I am starting a global e-commerce business - what are the benefits of registering in a tax haven?


2

Which tax havens would you recommend for this and why? When should we register - early on or once we are earning a certain amount?

Ecommerce Tax

asked Feb 24 '11 at 21:48
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Nikolay Piryankov
683 points

2 Answers


3

and welcome to this community. :-)

Your question sadly cannot be answered in its current form.

If you set up a corporation in a tax heaven, then you may indeed save on corporate taxes. On the downside:

  • Perhaps some potential customers won't buy from you, because the customer rightly fears that your offshore jurisdiction places him in a bad position with regards to warranty claims, credit card refunds, etc.
  • The tax auditors where you live might take a keen interest in you, because offshore jurisdictions have a bad reputation with tax auditors.

Have a look at some of the past answers on this site:

After reading a bit, if you are still considering this, go see a really good and honest tax adviser (say, a chartered accountant who specialises in international tax law) and who knows the tax law of your home country by heart. You really, really need the services of a skilled specialist if you're considering this, the tax laws in most countries are famously complex.
answered Feb 26 '11 at 09:19
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Jesper Mortensen
15,292 points
  • Thank you, I've edited the question and looked through the links you posted (it took me on a bit of a journey). – Nikolay Piryankov 14 years ago

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If your business is in the us, you have to main tax issues to be aware of.

  1. is sales tax. You want to be in a state such as Nevada that has no sales tax. If you are selling a product to california that is say $1000, the tax could be a deal breaker. Your customers only pay this tax if they are a california resident buying from a california company. Since you are a nevada company you would have no tax.
  2. You want to be in a state that has low income taxes (state income). I say be in a state that has a very low cost of living. Nevada is again a great choice, no state income tax, very low cost of living. This allows you to save money on your taxes from the income on this venture, plus lower paid employees are going to be a lot happier because they could afford a more decent style of life.
answered Feb 26 '11 at 08:35
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Frank
2,079 points

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