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Questions about moving to another country, Payments and Checks

Discussion in 'Business & Tax Advice' started by charliebne, Jun 21, 2008.

  1. charliebne

    charliebne Registered Member

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    Hello all, Ive been thinking about moving to Mexico for a while now, and just wanted to know if i could migrate my business to another country.

    I basically do CPAs and Clickbank, so... do CPA companies like Azoogle ads, CPA empire, etc send out checks to other countries such as Mexico? What about clickbank?

    Also, what about the IRS and stuff, how does that work when you are in another country?

    Thanks!
     
  2. BoltActionz

    BoltActionz Newbie

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    There are income exemptions when you relocate outside the US but do not denounce citizenship. For instance, something like the first $80,000 or so (not sure of exact amount, as it has changed recently) of income is exempt from taxation. However (and this is a BIG however) you are still required to file a tax return...just not pay tax unless you make above the designated amount.

    Just because YOU physically leave does not always require that your business leave and go with you. That's one of the unique powers of having an internet business. You are not always required to take your business "with you" even though you might be transacting business while physically located outside the US.

    Not sure of the rules as far as your payments go. However, you could always elect to continue to receive your payments at a US address and have them deposited into a US account. One of the better ways to do such a thing is to start a US corporation. In most cases it requires a registered agent to receive corporate paperwork. You could pay the registered agent an additional fee for "mail receiving and forwarding" and then have them receive your payments and then turn around and mail them (the actual checks) to the US bank of your choice to be deposited. This is something some agents will handle for you no matter whether you are physically located inside the US or not. You just have to ask to see what the agent will provide for you. Sometimes they provide at no or very low charge, and the services vary greatly from one to another. If you elect to incorporate then the income exemption I mentioned above does not apply because the entity will still be a US entity, but by doing things this way then all you have to do is contact your companies that are paying you and explain that you have incorporated and that you now wish to change the payor. In most cases it's simply writing a letter or filling out a form and they will change it. I changed a Clickbank payee several years ago and all they wanted to know was that I had the authority to do so, to make sure it wasn't someone else. So they requested docs to verify. Right now I don't remember exactly what it was they wanted but it seemed almost painless to provide. I think it was something like a letter from me the individual stating that I authorized it or something. Check with them to see, as my memory is foggy and they may have changed the requirements or something.

    The entity you create (can be corporation or LLC, your requirements may vary...and you need to talk to a professional about which is best for you) just needs to have a tax ID number, which in the US for entities is called an Employer ID Number, or EIN. This number is obtained from the IRS by filling out form IRS form SS-4 form. Free to obtain from the government, although some people charge as much as $200 to fill out the one-page document that comes with instructions attached. Why? Because they can! And because sometimes people just want someone else to "handle it all" for them. Questions about filling out the form? Call the IRS if it's not answered in the detailed 4-page instructions.

    As an interesting aside, the SS-4 form gets the corporate equivalent of a social security number, and the SS-5 form (even though handled by a different gov't agency) gets the actual social security number. SS-4 = IRS, SS-5 = Social Security Administration. Same purpose for each number, the tax ID number. SS-4 = (in most cases) companies, SS-5 = living, breathing persons.

    Several reliable sites that may help you include:

    InternationalLiving.com
    EscapeArtist.com
    SovereignSociety.com

    I don't work for any of them, but I have found their info to be helpful and reliable. Some parts of their site are paid-only access, and some parts are free to all. InternationalLiving (dot) com is especially interesting, as they cover several different perspectives, not just the American living outside the US but also other countries' citizens living outside the borders of their country.

    There is quite a bit of scam information on foreign corporations and taxes on the internet, so be careful. As a US citizen you are required to pay taxes on your worldwide income (subject to the appropriate exemptions and exclusions, of course), unlike citizens in most other contries. So anyone who tells you "you don't need to file if you don't live in the US" is asking you to take a trip down a road that has you following Wesley Snipes and can possibly get you into trouble. While you may not need to pay, when you leave the US it becomes even more important that you file anyway.

