The type of business formation that we recommend above all is the limited liability, know as LLC in the USA or LTD in most countries. It usually involves ownership from shareholders and opens up possibilities.
There are jurisdictions that do not require book keeping for a limited company, but we recommend to hire a small local accounting firm to keep the books. It might prove useful if at some point you need to bring new investors on board, or if you receive an offer to sell your business.
From an accounting and fiscal point of view, there is likely less red tape involved in tax and employment filing if the company is incorporated in the founders jurisdiction. The only reasons for wanting to set up the company in another jurisdiction would be to simplifying the tax filing for sourcing or order fulfillment, by for example having the company operating in the same jurisdiction as the suppliers or the warehouse.
- Switzerland used to have a welcoming fiscal system, but since the 2008 tax evasion controversy, the government has reversed its policies, making it extremely difficult to setup and run offshore companies in the country.
- Being within one hour away from most local OEM and ODM of Mainland China, Hong Kong is a great jurisdiction to set up a sourcing company. Entrepreneur Marco Schwartz documented his own experience from 2014, suggesting to hire local firms such as Startitup.hk, Bridges.hk or JumpStart for setting up an offshore Hong Kong company with limited liability.
- In the United States, Wyoming is currently the state that seems to have the best fiscal system for setting up an offshore company according to FlagTheory.com.