How much will you pay in tax?
Does opening an offshore mean never paying taxes again? The answer is not so simple. There is an enormous difference between "zero tax" and "zero cost". If you want to play the international game, you need to understand how the tax authority sees you in the USA, the United Kingdom or Hong Kong. Let's talk about real numbers.
0% Tax Jurisdictions
There are countries that do not tax foreign-source income. If your company in Nevis or in certain Caribbean islands does not do local business, your corporate income tax is zero. But attention: this does not exempt your companies from declaring in Brazil.
The benefit here is deferral and capital accumulation, not fiscal invisibility.
Territorial system: the case of Hong Kong
Hong Kong is the king of territorial taxation. Their government only wants to know about the profit you generated within the territory of Hong Kong. If your client is in Europe and your operation is global, your tax there is zero.
That's why Hong Kong is the crown jewel for international traders and consultants.
Franchise tax in the USA
In the United States, in states like Delaware or Wyoming, you may not pay federal income tax if you are a foreign LLC, but you don't escape the franchise tax. It is a fixed annual fee for the privilege of keeping your company active.
It's the price of maintaining your protection in dollars.
VAT and sales tax
Finally, be careful with consumption. If you sell digital products or services, you may have to deal with VAT in Europe or sales tax in the USA. This does not apply to your profit, but to the sale. Whoever pays the consumption tax is, effectively, the client, but the entity responsible for the collection and (extensive) accounting obligation is the company.
The Startaway Difference
Have you ever imagined what happens when you chain different legal natures (LLPs, LLCs, funds and foundations), in different jurisdictions (USA, Canada, United Kingdom, Caribbean, EU and Hong Kong), in multiple layers, the results are surprising! And that is exactly the Startaway specialty!
At Startaway, we design your framework so that you know exactly every cent that will leave your cash, without surprises at the end of the year.