    As for the cost of incorporating, that depends on where you are located and where you decide to incorporate. It's a complicated world out there. And Nevada or Delaware are not always the right choices. Many times it's less expensive to incorporate right where you live. In many states the actual filing fees paid to the state are less than $100, and in several states the cost is $60 or less. For instance, it only costs $50 to incorporate in Hawaii. That's the cost of actually filing the paperwork. That does not include any required business licenses, etc. I think it's also $60 to incorporate in Louisiana and Missouri as well. And many times it's a lot less to incorporate in any other state but Nevada. Nevada has planned well. It's fairly inexpensive up front, but the annual maintenance cost to keep the corporation up to date is more expensive than a lot of other places.

    However, cost should not be the only deciding factor in where you decide to incorporate. You do not have to find and pay an expensive attorney in order to get proper guidance, however. Contact your local SCORE office to find out what you can for free or at very low cost first. Where's the local office? Try here: SCORE (dot) org, or http://www.score.org

    I hope you find the above information helpful. However, do your own due diligence before you decide one way or the other what to do...I am not a lawyer and do not play one on TV!
     
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  3. mak111

    mak111 Jr. VIP Jr. VIP Premium Member

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    im in exactly the same situation except the opposite, ill be moving to philadelphia for university and im moving into the united states, which legally forces me to give 40% of my income from places like ebay..

    1. i am not a u.s. citizen and will not benefit at all from the taxes i will be paying from my own pocket....
    2. fundamentally, there are no laws that require you to even pay your taxes... even if you are a u.s. citizen. [watch zietgiest]

    ive already signed a form which "no US activities" or whatever its called....

    this becomes void as soon as i buy an apartment in philly and start working from there..

    anyone think i can just keep my ebay account sending to the same paypal address and have paypal send me the check to the US... is there any way ebay/irs would know?

    after all paypal IS completely private... no?
     
  4. charliebne

    charliebne Registered Member

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    Boltactionz, Thanks SOO much for this info, thanks for taking the time to write all that for me. You rock dude!
     
  5. BoltActionz

    BoltActionz Newbie

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    This is the exact logic that got Wesley Snipes into trouble with the IRS, and now has him staring at 3 years locked up somewhere...

    mak111,

    Your situation is different. Like you said, in reverse. So here's the thing. Are you relocating your BUSINESS to the US, or just your physical body? They can be separated in such a way so that one comes to the US and the other stays behind in the country you are currently located. The proper legal term for this is "legal person". That is the exact description of a corporation, LLC, or other entity. Legal persons are entitled to all of the same protections and rights as physical persons unless a law specifically says "natural persons", which means the living breathing physical you.

    How to separate? Incorporate in the country you are located in now (provided it is not cost-prohibitive...which is relative to how much income is coming in to the business, so everyone's decision will be different). When you set it up, hire a registered agent or your country's equivalent. The registered agent is the designated receiver of paperwork from the government and of process service in the event your entity/company is sued. Someone has to sign the paperwork to prove it was served, and in the US that person is usually called the registered agent. The cost of someone who provides such a service varies greatly from one company or individual to another. Case in point: just in Nevada alone there are companies that do this for $50, and there are also companies that will do this for $250+. It pays a LOT to shop around, and to ask questions. Some companies will include limited mail forwarding in the price...meaning if you get something they will forward it on to you wherever you tell them to send it and you just update your location with them as you need to...and others do not. And their service offerings oftentimes do NOT have to do with how much they charge. Believe it or not, some of the ones that charge $250+ will charge EXTRA for the mail forwarding. Why? Because they can.

    So be careful. As I said before, I am not an attorney. But I have read a lot on the subject, some for my own requirement and some just because after awhile some of it got curious...or interesting.

    Where they got Mr. Snipes is that most requirements regarding things having to do with taxes are not established by tax law but by previous court rulings and decisions. And the laws his "advisors" quoted him did not apply to him...in other words, the advise he got did not fit his particular situation. But he took the bad advise he got and just "ran with it".

