Thank you for the great response @Sols !
Sols said:Where are you or the majority of the decision-makers (not nominee directors) based? Whatever structure you go with, it has to be compliant with the laws of where you live.
Hmm that is complicated. For simplicity on paper we'll just say Singapore and leave it at that. The rest of the crew will labeled as be contractors.
Sols said:You can be sued in Singapore and Hong Kong as well. That risks exists practically everywhere. You'd be looking at a jurisdiction like Nevis if you really want to avoid lawsuits, but then payment processing becomes a big pain. Lawsuits are best avoided by not creating a situation in which someone wants to sue you.
Yeah, its just that US has a culture to be lawsuit happy compared to other parts of the world. We're at the whiter side of gray, but still at gray. And I don't expect any one in any other country other than US would even consider sueing us.
Sols said:I'm not sure who told you that digital services don't need to collect VAT, because that's not the full story. It's easy to avoid, especially for a small business. But if you get into millions of EUR per month, the EU might wake up and use its legal powers to compel you to pay VAT. Enforcement is rather lax for now but if you look around, you might notice several online SaaS/software vendors outside EU charge VAT to EU customers.
Actually, many lawyers and accountants did say that we have to collect VAT for every single country who requires it. However we have customers from over 100 countries in the world, it's just not feasible to do that.
More woke tax people say that as a non-resident business, countries and states usually have a threshold before requiring to register. I believe it is about $50K-$100K/year in majority of countries/states.
So as long as I'm not making that much from a single place, I have no problem. Currently I am very far away from those thresholds.
Also apparently, there are many many legit businesses who make 10x more than the threshold in certain locations and have still not registered for VAT and haven't been enforced to do anything. I'm going to use the same strategy: "Not worry about it until a country comes up and requests their taxes, then pay up".
Is my knowledge correct? Does this sound like a good idea?
Sols said:Hong Kong is a tainted jurisdiction now due to the Chinese influence.
Yeah I agree. I wish it wasn't the only legit jurisdiction where we can both get payments processors and 0% offshore tax.
Sols said:From the options listed, I'd say Singapore but be very careful of BEPS regulations before you start creatively invoicing money out of the company.
First time of me hearing BEPS. Will research it!
Sols said:No one will care while you're small but it's once you get into the millions per month that tax authorities start taking a look at you. Singapore doesn't want to be an old-fashioned tax haven. It wants to be a competitive financial services and business hub.
From these options I believe you're for "3. SG with HK consultant"?
If we have different payment providers, such as, 1. Stripe, 2. Paypal, 3. Bank ETF, 4. Appstore.
Would it make sense to break these into different companies, to stay under the millions per month limits? (SG audits after $10M SGD yearly)
Sols said:Your chances of getting a bank account in Singapore (and Hong Kong) need to be measured within the onboarding principles of these banks there, which typically includes a high deposit or close connection business partners (customers, suppliers, investors) in the region.
Can easily deposit upto $100Ks to a good bank. And owner is SG resident, with personal bank account. Will be able to visit banks physically.
