canadaI’m running a small web-development company, all of the workforce is scattered around the globe, and there is no physical office.
Company is registered in my country of origin. Problem is that high tax rates are choking us, and since we don’t have office or local sales force it’s unclear to me why we are paying such high taxes (about 20% on salary paid to any freelancer, and 38% on company profits).
I’ve been reading about BVI and offshore possibilities, but they look shady, and we have nothing to hide!
I’m really interested in Canada, especially LP as it is non taxable entity. Non-residents can open company their and enjoy paper-work-less existence.
I’m curious if anyone has experience doing this, and how it all works.
This is the offer I’m considering: http://www.apintertrust.com/incorporate_in_canada/limited_partnership_in_canada_for_nonresidents.htm
Short version is: avoid doing so in my opinion. Some related reading on the topic:
https://startups.stackexchange.com/questions/6221/what-major-things-to-consider-when-starting-a-company-overseas-without-being-phy/
https://startups.stackexchange.com/questions/1592/tax-structuring-how-to-pay-no-corporate-tax/
Also, double-check with an accountant that you should be paying 38% on profits and 20% when paying freelancers. The first figure seems crazy high. The second makes it sound like you’re paying them salaries as if they were employees - whereas they’re contractors and should be responsible for paying their own taxes.
All content is licensed under CC BY-SA 3.0.