high risk payment processor or start a company in europe?

Yes, the problem is that by law, you can only process payments in the US as you are a US company. I am not sure where you live. But is you live in Europe and need to pay tax on your US turnover, you need to register your company at your place of residence, you can then apply for a European processor.

In all other cases, you need to do it like all US companies processing large volumes in Europe and have an Irish company processing payments for you.

Also note that you would have to charge and remit VAT on all your sales.

Are you making 80k USD in 6 months? That is very, very low and not many processors will have big interest in you. To be frankly honest with you. In any case, you may want to register an Estonian or Irish company as Lori Payment Services Limited and then use them to process payments. It has a big overhead and really only makes sense for 1M or more annually. But if you have spare time, you can do it yourself and you may find yourself in peace.

You can make it very simple with a UK LTD - and where in the law does it say he is only allowed to process payments in US ? interesting ?

DeepDrilling said:

You can make it very simple with a UK LTD

It does not make much sense as the payment fees are higher than EU and and EEA payment received will be considered cross-border and cost both him and his customer up to 3%. An Estonian company does not cost much more than a UK company if he manages it himself.

https://usa.visa.com/dam/VCOM/globa...ding-proper-location-of-merchant-business.pdf

If you provide merchandise or services via mail, phone, in-app or the web, then your location must be the country of your principal
place of business.

In reality, no serious payment processor will accept you for a EU merchant account just because you are targeting EU customers. There are exeptions but without any registration of your business, you won't get far in Europe.

DeepDrilling said:

and where in the law does it say he is only allowed to process payments in US ? interesting ?

It is a visa / mastercard rule. You can only have a merchant account in the country your company is registered. Only exception is that Canadian companies may process in the US under cetrain circumstances. That's why all bis US companies are processing in Ireland.

daniels27 said:

It does not make much sense as the payment fees are higher than EU and and EEA payment received will be considered cross-border and cost both him and his customer up to 3%. An Estonian company does not cost much more than a UK company if he manages it himself.

say what? where do you have this information from ?

daniels27 said:

It is a visa / mastercard rule. You can only have a merchant account in the country your company is registered. Only exception is that Canadian companies may process in the US under cetrain circumstances. That's why all bis US companies are processing in Ireland.

you said by law, I'm very aware of that it is a rule by the card association, but it could be that you have found a new law in the US, no one knows.

And to archive the Visa / MC regulations you can simply use a 1£ UK LTD no need to make it much more complicated than this!

DeepDrilling said:

you said by law, I'm very aware of that it is a rule by the card association, but it could be that you have found a new law in the US, no one knows.

Laws of Visa and MasterCard. But from that perspective, you are right. No government law afaik. Thanks for pointing that out.

DeepDrilling said:

And to archive the Visa / MC regulations you can simply use a 1£ UK LTD no need to make it much more complicated than this!

Yes, you can but when you have a UK processor, which costs more than a EU one.

Last edited: Jan 19, 2025

DeepDrilling said:

say what? where do you have this information from ?

Sorry, which information do you mean?

1. The Estonian company costs about 100 EUR yearly. UK companies are about in the same order.
2. EEA has lower interchange fees than UK has. You can get better pricing for EEA companies than for UK ones in gerneral. In any case EEA-UK and UK-EEA is considered cross-border and you as well as your clients may be subect to a surcharge.

loti said:

I don't worry too much about VAT, if the processor allows it, I'll charge it to the users, since 90% of my site users are non-EU customers, when they enter their non-EU billing address, they will not pay any VAT.

You mean they are Germans but you tell them to enter an address in the Bahamas to avoid being charged VAT even though they are using a German IP and use a German debit card?

Fairly illegal, read 2.1.3 here
https://taxation-customs.ec.europa....information_microbusinesses_euvat_2015_en.pdf
You need to have two pieces of non-contradictory evidence of the customer's loction. His nullshit address in Pitcairn or North Korea is most likely fake.

If you get a European payment processor, you should start charging. Check CESOP.

daniels27 said:

Sorry, which information do you mean?

1. The Estonian company costs about 100 EUR yearly. UK companies are about in the same order.
2. EEA has lower interchange fees than UK has. You can get better pricing for EEA companies than for UK ones in gerneral. In any case EEA-UK and UK-EEA is considered cross-border and you as well as your clients may be subect to a surcharge.

I'm not talking about an Estonia company, that's you bringing it up, if you even read what you're writing in your eagerness to boost your post count!

I'm talking about a UK LTD, where you can get the same processing rates and fees as with any other company in Europe.

The UK is not in the EU, but as far as I know, it's still part of Europe, meaning you have the same opportunities.

Where did you get that nonsense from in point 2?

loti said:

no i wont tell them anything. it's just the truth, 90% of people who use my ad site are south americans, they usually come to europe for a few months to work as escorts and then go back to their country.

Ok, thanks. Now, we get a more complete picture. In this case you don't need to care as they will be using South American cards. Also, you won't have to care about the customers losing money on cross-border fees with their credit card. Just use a UK Ltd. or Estonian company for payment processing. You can basically forward all charges with a deduction of anything less than 2% on the net payout to your US LLC. Pay some tax on 1000 EUR per year, not more.

DeepDrilling said:

I'm talking about a UK LTD, where you can get the same processing rates and fees as with any other company in Europe.

The UK is not in the EU, but as far as I know, it's still part of Europe, meaning you have the same opportunities.

No, the EEA rules no longer apply to UK. Hence:

Over the course of 2021 and 2022, Mastercard and Visa raised their cross-border interchange fees fivefold from 0.2% to 1.15% for debit cards and 0.3% to 1.5% for credit cards. The PSR finds that this was harmful to the interests of UK businesses and ultimately their customers.

There is now a new law in place in the UK limiting fees again since December 2023. However, cross-border transactions typically are not part of those agreements, meaning that Visa and MasterCard can pretty much charge what they want. It ultimatively is up to your negitiating skills what deals you can get. But in general, you can lower processing fees in EEA like Germany, etc. than you do in the UK.

@deepdriling why attacking me? This is a discussion about facts. Have I ever attacked you here?

loti said:

yes the idea is exactly this, have the company in Europe and forward the charges to the LLC.
at this point I just have to evaluate which could be the simplest company to open and manage without too much bureaucracy

You may also want to check where you can get what deal on processing fees. With 80k per month, you may be able to get under 2% for cross-border.

What currencies are you invoicing in? Note that you can easily lose another 3% on fx if you are requesting payout in another currency than your companie's country currency.

Estonia would be an option. UK with stripe would work to it they like your website (tip: they only check once).