Starting a new business (or expanding an existing one) into a new country is an exciting endeavor, but it’s also one fraught with many obstacles and hoops to jump through as well.
If you’re planning on starting a business abroad, you’ll need to prepare yourself adequately in order to avoid running into complicated and time-consuming issues after you’ve moved.
Here are four tax-related things you need to know when starting a business outside of the United States.
1. Check the tax and immigration laws of the country
In most countries, non-citizens require a visa in order to stay. But if you plan on working and doing business there, in most cases, you’ll need to follow an additional set of rules and regulations — including acquiring a work permit.
So, your first order of business must be to do your research into your country of interest and see what you need to do in order to set up a business there.
2. Set up a bank account for your business
Over the years, the US government enacted a series of laws to help prevent money laundering and tax evasion by businesses and high net worth individuals. This will affect how your company handles financial matters abroad.
One way to simplify things for yourself and your tax professional is by working with a US bank that offers additional support and resources for international companies. Start with financial institutions like Chase Bank and Wells Fargo, but make sure to shop around to find the best bank with competitive rates and attractive benefits.
3. Get familiar with the US tax issues that may affect you and your business
Programs like the Foreign Earned Income Tax Exclusion can help you save money on your taxes, but only if you follow the guidelines it sets forth. Additionally, you may be able to save even more through deductions or tax credits offered when you live and work for a majority of the year in another country.
Of course, you’ll still be responsible for taxes like self-employment and other fees. In order to get a better understanding of what you’re eligible for and what you’re responsible for, you’ll want to enlist the help of an accountant who’s well-versed in these matters.
This leads us to our next point...
4. Find a tax professional you can trust
Sure, you can rely on tax software to file your forms quickly and easily, but when tax issues come up, you want to have someone to turn to for advice and answers to any questions you have.
Make sure to choose an accountant or tax professional with several years of experience working with ex-patriots, as they’ll have extensive knowledge on any tax problems that may arise when you start a business outside of the US.
Get in touch with Accountants without Borders today
When you’re looking for assistance with starting a business outside of the US, turn to the experts at Accountants without Borders.
Although we’re based in San Diego, we’re proud to help businesses in the United States and all over the world with the resources and knowledge to successfully start a business in a new country.
If you’d like to learn how we can help you set up your business, whether here in the US or abroad, contact us using the form on our website.