Disclaimers and Policies

Disclaimers and Policies

Alexander John Hay, Attorney, assumes no responsibility for the accuracy or timeliness of any information provided herein. The information contained herein is for informational purposes only and is not legal advice or a substitute for legal counsel. Online readers should not act upon this information without seeking professional counsel.   This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. While we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Accordingly, do not use any of the supplied e-mail interfaces to send us any confidential information until you speak with one of our attorneys and receive our authorization to send that information to us.  Sites listed as hypertext links herein are not under the control of Alexander John Hay, Attorney. Accordingly, Alexander John Hay, Attorney, can make no representation concerning the quality, safety or suitability of the content of these sites nor can the fact that Alexander John Hay, Attorney, has included this link serve as an endorsement by Alexander John Hay, Attorney, of any of these sites. Alexander John Hay, Attorney, is providing this site, the information, listings, and links contained herein only as a convenience to you. 

REFUND POLICY

Alexander John Hay, Attorney, will not refund any funds received once funds are accepted by Alexander John Hay, Attorney, and services have been performed. However, not withstanding the above policy, clients are welcome to make any request regarding billing issues to billing@alexander-hay.com. Refunds will be granted at our sole discretion.

DELIVERY STANDARDS

Alexander John Hay, Attorney, will normally use standard postal delivery by Postal Service unless specifically stated otherwise. We reserve the right to use overnight and/or other courier services in order to expedite delivery of important documents and material.

PRIVACY STATEMENT

We respect your right to privacy. Privacy is a very serious matter for Alexander John Hay, Attorney. It is true that in order to process your request, we must know basic contact information such as your full name, address, email address, and method of payment. All required information is kept internally and is never shared with third parties.

CONTACT INFORMATION

You can reach Alexander John Hay, Attorney, by:

email:

admin@alexander-hay.com

mail:

Alexander John Hay
364 East Main Street, Suite 215
Middletown, DE 19709

Recent Posts

How to Operate a US Based E-Commerce Business from Outside the USA and Save a Lot of Money!

For the past 15 years I have been promoting the USA as the ultimate banking solution for non-residents (or as some might say a “Tax Haven”). My traditional proposal was to set up a US LLC, take the default election of ‘disregarded entity’ (a “disregarded entity” is an LLC that is treated by the Internal Revenue Service as a complete pass through entity. For tax purposes it does not exist. For all other purposes it does.), open a bank account, and as long as you are not earning any US Source/Effectively Connected Income, you are fine. No need to file tax returns let alone pay any taxes.

That is no longer universally appropriate. FATCA has not changed the tax treatment issues, but has changed the reporting requirements for US payors such as PayPal, Amazon, Shopify, Stripe, etc. The issue of the W-9 (reporting form for US resident payees receiving funds) and W-8Ben (reporting form(s) for non-US residents receiving funds) was always a little murky but now it is downright impossible. Non-residents receiving payments from US payors, even if the funds are “not effectively connected” to US income, are now facing serious problems. No one really understands how the new W-8Ben system works since they have replaced the one form with 4 or 5 related forms that no one really knows how to use. The payors face serious penalties if they get it wrong. So most payors have decided to refuse to open accounts for anyone who cannot execute a W-9. Again, only taxable individuals and entities can issue a W-9.

Because of this it has become very difficult for non-residents to use their US bank accounts to receive funds from US payors. That means setting up accounts with PayPal, Stripe, Amazon, Shopify, etc. will be impossible with a US LLC treated as a ‘disregarded entity’.

Our solutions:

For those non-residents who do not need to receive funds from US payors, the Disregarded LLC is still fine. Nothing to worry about.

For those receiving money from US payors, we need a more sophisticated structure. We will establish a US LLC which then elects to be a ‘taxable association’ (that is an entity that will be taxed separately like a C Corporation). This Taxable US LLC will act as a Payment Agent for a non-resident business with a written agency agreement to resell non-resident goods and services in the USA. 90% percent of the gross income goes to the foreign provider (with appropriate W-8Ben — that will be very easy), and all operating expenses will come out of the 10% agency fee — there should be little or no taxes. A second US LLC can be established to act as a ‘disregarded entity’, and the funds can go from the Taxable US LLC to this Non-Taxable US LLC.

This solution is simple and easy to implement. In fact old Disregarded LLCs can be converted to “Taxable Association” LLCs with little effort. Another alternative is to set up a second US LLC to be the Payment Agent that then transfers the 90% to the original company.

The only downside is that there is now a requirement to file an annual tax return for the Taxable US LLC which means there is a requirement to maintain a good set of books so that the tax preparer can accurately file the tax return. There may be little or no taxes due, but failure to file a tax return can cause a lot of problems. I have always advised my clients to maintain a set of books for professional reasons, but they were not required for US tax purposes. Now they are.

So although it is not as easy as it used to be, it is still very easy.

For new clients this is the solution:

Company 1 is a US LLC electing to be a ‘taxable association’; a Taxable US LLC.

Company 2 is a US LLC electing to be a ‘disregarded entity’; a Non-Taxable US LLC.

Company 1 accepts payments on behalf of Company 2 for goods or services through Paypal, Amazon, Shopify, Stripe, etc., receives a modest commission which is used to pay transactions costs and company fees, and then pays a modest corporate tax that will probably never go above 15% of the net income.

There are of course other more complicated options that might be useful for some clients, but for most this is all that will ever be needed to setup and operate your e-commerce business in the United States of America.

  1. A Nevada LLC Should Not Be Blindly Trusted… Nothing Should Comments Off on A Nevada LLC Should Not Be Blindly Trusted… Nothing Should
  2. How a US LLC can Uniquely Benefit a UK Resident Comments Off on How a US LLC can Uniquely Benefit a UK Resident
  3. The Digital Nomad Package Comments Off on The Digital Nomad Package
  4. The Most Important Thing We Don’t Want to Think About: Asset Protection Comments Off on The Most Important Thing We Don’t Want to Think About: Asset Protection
  5. Investing Opportunities in the Republic of Georgia Comments Off on Investing Opportunities in the Republic of Georgia
  6. “Disregarded Entity” vs “Taxable Association”: What is the best way to structure your LLC? Comments Off on “Disregarded Entity” vs “Taxable Association”: What is the best way to structure your LLC?
  7. Can the IRS take your US Passport? Yes. Comments Off on Can the IRS take your US Passport? Yes.
  8. Why You Need a Second Passport Comments Off on Why You Need a Second Passport
  9. Important Updates to the Privacy Passport® Comments Off on Important Updates to the Privacy Passport®