Where should you incorporate your Amazon FBA business? It’s our second show on the Global From Asia E-commerce series and while applications are still coming in (and you have until AUg 8, 2017 to apply) – I need to prepare how to incorporate this new company. While I’m here on the Hong Kong and China border – applicants – even Chinese factories – are suggesting we set up in Delaware. For me, as a US Citizen, it seems a necessary thing to do in order to sell on Amazon FBA and I can’t use my HK corporation for it. But as we talk on the show, there is something called transfer pricing and more tax planning. Its an exciting show – and we bring on Mike Hartman to share, let’s tune in!
This one we have quite a few show notes, you can check them out at www.globalfromasia.com/ecommerce002
Topics Covered in this Episode
Welcome Mike Hartman to the podcast!
We’ve been talking about getting you on the show for some time now – thanks for making it. We met at Rise Conference last year (2016) and it’s cool to have you here and sharing. You are living in Romania doing FBA, Delaware incorp, and probably a bunch of other awesome projects, loving it man! Welcome to the show
Getting started on Amazon FBA
So, as you know Global From Asia and I are getting back in the e-commerce game – becoming sellers and sharing it live on a weekly update. Currently still vetting applicants for business partners but need to prepare the company structure and the Amazon Seller Central account – so my first question is a few parts
Do we need to incorporate right away?
We need to make founder agreement and other contracts – should we just get started by me listing as an individual seller in Amazon USA? Can we switch from an individual Amazon seller central account to a company account later?If yes, is it a tedious process?
My liability if I sell in my own name
So during the time I sell as a US citizen individual – if there is a product liability issue – I can be sued personally right? But once we transfer over to the company name I will be protected under the corporate veil right?
Where to incorporate
I even am a partner in Unipro Consulting Ltd in HK where we help business owners setup in Hong Kong – but I have this idea that because I’m a US citizen I shouldn’t do the Amazon FBA business in HK or outside of America for that matter. My experience has been when I started selling my kindle books, I wanted to use my HK consulting company Shadstone Limited so opened the author’s account that way – but it asked if anyone in this company holding more than 10% shares was an American. It was a scary screen and said under US law code blah blah blah if you lie you will go to jail forever, etc etc. So I said, yes, there is an owner of this company who is over 10% owner – ME. Then it went back to the home screen and said you made a mistake an need to file as an american individual or a us company then. I am now selling my books in my personal name as a US citizen – but for this Amazon seller account – I don’t want that liability so need a corporation.
So - US citizens on Amazon FBA need to do US Incorp, how about others?
Seems like Americans like you and me have no choice to sell on Amazon via a US company. Do you think others should also do the same?
Foreign corporations and US Citizens
So if we do this – actually 25% ownership is Global from Asia – we have partners in there like Claire Chen and Andrew Voda – I want them to benefit from this venture as it is a GFA investment. So should the company in USA – should my HK company be the shareholder – or me as an individual US citizen? I guess I don’t want the US tax department on my behind for looking shady here.
Foreign business partners in a US corporation
So we will welcome and hope to have – shareholders from around the world. Is there any issue having Mainland Chinese partners, Europeans, etc in this corporate structure?
Any thought process on which state to choose?
We’re thinking Delaware Corporation- that is your speciality – but there is also Wyoming and others
US banking with a foreign owned US entity
Banking is a pain in the butt everywhere. If we open this US company with foreign partners, how will bank account application be?
Short term vs long term
Well – we want to get started selling on amazon right away. Especially for the Christmas rush and Black Friday sales in America. I guess I’m willing to be the US citizen who signs up as an individual to start and then later transfers the listings to the company Amazon FBA account. Is this the right logic and strategy and is it possible and smooth?
Any other tips you can give us on this new e-commerce venture
Something I should have asked you but didn’t that you think we should be aware of.
About your service
So thanks so much for putting your knowledge out there and making it happen. How can people find you online if they need your services – and heck you do quite a bit of things – one being Delaware formation – how about others.
People / Companies / Resources Mentioned in this Episode
√ Mike Hartman’s special FBA service – 500usd w/ EIN + tax help
√ Michael Hartman on Linkedin
√ Michael Hartman on Facebook
√ LLC vs Corporation
√ Rocketlawyer.com – founders agreement, operating agreement
√ Transfer pricing – previous episode with Mike Bellamy
√ Godaddy bookkeeping plugin for FBA
√ Nevada – high fees, public shareholders
√ Wyoming – 100usd/state fee, but has sales tax, 0 income tax, shares shareholders after 1st year
√ Payoneer Business account in short term remotely
√ Amazon lending 9%
√ Kabbage for capital after 6 months of sales
√ *** application for this new Amazon FBa business – due Aug 8 midnight HK time **
Please show support of our GFA media sponsors as they make this podcast possible to be free!
√ Aureliapay Cross Border Payments in Asia
Episode Length 38:41
Thank you Mike! Great insights, and I am enjoying this new e-commerce series – and I hope you are too. We are diving deep into the nitty gritty, and I am mentally preparing – as well as filling my own notebook up as we set up this new Amazon FBA business.
So if you are interested in applying – I would love to have you part of this new Amazon FBA journey – and while there are so many great applications, we will have to narrow it down. But don’t worry – everyone who applies will get a special gift from me for their time and trust in applying. Plus – all of you will get to follow along on this journey. Even though I am having Amazon FBA friends BEGGING me to not be stupid and tell everyone the product – they said it doesn’t work like this, etc etc. Let’s do it – and I am feeling great about it.
Next Tuesday we have the GFA interview series, part 2 with Christopher Oliva on mass production oversight, and then next Friday is episode 3 of this GFA E-commerce series. So many amazing things to share, let’s do it one step at a time, peace!
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