Can Canadian online business sell in the US market?

geejoe
New Member



Joined: 26 Mar 2008
Posts: 1
Location: NJ

Posted: Wed Mar 26, 2008 7:10 am

 

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I am a Canadian citizen living in US on H1B. I would like to start a online business and sell goods to the US market. I can't start the business here in US on my own as I am on H1B visa. How can I do this?

Can Canadian online/web business sell to people in USA? What are the legal and tax formalities involved?

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Steven
CanuckAbroad VIP



Joined: 28 Sep 2007
Posts: 974
Location: Calgary

Posted: Wed Mar 26, 2008 9:48 am

 

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Tricky on an H-1B. Depends on whether you plan on moving back to Canada or not at any point.

The official way of doing it would be to apply for change of status to an immigrant investor.

What you could do though is start up a corporation and dump all the money in there and just leave it there until you move back to Canada. Only snag there is that the salary is tax-deductible against corporation tax, so you'd be paying higher corporation tax, plus obviously you would have no income from it. Plus you'd also get hit with a massive tax bill in Canada when you paid out all the money, unless you did it over a number of years.

And technically you are "working" albeit for zero immediate remuneration.

The problem on an H-1B is that you are a resident of the US. If you were a resident of Canada you could start up a Canadian corporation and dump all the money into the Canadian corporation and pay it out that way. But if you don't file a T1 you can't do that, because it would all end up on your 1040 as income from a foreign investment ($$$). Also it would be a non-resident Canadian corporation, which means you have to pay standard corporation taxes, rather than the lower rates that apply to corporations run by resident Canadians.

Hmm. first time ever a TN-1 had advantages over an H-1B I think.
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Steve.

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