I am wondering which are good locations to set up a web company. Here are some factors:
-All jobs will be outsourced
-Revenue will be from ads and virtual coins which will be purchased by Facebook users by using PayPal and other payment option
-Almost all capital will be kept inside the company for growth purposes, so I am not looking for solutions how to avoid personal taxes as I won’t pay out money for my personal requirements.
Probably the best option would be off shore, but which one? As I know, taxes need to be paid in a country where servers are located. So this is another factor to consider.
Any comment, idea or suggestion would be great. Thank you!
A common tax avoidance scheme is known as the “Double Irish” with “Dutch Sandwich”.
It involves setting up two companies in Ireland (one with an office in Ireland and the other with an office in Bermida) and another company in Holland.
The first Irish company makes all the income but pays most of that as overhead to the second Irish (holding) company which since it actually operates out of Bermuda is not liable for tax. The money can’t be paid directly from the one Irish company to the other or it would be subject to Irish withholding tax and so a Dutch company is interposed between the two.
This is perfectly legal and is the way that big companies such as Google and Microsoft avoid tax on the vast majority of their income.
The reason big corporations have these international entities set up for taxes, and your neighbors don’t, is that they cost a significant amount of money to operate. These companies have real businesses with physical offices in those countries and spend millions of dollars a year preparing their financials to get them to work out that way. Only once you’re rich can you afford to be even richer with a scheme like this.
I’d suggest talking to a local accountant and getting their advice. It’ll probably be a lot less complicated and still save you money.