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Which company to incorporate in?
This issue, which I don't know much about, has been on my mind for some time. My country's laws make incorporation hard to accomplish, expensive as 1000 dollars, and makes you pay a lot of tax. So the question is, which countries are advantageous for incorporating limited liability companies for foreigners? And which of those are cheaper? Are websites that help you incorporate scam? I'm not interested in US incorporation for BS reasons of my own. Also, having a company in the EU would result in making a lot of people pay VAT which is bad for business as it would raise expenses for the customers. Any ideas?
Comments
So we've determined:
-you're not in the US
-you're not somewhere int he EU
....soooo where are you?
Incorporating in UK is cheap i've heard. VAT would be an issue only if you go over certain yearly turnaround, which i doubt you will.
@rds100 What do I need to do to file tax stuff in the UK? In my country all companies need a designated certified accountant who has to do the returns etc.
@Damian that leaves you with up to 200 countries
Also places that the world doesn't recognize as a country. Or you could ask the forum admin for my IP, but that would be a invasion of my privacy. 
@Akira you are in Turkey, what's the big secret here.
And about incorporating in UK - AFAIK there are companies that do just this for you - provide you with virtual mailing address and do the paperwork for your company for some not very high yearly fee. Google it.
Or you could just, y'know, tell us, since you came to a forum to ask for help, and we're asking you for some more information to be able to help you. I don't have the time/effort/resources/desire to visit you in whatever country you're in and... do whatever you're concerned about...
@rds100 that's a nice guess but not true.
I already googled it 400 times in the last 3 years. But it seems to be for billionaire businessmen laundering millions. (The ones in BVI, Hong Kong, etc) The ones in UK on the other hand, like ukplc.net kinda seem like they leave you with an unfinished service. They don't seem to be giving out a direct price on opening up UK bank accounts, which is the main deal. Also EU VAT for customers is a bit irritating.
@Damian Bro, you're being curious for no reason
It's not important, you know it's not in the US or in the EU. This is enough info for incorporation advice.
If you're going to become a corporation, you need to be willing to give out your details to people. I would never buy a service from a host who wouldn't give his name/address - if he doesn't trust me, why should I trust him?
Any reputable provider, and certainly any NEW provider trying to establish a reputation, has every reason to at least give out a mailing address.
@Akira in UK you would have to be VAT registered and charge VAT only if you make more than 76000 GBP yearly turnaround. At which point you would already have enough money to incorporate in HK for instance.
I was mostly curious on what country has incorporation that's $1000 that you're calling expensive. Takes money to make money.
You should incorporate in Antarctica.
@lvraatiems Am I selling a host right now here on this forum? I don't need to be transparent or anything like that while I'm chatting with people. Please do tell if there's anything you want to say on my question. Please stop destroying the discussion with unrelated personal stuff. Thanks.
@Damian Well, UK incorporation seems to be about 30 pounds (+extras), so a grand kinda looks crazy in this situation. Other annoyances with my country do exist like I said earlier, 100 dollars each month in accountant fees...
So, this question is stupid then.
What's the deal with telling us the country? ¬¬
@Akira I'm not "destroying the discussion" - I've pointed out something very important you'll need to consider if you want to create a hosting company, which, judging on your multiple posts in this forum about how to create a hosting company, looks like something you want to do.
You don't have to take my advice, or even reply to me, but I believe my post was both on-topic and relevant to your specific issue.
-
Totally agree.
Creating a company... and hiding. Sounds fishy n_n
@yomero Yeah, pretty much.
@Ivraatiems OK, you're not destroying it, but not being very helpful either. As I'm currently not selling any servers under this nickname, it not important for me to share that info. If I were to sell hosting services, my website would have a company name and a telephone number. Do we have an understanding?
@yomero I think you're just trolling with your most recent comment...
OK, so far only option pointed out by you guys was UK for having some advantages...
Advantages:
a) Acceptable taxing
b) Cheap incorporation at 100 USD max. via various "incorporation specialists".
Disadvantages:
a) VAT for EU customers
b) No info on how to file tax returns
c) Low info on how the situation is for non-citizens/non-residents
d) Possibly tricky situations while opening a bank account.
As I said VAT should not be an issue for a small company.
OK, here is another idea for you: Panama http://www.webhostingtalk.com/showthread.php?t=1146072
Some popular choices used for tax evasion:
Isle of Man
Costa Rica
Panama
....I think you get the idea.
