abrarsalam
Junior Member
Hi. I am planning on starting a web/ smartphone app company. Currently it is just my friend and I. I live in Chicago, USA, and my friend lives in Karachi, Pakistan. As of right now we are equal 50%-50% founders, owners, and partners. Neither of us have any plans to relocate to either USA or Pakistan. I currently work full time for another employer and will continue to do so until I can afford to quit my day job and focus on the business. I am trying to find out how I should legally setup/ register my company. The business will have customers worldwide.
1) Considering that we live in different countries, how should we register our company? We want to make sure we have the least liability and have the lowest amount of taxes to pay. Should it be a LLC or S-Corp or something else?
2) What are the tax ramifications for me since I still have another income, and don’t want it to be included with the other business or have it taxed at a higher rate because of the new business’ success. I guess I just want to make sure I am paying the lowest legal amount of tax for both my personal income and my new business’ share.
3) How does taxation work for my partner in Pakistan? I am sure Pakistan has its own rules for taxes, but will my partner have to pay taxes in US as well as Pakistan?
4) How should we pay each other? Would we pay ourselves as employees depending on how we register the business? What would be the optimal way of getting compensated while not getting taxed that much?
5) Let’s say in a few months we decide to hire a few programmers in Pakistan. How would that work? How do they get paid? What would be the most optimal way?
Answers to the questions above and any other advice would be very helpful. Thank you very much for your time and help!
1) Considering that we live in different countries, how should we register our company? We want to make sure we have the least liability and have the lowest amount of taxes to pay. Should it be a LLC or S-Corp or something else?
2) What are the tax ramifications for me since I still have another income, and don’t want it to be included with the other business or have it taxed at a higher rate because of the new business’ success. I guess I just want to make sure I am paying the lowest legal amount of tax for both my personal income and my new business’ share.
3) How does taxation work for my partner in Pakistan? I am sure Pakistan has its own rules for taxes, but will my partner have to pay taxes in US as well as Pakistan?
4) How should we pay each other? Would we pay ourselves as employees depending on how we register the business? What would be the optimal way of getting compensated while not getting taxed that much?
5) Let’s say in a few months we decide to hire a few programmers in Pakistan. How would that work? How do they get paid? What would be the most optimal way?
Answers to the questions above and any other advice would be very helpful. Thank you very much for your time and help!