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Living in Germany. Customers in the US. Making $600 a month. Should I incorporate now?

by AntonioBanderas

I have a jobs portal for Hispanics in the US. 7k of monthly visitors and over 100 people paying weekly 2 dollar subscription. I expect it to grow to at least 200 subscribers this year. I live in Germany. So far I have not incorporated or done anything about the tax or legal aspect. I'm quite ignorant in this regard. I receive the money from Stripe to my bank account and then just use it. I pay 20% of the money to a developer that helps me out building the product.

I am mainly concerned about legal/financial consequences that this may have on my personal finances or my "company's". Am I doing anything illegal in the US or in Germany by not paying taxes or having a proper company? Should I incorporate or wait one more year? And when incorporating, are any of these options significantly more convenient: a) incorporate in Germany b) in the US (Stripe Atlas) or c) in Estonia (Xolo)?

AntonioBanderas's avatarAntonioBanderas
on May 23, 2020
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  1. 1

    I'm not a tax expert, but I live in Germany as well. I have an accountant who handles my freelance taxes but last year I registered a company in Estonia. the process is relatively easy and fast and probably way cheaper than germany. and I think in your case it would cover you legally as SaaS. you can chat with LeapIn or 1Office and they will give you a better answer

    jamalx31's avatar jamalx31
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    6 years ago
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      And also, if I incorporate in Estonia or the US, does that mean that I don't have to answer to the Finanzamt or pay any taxes in Germany anymore?

      AntonioBanderas's avatar AntonioBanderas
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      6 years ago
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    2. 1

      Hey Jamal, thanks for the quick response. I have a few questions if that's ok:

      1.- What are the benefits of registering at all? I'd like to do it if it helps me somehow, but from where I am now I can only see costs in time and money and no benefits. Also I don't know when is that not incorporating or paying taxes becomes 'ilegal'.
      2.- Are these things tied together (paying taxes and having a company)? When and how did you start paying taxes yourself?
      3.- How much do you pay your accountant? Is paying an accountant a "must" if I don't know much about taxes in general? Is it worth if I'm making less than 1000 euros a month?

      AntonioBanderas's avatar AntonioBanderas
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      6 years ago
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        1. well I didn't wont to know the disadvantages of not doing so hehe. I moved to Germany couple years ago and I had to do it to get my residency. From my experience the tax office is the worst to mess with.
        2. you can report taxes as self-employed, which i do as a freelance software engineer. but once you register a company you HAVE to report taxes. I start reporting taxes from the moment I moved to germany and my accountant took care of it. he's great and help me a lot in the visa process ( I can introduce you to him and he would definitely help you make the right decision, he's a tax adviser btw )
        3. people told me it's relatively easy to do taxes as self employed if you invest the them to learn how to do it. I just hate doing it and I don't speak german yet so it's not an option for me. having someone doing it for you cost around 1000€ a year more or less.

        again i would advice you to talk to an expert but for sure don't wait for the tax office to come knock on your door

        jamalx31's avatar jamalx31
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        6 years ago
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          Thanks man this is very helpful. Yes I would appreciate an intro to your accountant! Whats the best way to talk? Are there private messages here (my first time in indiehackers)? Anyways my email is casas.farach@gmail.com

          AntonioBanderas's avatar AntonioBanderas
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          6 years ago
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