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Setting Up a New Business / Deciding on the Business Structure

Asked by: Ash Kothari - 7 August, 2013 Hi,

I am a Canadian citizen living in Toronto and planning to start a drop ship online store in US with my wife as a second partner (who is also a Canadian citizen).

Since I will be marketing to customers in US and all my suppliers are based there only, I would like to know the right business structure / setup for me. I also plan to start stocking and delivering products from fulfillment centers in USA after sometime.

Should I register my business in Canada or form a LLC in USA in a tax free state like Delaware or a sales tax free state like Wyoming.

What would be the better option?

I need your advice.

Thank you.
Answered by: Robert Kowalski - 7 August, 2013 Ash,

Having a company in the U.S. for US based business is probably a better idea than running the business under Canadian company.

As far as taxes go I would like to refer you to two questions, answered by our tax expert Wray Rives:

- Income tax question (foreigners): 

- Sales tax question (drop-shipping based business):


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