I am a Canadian citizen going to school in the U.S. with a F-1 visa. As such, I'm not permitted to work off-campus in any field not directly related to my studies.
I'd like to start up an internet-based comp, selling products online. Some of the products would be shipped, others directly downloaded.
Option 1: Just start a Canadian corp.
Option 2: Use an American corp as my operating business, which then sends money to a Canadian holding company.
Both options honour my visa restrictions (since I, as an individual, would only be making money on the Canadian side).
Comparing the two options, the first is less complicated. However, my thinking is that the second would result in a smaller tax hit: the only corp taxes would be on the American side, and the only individual taxes would be on the Canadian side when I withdrew money from my holding comp. (by contrast, option 1 would mean getting hit with Candian corp taxes, which I assume are higher).
Is this correct?
1 corporation or 2?
Moderator: Mark T Serbinski CA CPA