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Thanks so much for doing this! Here's my situation: I've been working on a pretty successful project with a friend (selling eBooks), and we're thinking about i

Thanks so much for doing this! Here's my situation: I've been working on a pretty successful project with a friend (selling eBooks), and we're thinking about incorporating (up to now we've been taking in income separately through our own personal companies). Given that I live in Japan, and he lives in Australia, does it make more sense to incorporate in the U.S., in one of those two countries, or somewhere else (Hong Kong)? The main advantage I can see to incorporating in the U.S. is being able to use Stripe or other similar services. But I don't know if that alone is worth the trouble? For a company that only sells digital products and doesn't need an office in the U.S., is there any benefit to incorporating there?

philiphodgen 13y ago
I think the question of where you incorporate depends on two factors. First is citizenship. Are you (or your friend) U.S. citizens? If so you have a bunch of tax hobbles that will slow you down. Second is where your customers are. This is both a tax question (you want to pay less tax) and a business question (you want to collect more money more easily). If you need Stripe or its equivalent, you dance to the tune they play. Organize in the USA and bend to their will. If your customers are in the USA you have to look at whether you have "U.S. source income" -- a defined technical jargon-y concept. If so, it doesn't matter where or what you (or your company) happen to be. The U.S. wants tax. You have to look at brain damage, complexity, and cost. Don't focus so much on financial cost when thinking about your business structure. Think about opportunity cost. An hour spent thinking about this is an hour you did not spend writing books or marketing them. Until the stakes are high -- several million a year of revenue -- don't get too complicated. Yeah Apple 'n Google do fun stuff. But they have billions of dollars and you (and I) don't. :-) Keep it simple. Don't optimize for tax too early. You'll make more in building your business fast than you will spending the same amount of time and thinking on tax strategies.
- sgdesign 13y ago
  Neither of us are U.S. citizens. I'm French and my partner is Australian. And we have about half of our customers in the U.S., and half outside. And I hear you about not over-thinking this. But even if we want to choose the simplest route, it's still not obvious which solution to pick just yet…
  - girvo 13y ago
    Where in Australia is he? I'm an Aussie, and I've done a startup and a regular business, and my mother is a(n ex-)partner at KPMG, so I have a whole stack of resources and info I can give him if you guys decide to incorporate here. My email is in my profile :)
    - tmeasday 13y ago
      Hey, partner here. I'm in Melbourne. I've set up more vanilla cos here in Aus, but I'm (we're) pretty confused about all the tax implications of selling eBooks to domestic and international audiences, and my accountant doesn't seem to be much more clued in. Any advice you can provide would be highly appreciated.
SomeoneWeird 13y ago
fwiw you can now use stripe in Aus :)
- sgdesign 13y ago
  Actually I just saw that! Their site says you can only use it in AUD, is that still the case or are USD accepted too now?

philiphodgen 13y ago

I think the question of where you incorporate depends on two factors. First is citizenship. Are you (or your friend) U.S. citizens? If so you have a bunch of tax hobbles that will slow you down. Second is where your customers are. This is both a tax question (you want to pay less tax) and a business question (you want to collect more money more easily). If you need Stripe or its equivalent, you dance to the tune they play. Organize in the USA and bend to their will. If your customers are in the USA you have to look at whether you have "U.S. source income" -- a defined technical jargon-y concept. If so, it doesn't matter where or what you (or your company) happen to be. The U.S. wants tax. You have to look at brain damage, complexity, and cost. Don't focus so much on financial cost when thinking about your business structure. Think about opportunity cost. An hour spent thinking about this is an hour you did not spend writing books or marketing them. Until the stakes are high -- several million a year of revenue -- don't get too complicated. Yeah Apple 'n Google do fun stuff. But they have billions of dollars and you (and I) don't. :-) Keep it simple. Don't optimize for tax too early. You'll make more in building your business fast than you will spending the same amount of time and thinking on tax strategies.

sgdesign 13y ago
Neither of us are U.S. citizens. I'm French and my partner is Australian. And we have about half of our customers in the U.S., and half outside. And I hear you about not over-thinking this. But even if we want to choose the simplest route, it's still not obvious which solution to pick just yet…
- girvo 13y ago
  Where in Australia is he? I'm an Aussie, and I've done a startup and a regular business, and my mother is a(n ex-)partner at KPMG, so I have a whole stack of resources and info I can give him if you guys decide to incorporate here. My email is in my profile :)
  - tmeasday 13y ago
    Hey, partner here. I'm in Melbourne. I've set up more vanilla cos here in Aus, but I'm (we're) pretty confused about all the tax implications of selling eBooks to domestic and international audiences, and my accountant doesn't seem to be much more clued in. Any advice you can provide would be highly appreciated.

SomeoneWeird 13y ago

fwiw you can now use stripe in Aus :)

sgdesign 13y ago
Actually I just saw that! Their site says you can only use it in AUD, is that still the case or are USD accepted too now?