Legal and tax requirements for an internet business from Australia
Asked by: Caroline - 8 July, 2011
Hi
I plan to start an internet business (like many), but will not have any physical presence in the USA. My first foray will be selling information products. As such, do I need a LLC to operate? Am I obliged to pay US taxes? Or can I just run my business from Australia using my existing company, merchant facilities and pay local tax?
Similarly, do I need a LLC, agent, etc if I run a drop shipping operation?
Thank you
Caroline
Hi
I plan to start an internet business (like many), but will not have any physical presence in the USA. My first foray will be selling information products. As such, do I need a LLC to operate? Am I obliged to pay US taxes? Or can I just run my business from Australia using my existing company, merchant facilities and pay local tax?
Similarly, do I need a LLC, agent, etc if I run a drop shipping operation?
Thank you
Caroline
Answered by: Robert Kowalski - 14 July, 2011
Caroline,
If you are selling information products only you might just need to get an EIN for your Australian company, if you use PayPal to collect payments from the US clients. Technically, your customers can be anywhere in the world, and it would be a nightmare if you were required to register your company in every country where you might have a buyer.
If you expand your business to sell physical products that need to be delivered to the US clients you could still operate under your Australian company, however if you plan on leasing a warehouse in the US or use a service such as Amazon's FBA you might need to collect sales tax on some of the transactions, which means your Australian company will need to obtain a Sales Tax ID in those states. At this point it might make sense to consider forming a US entity instead.
Caroline,
If you are selling information products only you might just need to get an EIN for your Australian company, if you use PayPal to collect payments from the US clients. Technically, your customers can be anywhere in the world, and it would be a nightmare if you were required to register your company in every country where you might have a buyer.
If you expand your business to sell physical products that need to be delivered to the US clients you could still operate under your Australian company, however if you plan on leasing a warehouse in the US or use a service such as Amazon's FBA you might need to collect sales tax on some of the transactions, which means your Australian company will need to obtain a Sales Tax ID in those states. At this point it might make sense to consider forming a US entity instead.
