Good resources on offshore incorporation (taxes, legal work,...)?

https://news.ycombinator.com/item?id=12805

by gommm • 19 years ago

5 9 19 years ago

news.ycombinator.com

gommm3• 19 years ago

Hi, Does anyone know any good resources on creating offshore companies? I live in japan and want to create a startup targeted at the japanese market but, being a foreigner, creating a company here is too difficult (I would need to invest at least 30 000 dollars and have 2 japanese employees)...

I was thinking about incorporating in hongkong, but I find it rather difficult on getting reliable and non-biased information on the process, what taxes I will need to pay, and so on...

So if anybody knows anything about it, I would be interested.

For a momment, I also considered incorporating in the us, but since I am not an american citizen, I thought it might also be difficult and it seems there would less problem with software patents in a company in hongkong (could anyone confirm this?)

c1sc0• 19 years ago

What about those Delaware incroporation sites? (Google for it). Are those scams? I don't really want to incorporate in Europe because the paperwork just drives me nuts.

gommm3• 19 years ago

Well from what I read, taxes regulation are about the same for any state in the us (so you could incorporate in delaware or nevade...)

As for those incorporation sites, I did see them but the problem is that they are hardly a really non biased resource on the matter... I would love to find a book telling me the different implications (tax, legal, ...) of incorporating in one country or another...

MEHOM• 19 years ago

Some European countries like Norway are designed for rich companies like the Rolling Stones. If one has the money and the A+ caliber lawyers, it is a piece of cake.

waleedka• 19 years ago

A key point to consider is that regardless of where you incorporate, you still have to work within the legal framework of where you're doing business. For example, if I incorporate in Nevada or Delaware and I'm located in California, I have to file paperwork with California to get permission to do business in the state, and I have to pay California taxes. Check with a local attorney about Japan's legal requirements for foreign companies to work locally. And, if it satisfies your needs, then Delaware and Nevada are good options. I used corporate.com and I'm happy with their service. Of course, they'll only do the basic filing for you; after that you still need to do more paperwork, especially around taxes.

corail• 19 years ago

From my understanding, as long as the what is sold is immaterial (e.g., membership, software) and doesn't need to be sent to a specific address, you don't need to register as doing business in the country where the good is sold.

So in this case, I think that he might not need to register for doing business in japan if he's not selling any tangible thing...

I'm not so sure though since I don't know how it is in japan.

BitGeek• 19 years ago

If you're running a web based business (eg: not a retailer, but where everything is an online service) then the domicile of the business is the web, not any nationality. In other words, you can incorporate anywhere you wish and its legitimate- the act of incorporation creates the domicile for the business.

If you're going to do business in Japan to the point that you have above ground employees (taxes, social security, etc.) then you'll have to find out the Japanese laws. Even then it probably makes sense to incorporate outside of Japan for tax reasons. A foriegn corporation operating in a country is generaly treated differently (and better) than a domestic corporation.

But, if not, then you can incorporate in any jurisdiction which is friendly to corporations.

I would strongly recommend you do not incorporate in the US. The USA is not a friendly jurisdiction for corporations and all the trends are that it is getting worse. Ths US has enacted currency controls, limiting ones ability to move money in and out of the country-- this is the first step in the creation of an "iron curtain". (Requiring passports of people who travel, as the US started doing in January is the second step.)

It is only appropriate to incorporate in america if your business is completely located in america. (If you want to find out what your government does all day, just file business papers in many states- over the next 6 weeks you'll get contacted by many dozens of different agencies, all of whom want you to do paperwork and give them money. Texas is an exeption to this, Nevada may be as well.)

Ok, on to the real advice-- look at countries that are pro-business, or who are, or used to be tax havens. The caymen islands and bahamas are obvious choices, but also st kitts and nevis are worth checking out. You can legally incorporate there. Some of these islands have restrictions about the business you can operate there, but are happy to incorporate foriegn businesses (that is to say, its easier if you'll not be opening an office on their soil).

Along those lines- ex UK protectorates, consider the Isle of Man (or is it the Isle of Wight?) and closer to home, New Zealand and Australia. These latter two are high tax states, but are closer and may prove to be good choices for you.

Also consider the united arab emerites, monaco and Mauritius. These are a different style, but they may prove to be good places.

Finally, probably the best place to incorporate is Panama. Their government is oriented around providing services to foriegn industry... starting with the canal, but also ships registry, bank registration, incorporation and trust services, etc. This is probably one of the easiest places to do it.

If you're planning to bank outside of Japan, you might consider incorporating in Switzerland, so that your corporation and your bank can have closer ties. But I haven't looked into that much.

Its hard to find good information on this subject, probably because US courts have thrown people in jail for giving "Advice on how to avoid US taxes"... so, while this isn't a tax dodge (you're not a US citizen) people are wary of talking about it.

gommm3• 19 years ago

Thanks for the information.... It would be so great if I could find a book that details the differences between the different countries.... The only reason I was considering incorporating in the us is because the cheap credit card handlers like paysimple or google checkout only work with us companies... But I guess taxes would probably offset the savings...

Now I really need to find a book on this...

Good resources on offshore incorporation (taxes, legal work,...)?

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