Anyone experienced with this have a couple hours for hire to grab a coffee and chat business/finance between USA + Taiwan in Taipei? Or if you only have a few minutes for quick feedback, would love to hear from you below.
I currently live in Taiwan with a USA corporation, making video games and living off royalties from a USA corporation (Steam/Valve - you know them if you’re a gamer) on a monthly payout.
There are some pros and cons of having an American business being in TW:
Pros
-
With my USA corp, I can prevent the 30% withholding. This helps because my estimated quarterly taxes is lower than 30%.
-
Taxes are easier (not easy, but easier) to figure out and I can take advantage of Foreign Earned Income Exclusion, which rocks. Then I only really have to pay 15.3% sole prop taxes.
-
I’m not double taxed with TW. They have no treaty with USA for withholding, if I operated under a TW entity.
-
My virtual office in USA costs $10/mo and they even scan my incoming mail to PDF and send it to me like email and I can forward it wherever, effortlessly. In TW, it’s fairly expensive and the standard is to pay a year ahead of time. And no electronic or forwarding services. While it may seem like just a small pro, I’ve discovered that this really makes my life easy lol.
Cons
-
USA CPA’s are expensive. My taxes are too confusing to not use one. Taiwan CPA’s are countless times cheaper, if I had a TW business, instead.
-
I have an LLC, but I can’t even utilize it. No bank will let me open a business account while abroad. I tried HSBC, Capital One, Silicon Valley Bank, and Bank of Internet (not even the “last resort” bank wanted part of it).
-
Contractor payouts help REDUCE taxes owed in USA, while contractor payouts in Taiwan are subject to a ~30% (non-deductable) tax rate. This lowers the stress of paying contractors (super common as a remote tech startup).
-
No banks want you. Not foreign, not USA. Perfect credit score and banking history? Doesn’t matter: I even tried DBS in Singapore, but FATCA won’t allow it. In fact, FATCA is so over-regulated now that foreign banks simply don’t want you. I can still manage to open a personal account, but nothing beyond that (all the banks I’ve been with disallow any form of business activity, even sole prop). Taiwan banks won’t let you open USA LLC business account, in case you’re wondering.
(For USA banks, yes, I tried virtual offices. Tried mother’s address in USA. Tried certified proof of address from an embassy. Tried making my mother CFO that lives in USA. They all blame Patriot Act, even if there’s nothing in there that says, “must live domestically in USA and prove address with utilities bill and nothing else”)
-
You may look sort of sketchy to things you do in USA. While most places have np with you entering a virtual address and a VoIP phone number, some places like banks assume you’re loitering money or doing something weird, no matter how legit.
So, essentially, it’s sort of awkward. I can’t have a business bank account, so it’s difficult/expensive to pay my contractors and I don’t like paying with PayPal or something – makes me feel sketchy even though I’m trying to do the right thing. I also don’t trust my bank, as I’ve read horror stories of them just randomly shutting down foreign accounts without a reason, leaving me high and dry.
Hmm, what the heck to do?
If I can get a verified physical address without looking weird about it (if I get on a utilities bill or something), that seems to be the best way to go. However, I’m not sure how complicated that may be. I’m currently Googling if it’s cool to do this.
-
For physical address for bank forms, If I pay 1/2 my mother’s utilities bills, but don’t live there, can I get my name on that utilities bill? I currently send her a monthly check via bill pay to help with rent/utilities ANYWAY. May as well make it official, but my mother’s worried it’s “illegal” for me to cosign if I don’t live there, which sounds far-fetched.
-
For physical address for bank forms, If I live with my mother while I’m USA, I can use her address as my USA physical presence, can’t I? Since she’s also the CFO, that’d make further sense.
Is it worth continuing operating as a USA corp vs a Taiwan corp as a USA citizen?
I am married to a native Taiwanese. She actually opened up a business in her name (I trust her 100%, np if it’s in her name only) in case I ever wanted to transfer it to Taiwan. But then, wouldn’t taxes look weird for me? I suddenly need to report $0 income (my wife is not a USA citizen or even a greencard holder - we live here in TW)? O_o the last thing I want to do is raise flags.