Living in Europe, having offshore in USA and selling Apps on Apple Store
Hi,
i am selling apps on Apple Store and i registered my self as individual/sole proprietor in iTunes connect.
From the whole revenue i would have to pay 50-60% taxes and insurence in my country, so i am planning on opening offshore company in Delaware. Bank account somewhere in europe. I am going to be beneficial owner
Questions:
1) If i open offshore company and provide information to apple, about changing the organizational name (company), are there going to be some problems? Some tips?
2) With having a company in delaware, may i sell apps in the USA?
Of course you will be paying US taxes. Not "in addition". You will be paying US taxes first and then in addition taxes in your own country.
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Of course you will be paying US taxes. Not "in addition". You will be paying US taxes first and then in addition taxes in your own country.
Country is Germany.
What taxes do you mean, fixed one or variable one, that depend on revenue?
Because as i know that apple is located in Luxembourg i would like to know if i sell apps in USA, am i doing something agains the law or that's apple problem?
What taxes do you mean, fixed one or variable one, that depend on revenue?
Because as i know that apple is located in Luxembourg i would like to know if i sell apps in USA, am i doing something agains the law or that's apple problem?
I am also a developer from germany, but my tax rates are much lower then 50%. Do you have an accountant who is doing your tax work?
If not, you should get one, because there are many ways of saving taxes.
If you have any questions, just drop me a pm.
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If you make an LLC in delaware, you don't pay taxes in the state, but you have to pay federal taxes as far as I know.
I was also thinking about it, because in the US the federal taxes are still much lower, than in europe.
And no, you don't pay taxes in Europe if the money is not coming to a european bank account. You may pay taxes for you as a person if you declare your income/revenue that you take out from the company and transfer to a european bank account.
I wouldn't transfer the money to a german bank. Open a bank account in the US and use your credit card to spend the money.
In any cases I would also advice to get an accountant.
Why don't you guys open an "offshore" corp in UK or Cyprus?
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If you make an LLC in delaware, you don't pay taxes in the state, but you have to pay federal taxes as far as I know.
I was also thinking about it, because in the US the federal taxes are still much lower, than in europe.
And no, you don't pay taxes in Europe if the money is not coming to a european bank account. You may pay taxes for you as a person if you declare your income/revenue that you take out from the company and transfer to a european bank account.
I wouldn't transfer the money to a german bank. Open a bank account in the US and use your credit card to spend the money.
In any cases I would also advice to get an accountant.
If i open an account in Delaware, may i still sell apps in USA?
What is the difference between opening an account in europe and in the USA? That is company account and taking money from it shouldn't depend on the country where is the bank, or i am not not right?
Of course you can sell in the USA. Why couldn't you?
I don't know if an US based company can have an official bank account in europe. I doubt that badly.
Even if it can, having a bank account in the EU receiving payment from Apple regularly will put you in front of the tax office of that country for sure. I don't know, but I would assume, that the tax office is not a bunch of idiots and they WANT your money if it is in their country.
I know, if I would make an offshore LLC in Delaware, I would open a bank account there too, because it is more effective to have everything in the same place.
It is a bit vague, but as far as I understand, if the LLC has only one owner and you don't do business in the US (whatever that means), you don't even have to pay federal taxes. I don't know if selling apps through iTunes means "doing business".
Get an US accountant. He can answer that for sure.
Promo, here is the problem with opening a US company. If you are not US citizen or green-card holder, then you cannot "work" for your company. You can be only a "passive owner". "Passive" means you can't be involved in day-to-day operations. Strictly by the law you must hire some CEO (or sponsor yourself a work visa) to work for your own company.
IRS and the state don't really care about this. Your business operates, you pay taxes - that's all they care about. But you might get in trouble with immigration authorities who may consider your activity as "working without authorization" and cause you all sorts of headaches.
That's why everybody suggests you to partner with somebody who is a US citizen (or green-card holder). You make him "CEO" of your company and then you can always claim that "he is the one who is working, I'm just an owner". Of course it needs to be somebody who you really trust, because he can screw you financially easily.
Opening a business all alone in the US without work authorization for a foreigner can be very tricky.
Actually I'm thinking registering a business in UK or Cyprus... Delaware can be tricky too. They have franchise tax which actually can be higher than in the other states. Companies register in Delaware mostly because of their legal system, it's much harder to sue and prosecute a Delaware corporation. A single person can register a C-corp in Delaware. All sorts of Internet fraudsters are registered in Delaware.
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I was investigating delaware as an option and I looked up official state sites too and as far as I understood, in delaware you CAN have a one man show and you DON'T HAVE to be there personally.
You just have to have an AGENT, which is NOT a CEO!
I looked at all registered Agents and Valis seemed to be the most trustworthy and affordable. However I never contacted them, so I don't know how they operate.
I was investigating delaware as an option and I looked up official state sites too and as far as I understood, in delaware you CAN have a one man show and you DON'T HAVE to be there personally.
You just have to have an AGENT, which is NOT a CEO!
I looked at all registered Agents and Valis seemed to be the most trustworthy and affordable. However I never contacted them, so I don't know how they operate.
Let's clarify this. Don't confuse the state government and federal.
From the State of Delaware point of view:
1. Yes, you CAN form a C-corporation alone in Delaware (you can't in California, for example - it's gotta be at least 2 people).
