4 ms·
Indeed, but you are taxed on /your/ income, not your company's. The company itself is not a citizen of the jurisdiction you live in. Have the company pay yourse
by virtualritz 15y ago
Indeed, but you are taxed on /your/ income, not your company's.
The company itself is not a citizen of the jurisdiction you live in.
Have the company pay yourself a salary that is below (or just above) the lowest tax bracket in the jurisdiction you live in and you pay zero or very little taxes on that income.
When you ever want to take out more than this salary from that company, make sure you do so either through another company that you control or while not living in a jurisdiction that taxes individuals on such income.
A company is primarily a financial device to avoid paying (too much) taxes.
Regarding the last part: I don't know if you ever incorporated abroad. But 'streamlined' is an understatement. I have frankly no idea what 'effort' you are referring to. Could you elaborate?
- jdietrich 15y agoIf a company has a lasting place of business in a country (a Permanent Establishment), it falls under that country's tax law for some proportion of it's profits. You acting as a director or manager counts as a Permanent Establishment. If I register a limited company in Britain but I manage it from France, that company will be taxable in France to a greater or lesser extent. While it may be possible to distribute profits in a more tax-efficient manner, a company cannot operate in a country but completely avoid paying tax by mere fact of being incorporated abroad. Simply employing a contractor or renting a server in a country may be sufficient to fall under the Permanent Establishment rules. International taxation is punishingly complex. Inadvertent evasion is easy and mistakes expensive. If your company is only paying tax in Hong Kong but has offices or employees elsewhere, you need to contact a competent accountant now.