    I'm sorry if I sound preachy but I cannot stress enough, make sure the advise you get fits YOUR PARTICULAR SITUATION. There are unique details in everyone's situation that will change the basic answer to many of your questions that people in internet forums cannot possibly answer. And you do not want to communicate your exact details over the internet as it can be held against you in the future, as some of the laws you could be considered to have been found in violation of have to do with your intent as well as your actions.

    Most of the time this means seeking the advise of a competent attorney who specializes in the subject matter you have questions about. A patent attorney in not the best person to seek assistance with immigration law! This sounds obvious at first glance. And yet so many people will seek out a trusted family friend who is an attorney who has a general practice or specializes in something completely unrelated and end up getting advise they don't even know is bad until they end up in trouble with an 3-letter alphabet agency of some sort and then realize (too late) that they need someone who is competent in the subject matter of their issue and/or questions. There are so many intricate details in the law that it is impossible to know all of the law even for the best of attorneys. There are a lot of attorneys out there who are afraid or embarassed to admit that they do not know the answer to your question and will instead give a general answer that may or may not apply.

    In addition, you want to make sure you have an attorney that you are comfortable with. If you are an aggressive type when it comes to pushing the envelope you are probably not going to be comfortable with an attorney whose style is the equivalent of a chihuahua on valium. On the other hand, if you don't want to push the envelope you are not likely to be comfortable with an attorney whose style is like a pitt bull on crack!
     
  6. BoltActionz

    BoltActionz Newbie

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    Also mak111,

    The IRS has gotten some unique ways of analyzing some of Paypal's activities. They are aware that ebay based businesses are doing big bucks and that they are possibly missing out on potential $$$ there. The answer below may or may not work for you, depending on what country you are currently located in and what the Paypal rules and/or services are where you are currently located.

    What you would be better off doing is, getting the Paypal payments to transfer to the address OUTSIDE the US that they are currently going to or another address outside the US. What I mean is, if you currently have a bank account in another country, continue to receive the money there...but arrange a way to access it from the US. If you take the example of incorporating outside the US where you are located now, then you would establish a business address someplace outside the US. Doesn't have to be anything more than a mail receiving place. Or maybe your registered agent would do this as well. And then if you get checks, they could package them up and either send them to you and you turn around and mail or FedEx them to your bank making your deposit by mail, or your registered agent could package them and send them direct to your bank for deposit into the account. If you have the ability to receive $$$ direct to the bank from your Paypal account, keep that account open and continue to receive the money that way. But what you do to prevent Paypal from freezing your account because your IP address doesn't match up with the location of your mailing address is, you contact Paypal and tell them you are traveling to the US and that you will log in from time to time and that it is not someone hacking your account but that you expect to be located in the US for a little while. That way they can flag your account with the info in such a way that they don't freeze it for the IP address/country location not matching up.

    This is something that might be a little complicated depending on the volume of business you are doing. You may be required to file tax returns on the business in the country where it is located (or not). It depends on where you are located, who your customers are and where they are located, and if you are required to pay based on your country's laws.

    It may be worth it, and it may be worth it to go ahead and pay whatever taxes you would be required to pay in the US. Each situation is different. Also, it may be worth it to create the separate corporation but the additional headache of keeping the records may not be of value to you so you may elect to just go ahead and forget about the separate company thing, depending on what you are up to. Not everyone is willing to deal with the additional recordkeeping and other stuff. While it doesn't have to be complicated, everyone's tolerance for details is different.

    Hopefully this helps your mind to start thinking of possible solutions and gets you off to the right start, whatever direction is right for you.
     
    Last edited: Jun 23, 2008
  7. frenchboy

    frenchboy Jr. VIP Jr. VIP Premium Member

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    How did you become so knowledgeable about taxes? I want to know all of this! But I'm Canadian I dunno if it'd be as useful.
     
  8. jesika

    jesika Newbie

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    p { margin-bottom: 0.08in; } There are more opportunities out there at islands. Government is encouraging foreign investors to invest in real estate for certain values of integrity.
     
  9. ittechs310

    ittechs310 Junior Member

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    Why are you moving to mexico?