If I want to run a bootstrapped startup while living in Taiwan that sells to mostly US based businesses, but is developed by 1099 contractors in Asia (which have a 15 year amortization period I believe?), is there a new "best country" to open the company in? Singapore? HK? Taiwan?
In my experience explaining the tax system here, which takes _less than a single page of text to understand_, generally blows most US citizen's minds :) It is very business-friendly.
Check the section "Estonian tax system" on this page: https://learn.e-resident.gov.ee/hc/en-us/articles/3600007215...
Corporate tax rate on profits are 19% - 25% though.
If I were to return back to Europe, the UK might indeed be a decent choice.
Malaysia+Singapore/UAE is a good combo. Malaysia is cheap and loose. Sg/UAE have decent banking and low taxes.
My advice, however, is to just start as long as you can process payments. You can care about jurisdiction and taxes later when you have enough money.
If you intended to pay yourself in dividends from outside Taiwan: Taiwan Taxman will ask you if the dividends were generated from the work done while in Taiwan.
Open a Taiwan company? Probably not, it's such an hassle to get payments from the US with Taiwan's fintech (no stripe like company yet that make payment easy)
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I've been through the MDEC entrepreneur visa process and it was all fairly straightforward. Believe they have one of these digital nomad visas also now, if you are pulling out personal income while working on the business that's perhaps an alternative.
If you are willing to pay the higher corporate rate by domiciling directly in Malaysia then you can also apply to get a business visa as an employee instead.
Residents and businesses here file taxes with PR's Hacienda, not the IRS, therefore Section 174 doesn’t affect PR as far as I know. On top of that, PR already has several tax breaks and incentives that may tip the scales even more for some.
It will be a very interesting year though as the head of Hacienda just resigned, so it’s anyone’s guess as to how we’ll end up.
Also, an overlooked benefit - we have public healthcare so you don't have to worry about keeping a job in order to get health insurance. It's kinda overlooked point but it's weird that America has this system which incentivises you to have a job in case you get ill.
Also, everything is in English. I personally woulnd't want to file my accounts somewhere that I need to hire someone to translate the bank letters/contracts etc.
As of April-ish 2023 there are now very strict UK rules on contractors as well. They now must be hardline treated like contractors and can not be treated like employees with special contracts, e.g., no bonuses, no perks, no company supplied equipment, etc. Too many UK companies were abusing contractor employees in order to pay low wages and skirts benefits requirements whilst simultaneously treating them like full employees.
I would say that selling into US businesses is going to be a real drag, though. Those 11 AM PST meetings start at 3 AM in Taiwan...
If it was me, I'd keep everything under the US system until you're profitable enough to hire an expert and not ask on HN.
Also if you're going to raise investment, I would stick to the USA.
You might get into legal or hiring issues if you only get contractors though.
US citizens involved with foreign businesses must file various reporting forms, including Form 5471 and Form 926 (foreign corporations), Form 8865 (foreign partnerships), Form 8858 (foreign limited liability companies), Form 3520 and Form 3520-A (foreign trusts), and FBAR. Form 8832 enables a foreign limited liability company to elect to be classified as a corporation, partnership, or disregarded entity for US tax purposes. Failure to timely file a required reporting form can subject a US citizen to significant civil and criminal penalties.
> sells to mostly US based businesses
> 1099 contractors
This sounds to me like you should just do it in the US
