Which country should I form my company in...?!

[treinjapan]

Hello Fastlaners!
Just looking for advice, particularly if any of you have experience in international business.

I live in Japan and I'm running a business, but all of my customers are from other countries, and the income is all in USD. But I think since I'm operating in Japan I will eventually need to pay taxes here. And since I'm American, I'll eventually need to pay some taxes in the US too...

I've heard that US tax law is much more lax and flexible than Japanese tax law though. Though it seems more complicated to make a US entity that has a "branch" or functions in Japan, it might be more beneficial in the long haul.

Here's the website:
www.JapanWifiBuddy.com
We rent out pocket wifi routers to traveler coming to Japan to help you stay online wherever you go. The wifi infrastructure here sucks, and when you do actually find it, you usually have to install shady apps on your phone and go through a lengthy registration process. Not so convenient when you just want to check a map or email for a minute.

Thanks for any input!

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[GlobalWealth]

Short answer.

Do it offshore in a tax haven country. No corporate tax.

As a Japanese resident, you will likely owe tax on income you receive in Japan. You can pay yourself only what you need to live and leave the rest offshore tax deferred.

As a US citizen/non-resident, you can easily qualify for the FEIE (foreign earned income exclusion). You can earn about $100k without paying tax to the US plus about a $50k housing deduction - so about $150k tax free.

 

[treinjapan]

Are there rules about me having to apply to the Japanese government since I'm technically running it in Japan?

 

[GlobalWealth]

You need a local accountant for that question. My area of expertise is international business, corporate services and structuring.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[treinjapan]

What are some of these tax haven countries you normally suggest?

 

[GlobalWealth]

We do almost all of our offshore corporations in Anguilla or Seychelles with Belize as a distant 3rd.

My offices are in Anguilla and Belize with a representative office in Seychelles.

 

[RazorCut]

I have been thinking about the same issue as I get closer to setting up my next enterprise. I live in the UK but most of my business will stem from North America. Was thinking it would make most financial sense to base it offshore and only bring into the UK what I need.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Coalission]

As a US citizen/non-resident, you can easily qualify for the FEIE (foreign earned income exclusion). You can earn about $100k without paying tax to the US plus about a $50k housing deduction - so about $150k tax free.

Just moved to Panama for this very reason, and it's actually higher for us because my business partner/wife gets her own exclusion, and our LLC splits the profits down the middle, so it's really double the income exclusion, and then one housing exclusion. At least that's how I understood it. Either way, most if not all of our business is outside of the US so it just made sense.

 

[GlobalWealth]

@coalisson, I hope you got some advice on this because there are a few loopholes you need to take advantage of. Most people don't do it right unless they are experts.

 

[Guest12120]

@GlobalWealth
Would I qualify for this exclusion, if I'm an American citizen living in Poland and my income is made from my US registered company selling on Amazon?


Sent from my iPhone using Tapatalk

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[GlobalWealth]

@GlobalWealth
Would I qualify for this exclusion, if I'm an American citizen living in Poland and my income is made from my US registered company selling on Amazon?


Sent from my iPhone using Tapatalk

Possibly. But you would likely need to restructure your business to ensure your paycheck comes from a non US source.