Any person living in a country other than their native, whether temporarily or permanently is an expatriate. United States is the only developed nation, which taxes its expatriates even if they are paying taxes in another country. According to an estimate, about 6.3 million Americans worked outside the US in 2012. Availability of low cost labor, raw material, lesser living expenses and more savings can lure entrepreneurs to destinations aboard.
What must you know before setting up business as an expat?
A thorough research must be done before you relocate yourself to do business outside your native country. There is a lot of information you must know before you take the leap, like the local laws, business licenses, registrations, language preferences are a few to list.
In developing countries, the infrastructure could be below the US standards, it is important to find out, even if they lay the red carpet for you. Internet connectivity, roads, electricity, telephone services, transportation services could be atrocious. In some places, the legal system is snail slow, where any disputes if arrive, will take a long time to decide.
You have to make a list of pros and cons to help you decide.
Tax facts to check up on if you are an expat business owner
It makes perfect sense to file a return even if you are not required to do so or no taxes are due since the time frame for an IRS audit is three years, it will definitely help you avoid any legal complications later. Like there is an obligation to pay taxes, there are provisions to help you reduce the taxes. You have the right to utilize these benefits to lower your taxes.
Legal opinion from qualified professionals will help you understand your tax liabilities in a better way. They are the people well versed with the laws and their provisions.
Top biz markets for an expatriate
Latin America is one of the best bets to set up a business.
Panama: Being an American the coolest thing here is that you do not require any special type of Visas here. The business infrastructure in Panama is outstanding with an excellent internet penetration. Also, the business community here is open and hospitable for expats. The rents of commercial places are not that high and you can find a lot of English speaking professionals.
Ecuador: Here too you will not require any special visas, plus there is no restriction on the type of business you do. The locals will treat you like natives, knowing a little bit of Spanish will help especially when you want to do business with them. If you think of indulging more with the tourists and foreigners then English is the perfect language of use.
Colombia: Amazingly, there is a 120% increase in the incoming international flights to Colombia in the last decade itself. As more and more expats, visit this place every month the demand for English speaking tours and services has risen sharply.
Belize: The biggest advantage of doing business here is that people speak English in this country. You may take the advice of some expatriates who are already doing business here. Staying here for a couple of months prior to setting up a business is a good idea.
Although US embassies and chambers of commerce in the country of your choice will help you quite a bit with the introductions to the banks, business consultants, attorneys etc. However, experts are of the opinion that visiting the destination of your choice, connecting to people directly, and exploring their culture is a better idea.