Wyoming LLC vs HK LTD?

[bangkokbro]

Hello all, long time lurker here. What is the best business and tax structure for an e-commerce store (shopify payments are payment processing) where most of your customers are based in the EU (75% UK, 25% USA/Canada)?

I've read a lot of old threads and spoke to various people. Some say Hong Kong is a good place due to payment providers and banking, others say Wyoming due to being a pass through entity and paying minimal to no tax.

Ive also read online operating an LLC with Paypal/Stripe/Facebook ads can mean you run into issues a lot more.

I am just wondering what peoples experience is and if they have any advise for me. Thanks in advance

 

[Sister Spam]

Hello all, long time lurker here. What is the best business and tax structure for an e-commerce store (shopify payments are payment processing) where most of your customers are based in the EU (75% UK, 25% USA/Canada)?

I've read a lot of old threads and spoke to various people. Some say Hong Kong is a good place due to payment providers and banking, others say Wyoming due to being a pass through entity and paying minimal to no tax.

Ive also read online operating an LLC with Paypal/Stripe/Facebook ads can mean you run into issues a lot more.

I am just wondering what peoples experience is and if they have any advise for me. Thanks in advance

Best company setup for EU business is the EU or an UK LTD.

If you are resident outside the EU, the best company to sell from is the jurisdiction that gives you all the access to the merchant accounts and easy paypal setups. It can be anywhere. However, you have to register for VAT as a non-EU company to sell to EU customers. Also, you need to check your local tax authority how they treat your non-local company.

Remember, if you are a citizen of the EU, you have 99% chance of getting wrecked by your local tax authority if you form a non-resident company and think you are not liable for the same taxation as a local company.

Example:

You live in Sweden and form a UK LTD thinking you will have to pay UK taxes. Swedish tax authority will look at your "my business is just an online store and I live in Sweden" and will determine that the UK LTD is a Swedish resident and will be liable to Swedish taxes.

 

[CharlieDegen]

Wymoning is much better and easier to setup.
Ive been involved with both jurisdictions.

 

[bangkokbro]

Best company setup for EU business is the EU or an UK LTD.

If you are resident outside the EU, the best company to sell from is the jurisdiction that gives you all the access to the merchant accounts and easy paypal setups. It can be anywhere. However, you have to register for VAT as a non-EU company to sell to EU customers. Also, you need to check your local tax authority how they treat your non-local company.

Remember, if you are a citizen of the EU, you have 99% chance of getting wrecked by your local tax authority if you form a non-resident company and think you are not liable for the same taxation as a local company.

Example:

You live in Sweden and form a UK LTD thinking you will have to pay UK taxes. Swedish tax authority will look at your "my business is just an online store and I live in Sweden" and will determine that the UK LTD is a Swedish resident and will be liable to Swedish taxes.

How is a UK LTD a good option? I have this now, 25% corp tax, 8-33% dividend income tax. Wyoming LLC would be 0% corp tax and 20-40% income tax. Genuine question

 

[bangkokbro]

Wymoning is much better and easier to setup.
Ive been involved with both jurisdictions.

Thanks, do you recommend a service like Clemta/Doola/FirstBase?

 

[CharlieDegen]

First Base is great because they have live chat the will help you with anything. They also set us us with Mercury banking. Excellent experience.
Not quite the same with our HK provider.

 

[bangkokbro]

First Base is great because they have live chat the will help you with anything. They also set us us with Mercury banking. Excellent experience.
Not quite the same with our HK provider.

By any chance, was your HK provider Osome? Also do you still use both HK LTD and Wyoming LLC? If so why do you still use both?

 

[Sister Spam]

How is a UK LTD a good option? I have this now, 25% corp tax, 8-33% dividend income tax. Wyoming LLC would be 0% corp tax and 20-40% income tax. Genuine question

Where are you located?

Did you read the rest of my post?

If you are tax resident in a country that does not tax pass-through entities like a Wyoming LLC or if you are in a country with a dysfunctional tax authority then you can use it.

 

[Waddup]

14+ years in HK here, the first year or two can be rough but after that, it's kinda smooth sailing.

Banking there, however, is a nightmare but Singapore provides some great options for that, but unless you FLY to HK for the dumbest shit such as explaining a Invoice I wouldn't recommend banking there, however, you still got a bunch of NEO bank options.

Had a company in WY as well, the setup was fast and smooth, and tax filing wasn't expensive either but other than opening Stripe and a bunch of other stuff, and using https://mercury.com as a bank I didn't do much else with it.

HK in the beginning asked me to send my entire passport pages, to see if I actually was in the country as told and not in HK, I believe I called this part of the one actual inspection I had with HK and after that never got questioned again, 0% offshore tax pretty much.

Take a look at: https://statrys.com/

Edit: Keep In mind the 50 USD fee monthly for their account but it's worth it.

You will also find other NEO bank options for HK.

I had a couple with the founder some years back, still have a bank account with them as well. They are since some time ago also offered their services to open Singapore and HK for you, and they are a pretty awesome self-funded team.

Negatives for HK would be it's pretty "Chinese" but that's obvious however what I mean to say is that you have less self-control and rely on accounting firms etc while in the USA you can read about it, educate yourself a lot more, etc.

Having both is also always an option lol, it may be a waste of money but I had some absolute nightmares with banks in the past.

 

[bangkokbro]

Where are you located?

Did you read the rest of my post?

If you are tax resident in a country that does not tax pass-through entities like a Wyoming LLC or if you are in a country with a dysfunctional tax authority then you can use it.

UK

Yes I read your post

From my understanding most countries, yes you pay income tax on any income - pretty standard unless you're saying some countries disallow/charge extra for receiving money via pass through entities?

14+ years in HK here, the first year or two can be rough but after that, it's kinda smooth sailing.

Banking there, however, is a nightmare but Singapore provides some great options for that, but unless you FLY to HK for the dumbest shit such as explaining a Invoice I wouldn't recommend banking there, however, you still got a bunch of NEO bank options.

Had a company in WY as well, the setup was fast and smooth, and tax filing wasn't expensive either but other than opening Stripe and a bunch of other stuff, and using https://mercury.com as a bank I didn't do much else with it.

HK in the beginning asked me to send my entire passport pages, to see if I actually was in the country as told and not in HK, I believe I called this part of the one actual inspection I had with HK and after that never got questioned again, 0% offshore tax pretty much.

Take a look at: https://statrys.com/

Edit: Keep In mind the 50 USD fee monthly for their account but it's worth it.

You will also find other NEO bank options for HK.

I had a couple with the founder some years back, still have a bank account with them as well. They are since some time ago also offered their services to open Singapore and HK for you, and they are a pretty awesome self-funded team.

Negatives for HK would be it's pretty "Chinese" but that's obvious however what I mean to say is that you have less self-control and rely on accounting firms etc while in the USA you can read about it, educate yourself a lot more, etc.

Having both is also always an option lol, it may be a waste of money but I had some absolute nightmares with banks in the past.

Thanks for the detailed reply man. How comes you still have your HK company if the WY setup was so good?

 

[Sister Spam]

UK

Yes I read your post

From my understanding most countries, yes you pay income tax on any income - pretty standard unless you're saying some countries disallow/charge extra for receiving money via pass through entities?

Going through https://www.proskauertaxtalks.com/2024/01/hmrc-updates-guidance-on-uk-tax-status-of-non-uk-entities-and-us-llcs-post-anson/ quickly led me to believe that the UK will not treat the US LLC owned by a UK resident as "pass through entity". This means, you won't have to pay personal tax on the income generated by US LLC except for distributed profits (ie. send from the US LLC to you).

If you sell from the US LLC to EU, you have to be VAT registered.

Mercury closed all my US LLC accounts after I could not proof "substantial business" in the USA.

 

[Waddup]

Thanks for the detailed reply man. How comes you still have your HK company if the WY setup was so good?

To get WISE, Stripe, etc and for location, I owned a decent-sized ECOM store.

I also moved countries, and while living in Asia HK seemed the best option.

I even have a third company and several banks in different countries, I work in the affiliate space and I don't like putting all my eggs In one basket.

When my business was growing I had two banks frozen at the same due to my HK location, so decided never again. Took 9 months to get my money out and lawyers to move it out, but times are different now both with Crypto and NEO banks becoming more popular + more knowledgeable.

If you are going to HK, like I mentioned don't bank there it's a nightmare.

But Singapore is awesome for that, with DBS being one of the easier ones to open for your business.

Since your username = Bangkok bro you can also open CITI BANK GOLD, I opened that one remote but it does require 200k to fund within 3 months from opening but it's the best banking experience I have ever seen.

Got my manager on Skype and we talk about the most random shit too, met a bunch of times for dinner so you don't feel left in the dark.

 

[bangkokbro]

Going through https://www.proskauertaxtalks.com/2024/01/hmrc-updates-guidance-on-uk-tax-status-of-non-uk-entities-and-us-llcs-post-anson/ quickly led me to believe that the UK will not treat the US LLC owned by a UK resident as "pass through entity". This means, you won't have to pay personal tax on the income generated by US LLC except for distributed profits (ie. send from the US LLC to you).

If you sell from the US LLC to EU, you have to be VAT registered.

Mercury closed all my US LLC accounts after I could not proof "substantial business" in the USA.

No, you definitely have to pay tax on any income you receive from your LLC. But not any money your LLC makes. E.g. can make 100k in your LLC, pay yourself 20k and you only pay UK tax on that as its your income

 

[Sister Spam]

No, you definitely have to pay tax on any income you receive from your LLC. But not any money your LLC makes. E.g. can make 100k in your LLC, pay yourself 20k and you only pay UK tax on that as its your income

Omg. That's exactly what I wrote.

Ok, I am out. Not worth my time. Good luck.

 

[PrimeCove]

If most of your customers are in the UK & EU, setting up in a jurisdiction like the UK, Ireland, or even Estonia (with their e-Residency program) can make VAT handling and payment processing much smoother.

Hong Kong is great for low taxes, but many payment processors and ad platforms (like Facebook) are stricter with offshore companies, so compliance can be a headache.

Wyoming LLC works well for US-focused businesses, but since your audience is mostly EU/UK, you could face VAT registration issues.

If you want to keep it simple, a UK Ltd or Irish company might be your safest bet for banking, payments, and tax compliance.

 

[bangkokbro]

Omg. That's exactly what I wrote.

Ok, I am out. Not worth my time. Good luck.

Sorry brotha, been a long day.

I have not heard of mercury shutting people down for this before? Do you think showing a few orders going to US customers would be valid proof?

 

[bangkokbro]

If most of your customers are in the UK & EU, setting up in a jurisdiction like the UK, Ireland, or even Estonia (with their e-Residency program) can make VAT handling and payment processing much smoother.

Hong Kong is great for low taxes, but many payment processors and ad platforms (like Facebook) are stricter with offshore companies, so compliance can be a headache.

Wyoming LLC works well for US-focused businesses, but since your audience is mostly EU/UK, you could face VAT registration issues.

If you want to keep it simple, a UK Ltd or Irish company might be your safest bet for banking, payments, and tax compliance.

What VAT registration issues are there? I thought you can just sign up to pay VAT as a foreign entity?

RE payment processors and FB being stricter with HK, I suspected this so thanks for confirming - definitely something to consider

 

[nakamura]

I would recommend: Singapore, Dubai or Hong Kong. For the US, I don't really know much.

I have setup my company in Hong Kong and it was very easy. Getting a real bank account (HSBC etc.) can be difficult, but you can simply use another provider. Right now I am using Currenxie and they are fantastic and also cheap. One guy above mentioned Statrys but the $50 is a big no for me. Its either no monthly fees or a real bank account. At this point I could easily make a real bank account with a bank, but I just stick to Currenxie because its super easy.

The entire setup for the HK company took maybe 10 days and I wasn't there. Everything was done online.

Would I do it again in HK? Hmm...I think I would choose Dubai eventually.

Btw. I never had any problem with any payment provider or service. Facebook, Google ads, Adsense, Apple, Unity, Paypal, Stripe, etc. all is working perfectly fine and no one ever asked me to provide additional information or anything.

The only downside is that for some services like TikTok ads, OpenAI APIs, Claude, etc. they don't offer their service to HK companies because of political reason. In this regard, Singapore is much safer and better.

 

[thaimaster]

Hk is too good options

You can apply for airwallex payment gateways they didnt ask alot

Also payoneer payment gateway accept only hongkong company as well you can apply for stripe

Hong kong cimpany cost more than llc or uk

About $1200

Good luck

 

[bangkokbro]

To get WISE, Stripe, etc and for location, I owned a decent-sized ECOM store.

I also moved countries, and while living in Asia HK seemed the best option.

I even have a third company and several banks in different countries, I work in the affiliate space and I don't like putting all my eggs In one basket.

When my business was growing I had two banks frozen at the same due to my HK location, so decided never again. Took 9 months to get my money out and lawyers to move it out, but times are different now both with Crypto and NEO banks becoming more popular + more knowledgeable.

If you are going to HK, like I mentioned don't bank there it's a nightmare.

But Singapore is awesome for that, with DBS being one of the easier ones to open for your business.

Since your username = Bangkok bro you can also open CITI BANK GOLD, I opened that one remote but it does require 200k to fund within 3 months from opening but it's the best banking experience I have ever seen.

Got my manager on Skype and we talk about the most random shit too, met a bunch of times for dinner so you don't feel left in the dark.

Can you not get wise and stripe with your WY LLC?

Regarding opening banks in different countries, is this legal? Might be a dumb question, but you can open a HK business, and have the business bank account in a different country?

Will look into CITI BANK GOLD thank you!