cheap (up to $1000 bank account included)
- no need to visit the bank
- low or no taxes
- no need to file things constantly (or as little as possible)
- privacy is good but not required

We all want a gorgeous low-maintenance supermodel with perky natural large breasts who does not value material possessions nor expects much commitment from her partner.

What is your trade-off?

Paper-only Seychelles IBC + TW for an active business is a pig with diarhea (no offense admin! ). Legit until nobody looks into it. This solution flys only in conjunction with advanced privacy planning or with permanent relocation to a banana island that does not care.

Have you considered building your business in a low, but not zero, tax jurisdiction? I.e. Hungary, it has 9% CIT... A nice scalable on-shore jurisdiction with single market access. There's also a turnover-based low-tax micro company regime in Romania. Estonia does not tax profits/income pre-distribution, then a 20% tax applies. Similar deals worth a consideration exist. Travel and evaluate.

 

[JustAnotherNomad]

All those other jurisdictions also require substance. He can’t run the company from his home country.

 

[Tax Cow]

@JustAnotherNomad

Yes, as I said, "..considered bulding your business in..." and "travel and evaluate"

Eventually, he can hire a CEO, and live as a passive shareholder where he likes. If his business succeeds, that is.

 

[JustAnotherNomad]

He could also do that in a 0-tax jurisdiction like the UAE.
The issue is that he will need a local office and a local director. And that won’t be cheap.
He asked for a cheap solution.

 

[akao]

Thanks for the replies guys, privacy is not a concern, i don't plan on doing any shady s**t. Also, taxes are not a concern (i plan on paying what needs to be paid)

my only concern is accounting, reporting, filing, auditing - all that bureaucracy... if there's any jurisdiction where i can get away with not doing all that legal paper s**t, i'm more than interested (belize and seychelles so far - but no credit card processing)

 

[JustAnotherNomad]

No, you can’t. How will you prove to your home country how much taxes you need to pay if you don’t have proper accounting?

You either need to invest in a proper structure (which will cost money) or move your a*s away from that country (you may still be able visit, but you can’t live there the whole year).
All other options are illegal or not helpful (same accounting requirements, same amount of taxes).

 

[MrPeachy]

Does anyone know if currenxie or airwallex works with Paypal and Stripe/Shopify payment? I'm doing Dropshipping same as OP and looking for a fast way I can set up a company and Bank account in HK as soon as possible, with the current situation with the pandemic I'm not able to travel to HK to open a bank account, so I'm looking for a short term solution until things go back to normal and I can travel and open a proper bank account in HK.

 

[akao]

No, you can’t. How will you prove to your home country how much taxes you need to pay if you don’t have proper accounting?

You either need to invest in a proper structure (which will cost money) or move your a*s away from that country (you may still be able visit, but you can’t live there the whole year).
All other options are illegal or not helpful (same accounting requirements, same amount of taxes).

that's not the point, in my home country i pay taxes only for the revenue i make, not for the revenue of the company that i am stakeholder of - i would only need to pay taxes (myself) when the company distributes dividends.

but that's something else - any jurisdiction where i can get away with not doing all that legal paper s**t, i'm more than interested...