One of the issues with Turkey is due to their intense financial restrictions, international trade is difficult, and moving money in/out is difficult.
Probably the USA is the best country to incorporate in for easy access to international trade and international financial institutions & transactions. UK would probably be #2 since their system is closest to the US system.
Personally, you should incorporate in whatever country you are doing business in. If you're in Turkey but you have servers in USA, you should incorporate either in Turkey or the USA, or even both. If you have servers in Europe, incorporate there, etc.
We are getting ready to form a company in the UK to handle our European operations (instead of selling EU assets via our US entity), while maintaining our US company for US operations. This dramatically simplifies the paperwork involved.
@ramnet the countries you mention have excessive prices I think.
Also I was thinking about quite the opposite. I thought if the company was in a country where the most important western customers and the main providers the company would have to buy stuff from weren't in, nobody would have to pay stuff like VAT and similar ones.
For an individual in Germany, it's more advantageous financially to shop from for example Iceland instead of the Netherlands. As the individual wouldn't pay VAT.
In theory even if you have a company in Panama that sells services in France you would still have to charge VAT from EU customers.
However, for a business owner, it's easier to run your business in the same country you offer services from.
An extra advantage of this is, say you sell services in Holland and services in the UK. By setting up 2 local companies not only have you made managing your business easier, you have doubled your VAT allowance (each company has it's own VAT limit, stay below the limit in each company, you pay no VAT).
You also have to keep other things in mind, like getting bank accounts for your company. If you primarily sell services in the EU but your customers have to pay you in the Icelandic króna, this adds to your merchant fees doing currency conversion, and you have to worry about currency fluctuations a lot more when you are figuring out your local tax return for income paid to you from your foreign company, not to mention how much to charge clients, etc etc. A lot of countries also have limits on how much money you can take in and out of a country (and some of these limits are extremely low), which is extremely important if you run an international trading company.
One of the other reasons we are setting up UK operations is so we can stop worrying about currency fluctuations between the USD, GBP, and EUR. If you're from the US, getting a business bank account in Europe (denominated in EUR/GBP) is very difficult unless you establish a local presence. We have seen very wide fluctuations in currency exchange rates. Charging your clients in one currency while paying your suppliers in a different currency is never fun. Add paying yourself in yet another currency into that mix and it's a big mess.
Is there a way you can avoid incorporation? Like limited liability company. This way you don"t get double taxed.
Big companies such as BMW use llc.
Additionally, if you're that concerned about paying taxes, you may want to reconsider going into business at all.
Double taxation is not linked to incorporation. Double taxation can only be circumvented by double taxation treaties between coutries. But to archieve this, your bookkeeping must be transparent to both countries: your resident one and the one of the corporate seat.
^^ huh
If you are a corporation then you have to pay both personal income tax and corporation tax.
That is not double taxation. Doube taxation is if the same subject is taxed multiple times the same tax. You are speaking of different subjects being taxed: the natural person and the company or different taxes being levied. Therefore, it depends which type of company you incorporate in: sole entrepreneur, partnership or company (llc, jsc). Taxation is different there.
But double taxation is only an issue with cross-border issues in this sense :-)
@nabo I was just writing a comment about you two talking about different stuff, seperation of personal and company tax is the problem in the US with the seperation of tax-paying of the company an the owner (director?) of the company. LLC and S Corp have some difference at that I think, I read sometime ago but don't remember as I'm not interested in US incorporations.
The actual double taxation issue isn't a problem with the case we're talking about, right?
BTW, I can't believe the title I put on this discussion, I meant "Which country to incorporate in"...
Double taxation is always an issue if you have a cross-border case. It seems that you want to commit business in a country different from your personal obode. This means that your home country does tax according to your world-wide income and the country of the company does tax. If you then want to transfer income from the company to you, this is being taxed at the source state (company seat) and your home state. This is what double taxation means.
Delaware (yes, even if you're not in the US).
Paid ~$600 and then $250/year
Why? No income tax if your doing business outside the state.
You should talk to a business attorney and a accountant. Depending on where you are actually doing business there are often law which you need to follow even if your incorporated as a IBC or foreign entity of some sort. eg. allot of people choose Delaware but don't realize that if your primary office is in another state you are often required to follow the rules of the state of your primary location.
Theres so many factors and volumes of laws and tax codes that apply I don't think a forum is the best place to make a decision.