# where to register as a sole trader?



## pauldf

I am a translator, getting work from different European countries and doing it all online. I need to be registered somewhere as a sole trader/one-man company. At present, I am not officially resident in any country. I am British but have never worked in the UK and have no NI number. Does anyone know of a country where I can (simply and cheaply) register as a sole trader without living there and without doing any work originating from that country? If an address is required (without proof of residence), I expect I can find a maildrop in most countries. I have tried to find a suitable country on the Internet, but all I could find is that it seems to be difficult in most EU countries. Of course, I could move to an EU country, rent a flat, pretend I was going to live there, do all the residency paperwork, etc. But I'd much prefer to travel the world while doing my translations. Any ideas would be greatly appreciated!


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## Bevdeforges

In most EU countries, I think you pretty much have to be registered in the country in which you are tax resident (and there are varying definitions of that). Much of it has to do with the need to be registered with and paying into the national social insurance system.

Actually, the only reason you would "need" to register as a one-man company is for tax purposes and if you aren't living anywhere long enough to pay taxes, perhaps you don't actually need to register. (OTOH, in at least a couple of the EU countries I'm familiar with, any business must have a tax registration number for vendors they are going to pay.)
Cheers,
Bev


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## Bevdeforges

Update: It's an absolute coincidence, but someone on Facebook just sent an article about Estonia and their "digital residency" - it might be something of interest to you:
E-residency, in Estonia la cittadinanza digitale si ottiene con un clic - Repubblica.it

It's in Italian, but I ran it through Google translate and it comes out quite readable.
Cheers,
Bev


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## pauldf

Cara Bev

Grazie per la risposta! That's certainly worth looking into. And there is also plenty of info in English on the web about Estonian e-residency, including a piece in Wikipedia.

But one may still have to pay a lot of money to register a company. That is the problem - if you have a real company and a few thousand EUR you don't mind parting with, you can register in a number of countries. But for a one-man show, like a translator, it's not easy to find a cheap option.

I will also look at the possibilities in low-income countries. They sometimes have less bureaucracy, or you can pay someone a small amount to cut through the bureaucracy. I know for a fact - and this info may be useful for some readers - that a non-resident can easily open a bank account and get a visa card (without credit facility) in Kenya and Thailand, and probably many other similar countries.


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## BBCWatcher

pauldf said:


> Of course, I could move to an EU country, rent a flat, pretend I was going to live there, do all the residency paperwork, etc.


There is that option, and you can still travel. Gibraltar looks relatively straightforward and appealing as a "home base of record," for example.


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## Bevdeforges

If you're really primarily interested in the "easiest" place to register a business, you should definitely look at the US state of Delaware. Lately it's mentioned in all the discussions of "tax havens" and easy business set-up. I had understood you specifically wanted an European country.
Cheers,
Bev


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## pauldf

Thanks, Bev and BBCWatcher. I'll look into Gibraltar and Delaware when I have time - busy translating at the moment! Re your first reply, Bev, which I didn't notice the first time: a translation agency will give me a lot of work but only if I register, and it's probably the same with other translation agencies. Difficult to get enough translations from private customers.

To register, and for other purposes, one often needs "proof of residence". This is probably a post 9/11 phenomenon, and a complete farce. Bank statement with address: I can go to my bank online and change my address to a maildrop address anywhere in the world, and then ask them for a paper statement. Utility bill or contract with landlord: I can rent a room with a month's notice and stay just until I get my first utility bill, or leave after one day if I have a contract to show as "proof"!


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## BBCWatcher

Yes, you can. So what's the problem?


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## pauldf

The problem is not getting an address, it's getting a registration number which I can put on invoices I send to the translation agency. Surely it should be possible somewhere to fill out a simple form (preferably online) with name, address, name of (one-man) company and purpose of business for a small fee, instead of paying thousands of euros to these agents who offer company formation, registration, virtual office, etc. i.e. a whole package of things most of which I don't need.


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## BBCWatcher

It is possible as a sole trader -- if you have at least nominal residence somewhere.


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## Bevdeforges

Delaware is pretty notorious for "absentee corporations." I don't believe you have to have a physical presence in the state at all. (In the US, you often don't have to register a "sole proprietorship" at all.) https://en.wikipedia.org/wiki/Delaware_General_Corporation_Law

It could be worth a look-see.
Cheers,
Bev


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## BBCWatcher

From what I can tell a Delaware LLC requires a franchise fee to be paid every year, currently $250, above and beyond formation, compliance, and registered agent fees. That's a fair amount of money in the circumstances.

