What are the tax implications for foreign companies with operations in the US, specifically New York?
Posted on January 2, 2009 by admin
Marcus asked:
I am in the process of setting up a web-based business, which I will probably incorporate in an offshore tax haven to avoid a lot of tax and admin. I will be looking to have a permanent base of operations, though, probably in New York, and was wondering about what I will need to do and how I would be taxed.
I am in the process of setting up a web-based business, which I will probably incorporate in an offshore tax haven to avoid a lot of tax and admin. I will be looking to have a permanent base of operations, though, probably in New York, and was wondering about what I will need to do and how I would be taxed.
I would like to just set up a place of operations in the US, not a separate company. By this I would declare that the premises used for the business operations were for that purpose, but that there was not in fact a US company. Is this possible, or would I be required to incorporate in the US as well.
Would it be possible to avoid corporation tax, or would I say need to pay corporation tax on all the pay that was sent out to US citizens? (Otherwise I would pay them directly from the offshore bank account.)
Are there other tax implications / fees to think about (other than the obvious business expenses)?
Thanks in advance for any responses.
If you set up an operation in the US, you will need to register in the US and in any states where you have revenue – and yes you’ll need to pay taxes like the rest of us on any revenue generated from your US operation.
I am not holding myself out to be a lawyer or financial advisor. I am just a business guy who has seen it all offshore speaking. So don’t take this as tax or legal advice. That said here what you need to know.
1) Bearer share corporations (like in Panama) are owned by whoever holds a few sheets of paper. Ownership can literally be changed in seconds. If you had 10 people in a room and passed an envelope around the room with the share certificates inside, ownership would change 10 times in about 1 minute! This kind of flexibility is key to any planning you might do.
2) Bearer share corporations in panama can have a bank account!
3) My humble opinion is that you should own a US corporation that is an order fulfillment center. It will take orders, process orders, and deliver the product by whatever means you wish. Business like this often make little profit. You would, of course, pay tax on any amounts earned by this corporation.
4) It could be that a Panama offshore corporation could hire your order fulfillment corporation.
I would read all about offshore banking here: