Tax & Compliance for Global Founders

Corporate Level: 21% federal corporate tax on worldwide income (though many startups have no profit in early years). State corporate tax varies (Delaware: 8.7% on Delaware-source income).

Shareholder Level: Dividends taxed at personal rates (15-20% qualified dividend rate for US taxpayers). This is the "double taxation"—profits taxed at corporate level, then again when distributed.

Foreign Founder Considerations: If you're a non-US resident founder with no US physical presence, you generally don't owe US personal income tax on salary/distributions (though 30% withholding may apply to dividends unless tax treaty reduces it). Your home country may tax worldwide income.

Required Filings: Form 1120 (federal corporate return), state returns, Form 5472 if foreign-owned, quarterly estimated tax payments if profitable. CPA typically required ($2K-5K/year for startups).

Sales Tax: If you have US customers, you may owe sales tax in states where you have "nexus" (physical presence or economic threshold). Varies by state. SaaS generally subject to sales tax in many states now.

Pass-Through Structure: LLC itself doesn't pay federal income tax. Profits and losses "pass through" to members' personal tax returns. Single-member LLC is disregarded entity (treated as sole proprietorship for tax).

Foreign Member Tax Treatment: Non-US members generally only owe US tax on US-source income. If all your customers/operations are outside the US, you likely owe zero US income tax (though you still must file). Consult tax advisor for "effectively connected income" rules.

Required Filings: Form 1065 (partnership return) if multi-member, Schedule C if single-member, Form 5472 if foreign-owned. Wyoming has no state income tax. Much simpler than C-Corp.

Self-Employment Tax: US-based members pay 15.3% self-employment tax on profits (Social Security + Medicare). Foreign members generally exempt if no US presence.

Home Country Tax: Most countries tax worldwide income for residents. If you're a tax resident of France/Germany/etc., you'll likely owe tax there on LLC profits (though US-paid tax may be creditable under tax treaty).

Corporation Tax: 19% (profits up to £50K) or 25% (profits over £250K). Applied to company profits. Must file CT600 return within 12 months of accounting period end. Payment due 9 months + 1 day after period end.

Dividend Tax: Shareholders pay personal tax on dividends: 8.75% (basic rate), 33.75% (higher rate), 39.35% (additional rate). First £500 dividend allowance is tax-free (as of 2024/25).

Non-UK Resident Directors: If you're not a UK tax resident, you generally don't pay UK personal income tax on salary/dividends from UK company, but the company still owes corporation tax on UK-source profits. Check treaty.

Required Filings: Annual accounts (filed with Companies House), confirmation statement, CT600 (corporation tax return), Self Assessment if you're UK tax resident director.

VAT: Must register for VAT if turnover exceeds £90K (2024 threshold). 20% standard rate. Quarterly VAT returns via HMRC online. Complex if selling to EU/international customers.

Corporate Tax: 17% flat rate on Singapore-source income. New companies enjoy partial tax exemptions (first $100K often 75% exempt, next $100K often 50% exempt). Effective rate for first $200K can be ~4.25%.

Territorial System: Singapore doesn't tax foreign-source income (with conditions). If you're a SaaS serving global customers and operate remotely, careful structuring can minimize Singapore tax. Requires substance and proper documentation.

Dividend Tax: Singapore has zero capital gains tax and zero dividend tax. Dividends paid out of Singapore-taxed profits are tax-free to shareholders (one-tier system).

Required Filings: Form C-S or C (corporate tax return) by November 30 following fiscal year end. Annual returns with ACRA. Audited financials required for most companies (unless exempt small company).

GST: Must register if revenue exceeds $1M SGD. 9% GST (2024 rate). Can be complex for international SaaS—consult advisor.

Unique Tax System: 0% corporate tax on retained earnings. Tax only triggered when profits are distributed (20% on gross distribution, effective ~25.6% on net distribution). No tax if you reinvest profits in business.

Personal Tax for Directors: If you pay yourself a salary, normal payroll taxes apply (~33% social tax + 20% income tax in Estonia). Many e-residents pay minimal salary and take dividends from other jurisdictions.

Non-Resident Considerations: If you're not an Estonian tax resident, Estonia doesn't tax your personal income. OÜ only owes Estonian tax when distributing profits. Your home country may tax the distributions.

Required Filings: Annual report (very simple online), tax declaration. No audit required for small companies. Accounting can be done remotely (~€100-200/month via Estonian services).

VAT: Must register if EU sales exceed €40K. 22% rate. MOSS (Mini One-Stop Shop) for digital services to EU consumers simplifies compliance.

Territorial Tax: Only Hong Kong-source profits are taxed. Two-tier system: 8.25% on first HK$2M, 16.5% above. If your income is non-Hong Kong source (e.g., SaaS serving global customers with no HK operations), you may claim offshore exemption.

Offshore Claims: Requires careful documentation and advisor support. Inland Revenue Department scrutinizes these claims. Must prove activities generating income occurred outside HK.

Dividend Tax: No tax on dividends in Hong Kong. No capital gains tax.

Required Filings: Profits tax return (annually), annual return with Companies Registry, audited accounts (audit required for most companies). First return due ~18 months after incorporation.

Compliance Cost: Higher than most jurisdictions. Audit + tax filing typically $1.5K-3K/year. Dormant company filings cheaper (~$500).