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Business Registration And Taxes For Digital Nomads

Two questions I get asked regularly from people who are setting up their own online businesses:

  • “Should I register my business?”
  • “What about taxes?”

Unfortunately there is no easy answer to either of those questions, as it very much depends on:

  • Your country of citizenship
  • Your country of residency
  • Where you live now
  • If you plan to travel around a lot in future
  • And whether or not you’re a fan of Michael Bolton

Okay, maybe not that last one.

But since there is no easy answer to this stuff, the best advice I can give you is to contact the guys at FlagTheory.com.

They are experts on the topic of tax and business registration for digital nomads, so just go to their contact page, tell them a bit about your situation, and they’ll jump on a free consultation call with you to run through your options and provide some recommendations.

  • Update: apparently Flag Theory no longer offer free consultations ☹️

That’s exactly what I did a couple of years ago, and it saved me a ton of time, effort and frustration.

I’ve been running my own online business since 2011, and for the first four years, while I was off traveling around the world without flying and visiting a whole bunch of countries, I didn’t actually have a registered business.

I did try registering one in Ireland (where I’m from) but turned out it was illegal for me to have a sole trader business there, and not stay living in the country.

So I decided to just wing it and went off traveling for those four years, earning money online through freelancing without having any registered business at all.

  • Warning: I was operating in a bit of a grey area there, and I don’t necessarily recommend it, but it worked out fine.

Also, during those first four years, I didn’t have to pay any taxes because I didn’t stay long enough in any one country to be considered a resident.

I should emphasize here though that it may be different for you, depending on your country of citizenship.

If you’re a citizen of the United States, for example, you will always be on the hook to pay taxes to the US government, even if you’re no longer a resident there. So definitely do your own research on this, or contact the guys at Flag Theory, because even though I may seem like an incredibly knowledgeable fellow, I am by no means an expert.

After my four years traveling around the world without paying taxes and without having a registered business, I decided it was time to become a bit more legitimate.

So I went and set up a company in Ireland, but that proved to be a bit of a nightmare. I still wasn’t living in the country so I had to pay an accountant each week to manage things for me, and I had to report and pay VAT and there were a bunch of other issues that meant it was all just a gigantic pain in the ass.

That’s about when I found and contacted the guys at FlagTheory.com.

They ran through a few options with me and in the end I decided to shut down my business in Ireland and register it anew in the United States.

Turns out you don’t have to be a US citizen or resident to register a business there, and if you register as a one-person LLC, there are some very nice tax benefits as well.

So that’s been my setup now for the past few years and it’s been great so far.

  • Very little expense
  • Very little hassle
  • All completely legitimate and above board

The same setup might work well for you. Or there might be something even better for your situation. Again, I recommend you contact the guys at Flag Theory and they’ll steer you in the right direction.

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6 Comments

  1. I don’t know about the US Joe but the Transferwise borderless business account gave me an easy way to get a USD bank account so I could get paid from a US client.
    Also Niall FYI I went through the process recently of becoming an Estonian e-citizen in order to register an EU company there which can be fully managed digitally. It’s early days, but I’m pleased with how everything went so far.

    1. I didn’t bother opening a business bank account, Joe. I already had some US bank accounts from when I lived there years ago, so I just used those and saved myself the expense.

      That’s not ideal though, and at some point I’ll go to the trouble of opening a proper US business bank account. The Transferwise borderless business account sounds like the way to go.