Quote:
Originally Posted by ASU2003
I have a few ideas. There is one I would like to implement pretty soon actually.
I have one question actually, and you may think I am getting way ahead of myself... But, this company would be a software company with developers all over the world. There would be no office in the Real World (maybe in something like Second Life (I've never played it though)). So, where would the company have to pay taxes? If I make enough money and live a nomadic lifestyle in random countries for a while as the money in the bank account grows, where would the company have to pay taxes? Do you need to license an on-line virtual company? Would it be best to license it in the Cayman Islands or Nevada or someplace like that? What benefits are there from getting a business license in Ohio, Michigan, Illinois, Indiana or Pennsylvania compared to the other ones? Could you start it in your home state and then move it offshore? I wonder if any business has tried to get away with the solely on-line business model selling software and paying no taxes because they don't have a country?
Where do you find this information out at? Did you read any good books when you were starting your business?
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Your business has to be based somewhere. Nevada and Delaware are popular choices because they don't have state corporate income tax (you still have to pay federal taxes, though). You will need an official business address in whatever state you're incorporated in, but you can rent one for fairly cheap, under $200/yr. If you don't establish a business address, every jurisdiction that thinks you're doing business there will assume you are, and they will pursue you for taxes, fees, and fines for doing business without a license.
You also need a business license for every state in which you conduct business. You'll need a lawyer to explain what constitutes doing business in a particular state. If you do business in several states, you'll probably end up paying taxes in all of those states, so this is best avoided if possible. If you're doing business in multiple countries, there are treaties that allow you to avoid double taxation, so you only have to pay U.S. tax on your earnings. These depend on the specific countries involved, but your company does have to be certified by the IRS as a U.S. company before you get the exemption from foreign tax. This gets pretty complex, so consulting a lawyer or accountant about your specific situation is well worth the expense.