A Wyoming LLC looks like a relative bargain and is the "hip, trendy" option these days (it would seem). I'm seeing firms advertising LLC formation in Wyoming for as little as $160 and registered agent service for as little as $24 per year (from the second year). Now that's inexpensive. (Quality? Who knows.) Wyoming doesn't appear to have an annual franchise or license fee (for purely out-of-state LLCs), though you do have to file an annual report.

Not necessarily recommending this, but I'm passing on the information for what it's worth.


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## pauldf

Thanks very much, BBCWatcher, for taking the trouble to check out Wyoming and Delaware.

In fact, I think I've now found the solution. I was probably using the wrong search words. But I've now found one agent in Ontario and one in Ireland which both have a simple form to fill out for a sole trader registration and the fee in both cases is only about USD/EUR 100-150. 

The translation bureau said I could register in any country, but it probably looks better to register in a country with a similar time zone to the countries where you get your work from (in my case, Europe). People might not contact me during European office hours if they think I'm still in bed in Ontario!


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## BBCWatcher

Do either/both of those constructions require annual fees, reports, taxes, registered agent fees, etc? (Wouldn't be unusual.) If so, what are those costs likely to be?


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## pauldf

I forgot to bookmark the Ontario website where I found the actual form you fill out to register a name as a sole trader, but I had a quick look at some other Ontario business sites, and there it seems you are just paying for your registration as a sole trader and nothing else. 

The Irish site is: https://www.companysetup.ie/register-a-business-name/ where if you click on Sole Trader Order Form, you find a simple form and reasonable fees. I will probably do a bit more searching before I decide, as I'm not in a great hurry, but if I decided to use this Irish service, it seems all that's needed is an Irish maildrop address or a trip to Ireland to rent a room for a short time.


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## BBCWatcher

OK, but -- leaving aside liability -- doesn't Ireland's sole trader construct also land you in Ireland's social insurance tax and income tax systems? That status seems to be completely linked to tax residency. Thus when you're no longer a tax resident you're also no longer a sole trader in Ireland. At least, that's my understanding. Irish corporate constructs are different.

Maybe we should back up about three steps here. What does/do your translation clients want? What are they trying to accomplish or require? I'm not sure I quite understand what they're after, so it's hard to recommend a viable approach.


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## Bevdeforges

One thing the clients may want is an invoice with a valid business registration number. I know here in France, it's essential to have that number in order for another business to be able to keep right with the VAT authority. I suspect France isn't the only EU country with that sort of a rule.
Cheers,
Bev


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## pauldf

Well, I don't mind paying a bit of tax in Ireland. The translation agency that will give me a lot of work will not accept invoices from private individuals; I have to be registered as a sole trader. This probably applies to other translation agencies. If a private person asked me to do a translation, of course they wouldn't care if I was registered or not. In between, you have staff of colleges and universities (I often do scientific articles, etc.), where the institution they work for sometimes doesn't require a registration number and sometimes does.


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## BBCWatcher

Well OK, but wouldn't Gibraltar be a better option as your official tax home? There's a reason I mentioned it. It also offers sole traderships, and you also interact with the government in English. Its top marginal income tax rate is 29% (with a lot of exemptions) versus 40% in Ireland, and there's voluntary (not mandatory) social insurance participation for those who are self-employed.


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## pauldf

I'll take a look at Gibraltar. But if low tax is the main consideration, maybe I should be looking at countries with 0% income tax, such as the UAE.


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## BBCWatcher

If you can establish residence in the UAE, and provided the costs associated with establishing and maintaining a sole trader construction (or equivalent) are reasonable. However, my understanding, so far, is that for a residence-based business you need something in the European Union/European Economic Area, preferably a sole trader arrangement, given your citizenship. Gibraltar would be a stronger contender than Ireland within those parameters. You could also take a look at Bulgaria, though obviously English isn't the primary language there. You'll pay an income tax rate under 10%, though there are some compulsory social insurance taxes.

For something non-residence-based your choices are more limited since most/many countries require a sole trader (or equivalent simple/low cost business construction) to be resident, or they require something much more expensive -- in tax, fee, and/or other terms. Wyoming, United States, and its LLC construction is a notable exception, as mentioned.


