i'm thinking of starting my own online business selling handmade clothing from south america. this business will be strictly online, so i won't be looking for any retail space or holding 'main headquaters.' i plan on doing administrative work and such in south america but i want to target my business to european and american audiences. if i get some consumers in south america that's great too.
so here are my questions. i'm an american citizen living overseas looking to work with possible textile contractors or employees to be a part of my business. if i hire employees, i can request for them to work from home. from what i've read so far, and to my understanding, if i work with contractors then i don't have to worry about them paying u.s. taxes or me having to deduct my payment to these contractors in order to pay my taxes. i assume naturally these contractors will pay taxes to their native country and not to the united states. but if i decide that hiring employees is a better option for my business, what tax laws and regulations must i follow? these employees will be working in their native country and they are non-u.s. citizens so i assume they won't have to pay taxes to the u.s., right? why should they pay taxes to the u.s. if they won't benefit from u.s. services like social security, u.s. health care, unemployment, etc. i may be wrong but that's why i need advice.
my other question is, would my business be considered south american? am i still able to register my business as u.s. based even though i do business and currently live overseas? i use to live in new york, so do i file my online business in new york? i don't have dual citizenship anywhere so i'm basically just an american citizen starting an online business who happens to be living overseas.
i also am not sure if an online business is considered self employment or a small-business. any help on that too?
this is pretty complicated for my first post so my apologies! it's just that i really need some advice on this and any help would be really helpful!
If you are targeting an online business that's aligned to the crafted clothing niche, you have to draw US traffic to your website. You're probably correct about the contractors and US employees; since they are working within their constituency, paying taxes will be entirely their issue. As for the license, you might get an internet business license or LLC registration(do your due diligence on this aspect of things, because the financial and administrative ramifications can be massive).As for your online business...I think clothing business can be really tricky. What you could do is target area centric distributors to act as affiliates of some kind; that is to say, local affiliates bringing local solutions to local people. Like, say, in case of production jobs New York, I firmly believe clothing works better in the offline state.So you could merge the online advantages with the offline distributors, and the combination might work wonders. Although the entertainment industry and the clothing line are different (as actors and clothes would be), I firmly believe arranging an army of local distributors and corporate jacks may be the ultimate answer.Best Regards,Humperly
I'd like to add that if you are going to target different markets, you should have a website for each one. For example you would have clothes.com for the American market and clothes.co.uk the UK market. This will help with SEO as it is hard to rank one site in multiple regions. Also its a good idea to incorporate and to setup relationships with contractors within each market. This will help cut down on shipping expenses for your business and delivery times for your customers.
BobK | Community Administrator |
3/9/2009 - 7:37 am
Hi JJ,
From what I gather, you are starting an online business in another country, and hiring and/or contracting with citizens of that country to perform work for you; and you don't plan on operating in the U.S. or otherwise hiring U.S. citizens. Is that correct?
If that's the case, regardless of your citizenship, you will need to comply with the rules of running a business in that country. You do not need to be concerned with complying with U.S. tax and employment law as it relates to your employees because they are not U.S. citizens and technically, your business is not a U.S. business.
Nonetheless, as a U.S. citizen you may be taxed by on your worldwide income, so you'll need to report your net profit on your Federal tax return and pay any taxes that are due.
I suggest you check out the following IRS pages, which may apply to you:
humperly | Window Shopper | 5/10/2009 - 3:34 am
TomL | Creator | 5/6/2009 - 8:01 pm
BobK | Community Administrator | 3/9/2009 - 7:37 am
- U.S. Citizens and Resident Aliens Abroad, Filing Requirements
- Expatriation Taxes
Message Edited by BobK on 03-09-2009 07:38 AM Message Edited by erinirving on 03-09-2009 03:54 PMJoin The Discussion
You must be logged in to join the discussion. If you already have an SBA Community account, Log In to join the discussion.
New users, Register for a new account and join the conversation today!