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Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 300
Experience:  Former IRS Revenue Agent
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I'm a US citizen opening an ecommerce business in the Turks

Customer Question

I'm a US citizen opening an ecommerce business in the Turks and Caicos Islands. I’m having trouble finding affordable credit card processing that works with a shopping cart. The bank in the Turks and Caicos does not have an e-commerce option and basically only offers terminals on in their network. We’d have to collect credit card info from the site and then run the charges by keying them in one by one. I don’t like this for several reasons. Since 2001 it has become impossible for a foreign corp to open a US bank account As a work around I could form a US C corp that is wholly owned by the our Turks company. Open a US bank account for the US corp which would collect the credit card funds from a US card processor and then wire the funds to the our account in the Turks. Since the US corp is nothing but a shell and has no income since all of it is passed on to the parent company. BTW: we are only selling merchandise in the Turks to people in the Turks. Is there any US tax obligation?
Submitted: 3 months ago.
Category: Tax
Expert:  Dr. Fiona Chen replied 3 months ago.

Dear E Commerce,

The Tax question is the easiest one. If this is a Turks company which does business only in Turks and have nothing to do with the US, of course, it does not pay tax in the U.S.

However, as individuals, U.S. citizen taxpayers are taxed with worldwide income.

Since you are e commerce, can you use Pay Pal? Will Discover card work with you? Or ING?

If you are on line only, how do you enter credit care 1 by 1?

Do you mean that you have credit card business but you are doing business as retailer on a geographical location?

Can you find a local CPA firm with international presence but based in the US there to ask them? You must not be the only business with the issues.

However, I would suggest you not to establish a mother (holding) company in the U.S. just for the purpose of using the credit cards. This is not a good idea. I don't know much about the environment in other country. But in the U.S. for tax or business regulatory organization and homeland security rules and regulations, any shield companies like this type can cause you big problems unexpectedly. When I visited Nevada here, they consider CPA opening an account is a risky behavior. Can you believe it?

Can you find another Europe country closer to Turks if this is the only way you can process a credit card.

The best way is actually use the local way completely since that is where you are.

Please feel free to follow up with questions. Otherwise, I am ready for you to evaluate my answer with your satisfaction level.


Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP