Lowering tax burden. Company registration NEEDED for e-business. Merchant account + PP.

Bilbo Begins

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Hey guys,
I am looking for a jurisdiction where to form a new business for tax reasons.

Me and my partner are Ukrainians, and my partner is resident in Italy. We are about to launch our online shop (shopify) with jewelry line that will further expand into original clothing. The business is 100% legal. We start small and going to scale to 10000euros in a couple of month, with later growth up to 50k a month.
The products are made in Italy and gonna be sold primarily in EU and rest of the world, but later the main market will be in Asia.

We are looking for a stable structure that could allow us to have corporate bank account + merchant bank account + PP or Stripe or 2co.

From what I found there are following possibilities:
- UK ltd or Irish ltd + merchant/corporate bank account (high deposits for non-UK residents?)
- Malta
- Cyprus (account fees cost an arm and a leg)
- UAE FZ
- Bulgaria or Latvia (but Bulgaria doesn’t have a full PP)
- HK + HK EMI + PP (Is choosing EMI a good idea?)
or
Singapore

UAE FZ option, Malta with Nominee Director or Irish Ltd looks interesting for now.

We are ready to invest around 5k for all travelling and paperwork (registration + merchant account + corporate account).

What would you suggest as the best jurisdiction (in terms of cost of formation vs legal burden and tax) for small-medium business with potential for growth? Or maybe other scheme you would suggest? (Holding company + UK Agent?)

We are looking in long term period taking into account that offshores are getting shut down, and US and EU are looking at everyone's pockets.

Much appreciated!
 

yherrliche

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I live in the UAE, the UAE fz is a good option if you're capable of coming here anytime.
The UAE likes to block funds and ask for random paperwork, especially the banks if you're not resident. Many e-business people I knew got their funds stuck in the bank. There's a law here that non-resident can't really have bank accounts, but as we're in the middle-east it's a bit ole ole.
One of my good friend had a couple issues like that and he was lucky to be able to fly from canada here the same day, the people from the bank and the freezone where even surprised. They didn't expect that because in most cases people can't just jump in a plane full fare to come deal with a $2000 issue.

Also if you're not offshore, you might have to pay VAT. The VAT here is new and unclear, and it works in a strange way. It's basically 5% on everything and anything, with no clear options yet, each accountant will say something different. You might even need to charge VAT on your clients abroad, and bank transactions sometimes have VAT too (imagine 5% compounded). As the VAT started this year, it will take a while before we know the concequenses and they will probably look for some examples to take down.

The main benefit from the UAE would be the simplicity, there's one tax (VAT of 5% on just everything) and that's it, you don't need 15 lawyers and accountants like in France to survive and still make mistakes (a friend in France just paid 52000euro in fines because of an accountant mistake).

I recommend UK, just yeah high deposits for the bank account but most UAE banks will also ask for a high deposit, and most FZ companies need 100kAED (25keuro) capital to complete the opening. Also most payment processors are blocked in the UAE except the Network (the bank's one) and it's pricy, or a downgraded version of paypal.

I hope it helps somehow !
 

Bilbo Begins

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I live in the UAE, the UAE fz is a good option if you're capable of coming here anytime.
The UAE likes to block funds and ask for random paperwork, especially the banks if you're not resident. Many e-business people I knew got their funds stuck in the bank. There's a law here that non-resident can't really have bank accounts, but as we're in the middle-east it's a bit ole ole.
One of my good friend had a couple issues like that and he was lucky to be able to fly from canada here the same day, the people from the bank and the freezone where even surprised. They didn't expect that because in most cases people can't just jump in a plane full fare to come deal with a $2000 issue.

Also if you're not offshore, you might have to pay VAT. The VAT here is new and unclear, and it works in a strange way. It's basically 5% on everything and anything, with no clear options yet, each accountant will say something different. You might even need to charge VAT on your clients abroad, and bank transactions sometimes have VAT too (imagine 5% compounded). As the VAT started this year, it will take a while before we know the concequenses and they will probably look for some examples to take down.

The main benefit from the UAE would be the simplicity, there's one tax (VAT of 5% on just everything) and that's it, you don't need 15 lawyers and accountants like in France to survive and still make mistakes (a friend in France just paid 52000euro in fines because of an accountant mistake).

I recommend UK, just yeah high deposits for the bank account but most UAE banks will also ask for a high deposit, and most FZ companies need 100kAED (25keuro) capital to complete the opening. Also most payment processors are blocked in the UAE except the Network (the bank's one) and it's pricy, or a downgraded version of paypal.

I hope it helps somehow !

Absolutely helpful! Thanks a lot for ur reply!
Yeah 25k for deposit is to hight for us now. Maybe we gonna consider it later on and restructure. Yeah, I was leaving in Tunisia for a few years, so I know how arabs are acting and doing business. "Ole Ole" hahaha.


Do u know any service providers for UK and even UAE? Might be useful for the future. Thanks
 

Ali008

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Maybe you can do some acrobatics to avoid income taxes. What's the dividend tax rate for you in Ukraine and Italy?
 

yherrliche

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Do u know any service providers for UK and even UAE? Might be useful for the future. Thanks

I don't know any in the UK I'm sorry, in the UAE the main freezones you'd be looking for is Ras-Al-Khaima or Fujeirah. The others will force you to rent an office (its expensive as hell here).

For offshore company formation you'll need to pass through specific agents. For Ras-Al-Khaima agents, you can find them here : https://www.rakicc.com/guidance/registered-agents/

I'm sorry I can't help more than that ! Oh an yes check out estonia e-residency too like @Biswas Marketing mentionned . I heard good thing about it but not in much details.
 

Vhack

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Estonia E-Residency and you don't need to travel. I think taxes are ~20%, not sure tho, might be lower.
 

Goola

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Get a tax advisor and separate your personal income tax from the business.

google flag theory;
I believe a US LLC with a non us bank account is probably the easiest to get a merchant account - larger country with more options; alternatively UK is easy to get a business LTD and business bank account opened if if you do not live in the UK and you can get everything done remotely apart from the bank account opening - you will need to pay for an introductionary service - about 500 pounds but it will give you the result. Google coddan and remember the website extension is uk ;-) they know a lot about this ...

Avoid coddan at all cost.
Shady and scammers.
 

BHTC

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Hi Bilbo,

Do you and your partner still need help in this matter?
 
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