2. Yes, you CAN have an agent to form a company and you DON'T HAVE to be physically in the US.
3. Yes, you CAN have an agent who will work for you.
I'm talking about how the company is gonna be operating. Forming is easy. Operating it can be tricky (I'm not saying impossible). Once you formed the company, here is what kicks in:
From the Federal government point of view: (states don't care)
1. You CANNOT perform day-to-day operations without work authorization, so you need to hire somebody. What they will consider "day-to-day operation" is grey area.
2. Every corporation needs some CEO and CFO (it can be anybody). You can hire agents all you want to do whatever the work, but there needs to be some financially responsible officer.
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"you should be able to get them to open an account for your Delaware LLC"
See the tricky language? "should be able to"... yeah... you should be able to fly to Mars too. HSBC (and any other bank) can easily refuse to open a US bank account and that's gonna be it, you'll have to come to US physically.
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HSBC (and any other bank) can easily refuse to open a US bank account and that's gonna be it, you'll have to come to US physically.
That was never the question.
I tried everything and I KNOW that I have to go to the US to open a bank account.
But I don't have to be there to operate a company.
And selling on the internet is IMHO no day-by-day operation, because you don't need anybody for doing that. You don't need an office, you have no physical product etc.
I think, it is even explained on the Valis site.
Btw I already have an EIN (Employer Identification Number) and ERN received by phone and internet although I never was in the US (I was, but in 1995 as a tourist) and I have no company there.
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Last edited by Promo Dispenser; 01-22-2012 at 05:25 PM.
If the guy is smart, he should write his company on the Seychelles, have the banking in Switzerland and use "no-name" debit cards for cashout if he wanna go totally offshore..
Dont think personal tax is up on 50% in Germany(Maybe in Gr€€c€), VAT is already paid by apple in Luxemburg and it's against EU regulation to pay VAT twice..
Or move to spain, they only pay 8% what i heard of
T...
Btw I already have an EIN (Employer Identification Number) ...
Are your sure it's EIN? I bet it's TIN: Taxpayer Identification Number. Only a company can have EIN. A person can have either SSN or TIN.
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...
You'll never get away moving money where you live without paying taxes.
They don't move money. They just spend money. If you make an account in offshore bank and then simply use the debit card in your country. Technically you are not moving money. You are just spending.
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They don't move money. They just spend money. If you make an account in offshore bank and then simply use the debit card in your country. Technically you are not moving money. You are just spending.
You can't unless you are moving/spending pocket's money.
Let's say I want to buy a $20k car in the UK and i buy it using my US company credit/debit car, I would have to explain the tax man how did I afford that and where those $20k came from.
For example if you are UK self-employed individual you'll have to fill your tax returns each year/quarters, and there's not really an easy way to avoid income tax if you want to stay from the right side of the law.
I suspect it's like that in any other heavily (income) taxed countries.
Likewise for companies it's hard to buy stuff for personal use.
Really the only way offshores work for self employed or life-style oriented business is to stack up a lot of money tax free in the british virgin islands and retire there when you are old, or any other country with a low-rate income tax.
You can't unless you are moving/spending pocket's money.
Let's say I want to buy a $20k car in the UK and i buy it using my US company credit/debit car, I would have to explain the tax man how did I afford that and where those $20k came from.
....
No, you wouldn't. Because it's not YOU who is buying the car, but the US company.
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No, you wouldn't. Because it's not YOU who is buying the car, but the US company.
The problem remains, if you are using the car for personal use in UK and you declare your are on a certain income the tax man will visit you at some point.
As said, it's very tough anyway to get the right balance between what you can declare as company expense and what's your entertainment.
Some of that was confusing. Can anyone sell apps in the US market?
I'm in the US and I hear about all the companies that open 'branches' overseas and don't have US taxes unless the bring the money back into the US. It's actually a big political issue right now.
I noticed the people here are from all over the world, I just assumed they were selling in ALL markets (including US). I also assumed they were paying taxes in their own country.
If the guy is smart, he should write his company on the Seychelles, have the banking in Switzerland and use "no-name" debit cards for cashout if he wanna go totally offshore..
Dont think personal tax is up on 50% in Germany(Maybe in Gr€€c€), VAT is already paid by apple in Luxemburg and it's against EU regulation to pay VAT twice..
Or move to spain, they only pay 8% what i heard of
don't do that.
Here you have to pay 25% tax for your company income.
Later on, when you withdraw the money for yourself as the company owner, you have to pay taxes again for your personal income on those benefits (15%-55% depending on the amount).
Besides, being the owner of a company, you have to pay a monthly social insurance fee. The lowest is about 250€, which you have to pay even if you don't sell a single app...
Are your sure it's EIN? I bet it's TIN: Taxpayer Identification Number. Only a company can have EIN. A person can have either SSN or TIN.
Yes, it's an EIN. I am a company and I received the EIN in the US as a european company selling apps in the US.
Don't ask, why I needed it, because I don't know anymore. I got it probably at the time when I was looking for the delaware deal. But I have it and it took me about 20 minutes to get it.
Anyway. Nevada may be a better oprtion, but it is to far away from europe :-D
Living in Europe, having offshore in USA and selling Apps on Apple Store
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