Post a new topic
    5 Replies Latest reply on Jul 4, 2009 10:55 PM by bm911tax

    How or should I incorporate an online retail store offshore?

    buffed Newbie

      I have a Florida incorporated online retail store with customers in the USA and around the world. My business is home-based, successful and stable. I have one employee who handles most of the incoming orders and shipping along with some of the inventory ordering. I'd like to learn more about the possibility of incorporating outside the USA.

      Here's on thought I had on a possible option: Set-up a separate corporation in a favorable tax location along with an accompanying corporate bank account which would receive all the online order payments (credit card). Then, sub-contract the shipment of orders from my USA location. Perhaps set my employee up as a private contractor. This is just one thought on the subject and I'm here hoping to find advice from knowledgeable people who may have done something similar.
        • Re: How or should I incorporate an online retail store offshore?
          LUCKIEST Guide
          incorporate an online retail store offshore, Welcome

          Who are you?? Do you have a lawyer??, an accountant?? or a business plan??

          Good place to start.
          • Re: How or should I incorporate an online retail store offshore?
            bm911tax Adventurer

            There is no real tax advantage for your business to be formed outside the US. US has the most favorable tax laws for corps. You will still pay taxes in the US for the profits/income that you will receive from your corp. Since you are the only owner of the corp there is really no way to avoid taxes and you will be subject to extra scrutiny by the IRS and State Tax Dept. What you need to do is to become an S corp. There are many tax advantages reason to become an S corp. You will pay yourself a salary, get a corp sponsored retirement plan and take distribution form the copr. Of course talk to a qualified tax advisor/accountant that should be able to help you and set this up for you correctly. I DO NOT recommend you to do this on your own, since I have dealt with people that thought they knew what they were doing but at the end they had to pay me twice as much; to fix their mistakes and to do in correctly afterwards.


            Good luck to you.



              • Re: How or should I incorporate an online retail store offshore?
                buffed Newbie
                Ben, thanks for the input. I'm already a Sub S. It's my understanding that the first 80K+ of income earned outside the USA is not taxable. Reducing my taxable income by this amount would seem to be a good incentive. Here's the set-up:

                A.) My garage is converted into an office/warehouse in FL
                B.) My company sells tangible products around the world through Internet and phone.

                One possible scenario:
                1.) Establish a company and corporate bank account outside the USA in a Tax-favorable country.
                2.) All credit card sales revenue is deposited in offshore corporation's bank.
                4.) Offshore Corporation either contracts existing Domestic company to ship orders or hires a private contractor to do so.

                The above is just one possible set-up I can imagine. Be assured I would absolutely use the professional services of someone who actually knows what they're doing so I don't get myself into trouble. However, as previously stated in a previous post I want to gather a better understanding of the subject before deciding if it's worth it to take the next step.

                In addition to the possible tax benefits there are also other incentives. I've spent a lot of time traveling internationally and enjoy being outside the USA. Secondly, America is going to hell-in-a-handbasket on the fast track lane. For figuring sake, let's say there's a 20% tax savings on the 80K That would be an additional 16K which could be put toward a property/investment assets outside the USA.
                  • Re: How or should I incorporate an online retail store offshore?
                    bm911tax Adventurer
                    The exclusion as you referring to for 2009 is $91,400 and its adjusted for inflation annually. Generally speaking, if you live and work outside of the United States, then you can exclude all or part of your foreign wages from US taxation. To qualify for the foreign earned income exclusion, you must :
                    1.Work and reside outside the United States.
                    2.Meet either the Bona Fide or Physical Presence tests.

                    Google "instruction Form 2555" to get the basic info that you looking for

                    Also the IRS is

                    Best of luck.