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## pauldf

Thanks once again for useful information. A basic question: a person is normally only liable for tax in the country where he/she is resident/registered - is that right? So if I get translations from country A but live in country B, then the tax authorities in country A can't tax me, even if I get a lot of work from that country? Or might they ask for proof that I'd paid tax in country B? I realise that this is a general question, and the rules may vary from country to country, but maybe it's possible to give a general answer.


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## BBCWatcher

_Generally_ the tax consequences of work depend on where you are physically located when you perform that work. You _generally_ owe tax "allegiance" to your tax home on your worldwide income.

However, if you're working outside your tax home -- physically located in another country while doing translation work, for example -- then you _might_ owe tax to the place where you're working. (And generally able to take a tax credit for that foreign income tax against your tax home's tax return.) Offhand I know of one interesting example of that phenomenon: New York State. Step foot in New York State, do any work, for any period of time, and you're legally liable for income tax to that state and are obliged to file a non-resident income tax return. It doesn't matter if you have immigration permission or not, if you're a "tourist" or not. Work is where you perform it, and New York State happens to have the lowest possible threshold. (Yes, many people aren't aware of that legal fact, and a few are aware of it but ignore it. However, New York State is getting rather good at collecting in such cases.)

The length of the wire (or wireless connection) between you and your client doesn't matter one bit for these purposes. However, in some cases you have certain legal responsibilities to the client's country. To pick a somewhat farfetched example, if you're translating something the client's country considers pornography then you could have a legal problem in the client's country.

Anyway, there are some general "rules of thumb," but the exceptions are frequently interesting.


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## Bevdeforges

To add a bit to BBC's reply, it is indeed possible to wind up having to pay taxes in more than one jurisdiction - depending on the residency laws of the various countries you pass through in the course of your wanderings. That can also be a big disadvantage of the "sole trader" business form - since in many countries, "self-employment" isn't formally registered and the tax liability falls onto the individual as part of his or her personal tax obligation. 

The other big factor is that of tax treaties between the various countries - which may or may not exist and may or may not give adequate relief from the dual taxation threat.

Unless you're looking to incorporate your business, you may find it difficult to "register" your business in a country other than the one in which you are considered tax resident. I think much of the discussion up to now has been assuming that you are going to go for some form of incorporation, but reading back through this thread, I'm not so sure that's your intention.
Cheers,
Bev


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## pauldf

Thanks a million, Bev and BBC Watcher, for all your helpful advice. I see you've recently been giving useful advice to a UK and USA citizen who want to get married, and judging by your numbers of posts, have given loads of advice in the past on a host of other issues. I find this really refreshing, when most of the people I meet on a daily basis expect something in return for any favour.

Anyway, I think I will go for Wyoming. It's so cheap that if it doesn't work for some reason, I haven't wasted a lot of money. If I explain to the translation bureau that I'm not actually living in that time zone, and perhaps put a European address on invoices, I expect it will be OK. I wrote to a couple of the Bulgarian agents - although their standard information was in good English, when I wrote back asking for specific details about something, they didn't reply, which maybe suggests their English isn't really that good. But still in my case, as I know some Russian and am often in Eastern Europe anyway, I think Bulgaria is probably my second choice.

I'll definitely recommend this forum to any expats I meet, whether they have problems to be sorted out or not!


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## BBCWatcher

I don't see any problem with incorporating in Wyoming and establishing your titular business headquarters there. Tip: Google Voice offers free virtual phone lines with voicemail and SMS if you have a Gmail account, though you might have to be physically in the United States to apply for one. (On vacation in the U.S., for example.) I think you can choose a Wyoming area code from their selection list when you apply. You can run Google Hangouts on your mobile device to receive/make calls and just shut off Hangouts when you want voicemail to pick up. I've been very happy with that service for years, starting when I was a U.S. resident.

On your letterhead I also don't see any problem listing two company locations: your Wyoming location (with registered agent and Wyoming phone number) and your European office -- though better yet I'd just list a European phone number. (Keep it simple.) Caution: You still likely have tax rules to follow depending on your physical location, and of course you will have your annual LLC report in Wyoming -- though that should be simple and, with zero U.S. physical presence or assets and no U.S. personhood, you should have no other U.S. tax or reporting obligations.


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