It depends on how you are going to invoice the tranding company. The point is, the Seychelles holding company does not pay tax and it is possible to invoice your trading company for instant in Cyprus. You get the point?
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Selling E-books where open a company
- Thread starter Talyn
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I get the point. I had thoughts about doing this solution but it got complicated and difficult when Amazon asks you to sign papers on who's the beneficial owner, since it wouldn't be the Cyprus company but the Seychelles company, in this case. Which can be a problem since they don't have a tax treaty with the US. It's hard to tell before you actually do it, Amazon just tells you to contact a tax advisor while in reallty, no one really knows how Amazon will handle it.
I just said screw it and will be biting the 12.5% bullet. Which isn't to bad compared to what I currently pay.
I just said screw it and will be biting the 12.5% bullet. Which isn't to bad compared to what I currently pay.
Does that mean it works for you with a Cyprus company and Amazon account or did you not had a chance yet to get it tested and received your first payout?
I haven't incorporated yet, will do so in November/December.
But it should work just fine as there are no withholding tax on royalties from the US and Cyprus.
Getting Amazon to verify a tax question is impossible...
I can imagine they are not authorized to do so. That said they should at least be able to indicate if it's possible.
It's hard, I've booked a ticket to fly out of my home country in Scandinavia during the incorporation process. The challange is that I need a new address in this country to register the company on (otherwise bank information will be sent automatically to my home country, never ideal). The challanging part is that most banks and even the company that helps me incorporate required a utility bill on the address in the form of gas, water, electricity or fast line phone. That is really hard to get in most countries as a forigner as you will likely rent of the landlord who pays those bills.
The idea now is to go to UAE and incorporate the holding company (which is easier than in EU in terms of proof, at least my agent told me so). Once that company is setup, I will get a Residency ID in UAE and if I get a tenancy agreement + cell phone bill + that ID, it is still possible. But definitely harder than I though.
Wow you are going all in with a huge budget. It sounds like a great way to setup your offshore company. However, did your agent quoted your for maintenance fee per annum for the UAE Holding company?
Where are you going to open the bank account? you mentioned a cell phone bill most banks don't accep it?
Where are you going to open the bank account? you mentioned a cell phone bill most banks don't accep it?
I wouldn't consider it a "HUGE" budget, it's actually cheaper than what I thought.
The UAE Holding Company will cost me about €5500 per year for the license. I will also pay €3000 for a manager.
The Cyprus company will cost €3500 per year with everything.
Ok so I guess it is abit on the more expensive side, but it gives me residency in a no tax country which is a huge plus + it is one of the very few countries that doesn't report back to my home country and is trying to protect the customer from other countries that might want details.
About the bank account:
The bank account in UAE won't be a problem from what I've been told.
The problem is the bank account for the Cyprus company (which hopefully, will be in Cyprus). As I'm the beneficial owner and they only accepted Utility bills like I mentioned before, which I do not have and will be hard to get. Hopefully I will be able to open a business bank account anyway with a Tenancy agreement or similar.
I will add, the €3000 a year Manager is probably not needed, but until I actually get a place in UAE so I can show proof that I live there, I see it as an extra protection layer. You see my plan is not to live in UAE, I want to travel, but in case someone asks for details about where I'm obligated to pay tax, I would just point them to my UAE address... so in 1-2 years I might have a place there (renting it out most likely) and then I can show proof of me living there, even if I physically don't.
So it might cost me €12k a year, but I would be saving ALOT more on taxes.
Let me know if something sounds off though, I definitely wanna get the best solution and not get screwed over in the end.
Yes, pretty much.
One of the best benefits with the UAE FZE company is that you will be granted a VISA if you apply for it (unless you have AIDS and some minor details!). Then you can get your UAE Residency ID that shows that you are a resident of UAE, a 0% tax country. To keep it, you need to visit the UAE every 6 months to get a stamp in your passport.
Your home country might not call you a tax resident in the UAE if you only visit for two days a year, but they really won't know, and they really can't do anything about it either.
I'm making abit more per month than the total yearly cost (and growing).
Still scary though, since I haven't done any offshore planning at all before.
That's € 5000 more for the UAE corp compared to Cyprus. I know you have no tax and strict anonymity in Dubai but you also have huge restrictions and if you are doing anything wron you better never come to the UAE for personal visit, they will put you into jail straight!
That's a big budget to achieve it but it means you are doing well so for sure I understand why you are going this way.
Please update the thread when you have everything setup and if you don't mind also total costs and what complication (if any) you faced during the setup.
I'm excited to learn more
Yes I do... and it's really high, to high to even think about with my current setup which is just a sole ownership, the tax is around 50% or more. If I would do propper tax planning within the country, having two LLC's, one holding and one operating would be better. The problem here isn't the corporate tax so much but it's more the private income tax and the limits it brings. For example, I can't take dividents on €200k to myself if I only paid myself €20k salary for the year, pretty stupid if you ask me.
That's € 5000 more for the UAE corp compared to Cyprus. I know you have no tax and strict anonymity in Dubai but you also have huge restrictions and if you are doing anything wron you better never come to the UAE for personal visit, they will put you into jail straight!
That's a big budget to achieve it but it means you are doing well so for sure I understand why you are going this way.
Please update the thread when you have everything setup and if you don't mind also total costs and what complication (if any) you faced during the setup.
I'm excited to learn more
I'm still having second thoughts about this setup though. I'm making good money right now but I still rely on Amazon. If they were to kick me off their platform for some reason, I would be stuck with a €12k a year company structure and very little income. I could do Cyprus + UAE Offshore Holding company which only costs like €5500 combined a year. The problem is that then I don't have any residency which will give me trouble. Living that nomad lifestyle is hard!
I'm still doing the Cyprus company for the trading book publishing company. I have to do that because Cyprus is the best option as they have the lowest tax rate in the world that has 0% withholding tax with USA on royalties. Sadly, UAE doesn't have that. The purpose of my UAE company would be to act as a holding company and consultancy company for the book publishing company in Cyprus. This way the UAE company can charge the Cyprus company for doing consultancy like design and marketing. That way I can get the effective tax rate down even more. Then pay the profit that is left as dividend to the holding company.
Thank you for your generous replies - I wonder why you did not go with the BVI company - they do not have the withholding tax as well - or Amazon does not support them?
Here are all US tax treaties. They do not have any tax treaty with BVI so there would be a 30% WHT.
http://taxsummaries.pwc.com/uk/taxsummaries/wwts.nsf/ID/United-States-Corporate-Withholding-taxes
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