4 ms·
If you work in the US, and most of your clients will be in the US, most tax agencies (and probably IRS, but I'm not sure) will effectively presume you're a US-b
by pieterhg 10y ago
If you work in the US, and most of your clients will be in the US, most tax agencies (and probably IRS, but I'm not sure) will effectively presume you're a US-based company. It doesn't matter if your company is registered somewhere else, they'll presume it as a US company. The same laws apply in most European countries.
Why? Because otherwise all freelancers would simply register in the country with the lowest tax to dodge their national taxes. Obviously governments don't want that.
If you have the opportunity to physically relocate to another country though, then it becomes interesting to find places with lower tax rates. Countries like Singapore won't care if you're a foreigner opening a company and are never there. It's mostly about your personal tax residency what matters.
An increasingly common construction with people working remotely is a Hong Kong or Singapore company, and either no personal residency anywhere (e.g. traveling around perpetually), or a personal residency in a place with lower personal tax. Think Bulgaria or Panama.
If you're a US citizen, there's extra difficulties here. You'll be taxed for any income above $100K/y, even if you're not a US resident anymore. If you don't want to be taxed in the US, you'll have to forego your citizenship (!).
P.S. IANAL.
- alltakendamned 10y agoI'm always curious how people that have no personal tax residence deal with health care insurance? At least in Europe, many private health insurance plans for travelers have the prerequisite of being covered by the countries social security first.
- pieterhg 10y agoYou're very right. This is one of the main challenges for people to move away. There's expat insurance though (usually in the same country as where you're from) and usually the fees are way lower since you're now in a pool of higher educated wealthy expats instead of the overall population. You can also usually move back, become a resident again and get covered again.
- matt4077 10y agoI believe expats insurance (at least the one I had) is significantly cheaper because they only cover acute conditions + transport back home – meaning they won't be paying for the really expensive cancer/diabetes/alzheimers/etc.-treatments.