incorporate in the us or canada

[ajaat]

i am in a situation where i live in toronto. i have purchased a company that does most of its sales over the internet to the US in different states. where should i incorporate my business?

in toronto.. taxes are high here.
in buffalo, closest US city to me
in michigan, where i have family and i could use their address.
or in florida where taxes are low
or delaware where state taxes are low

the only us address i could use is the one in michigan, else i could incorpate as an international company wiht a canadian address in the us.

[Mark T Serbinski CA CPA]

If you are operating a business from Canada but you do a significant amount of business in the U.S., you should consider a structure something like this:

1. Use a Canadian corporation (CCPC) as your main operating entity. This corporation will directly record business originating in Canada.
2. Incorporate a corporation in the U.S. to handle your U.S. transactions. Tax planning can be carried out to optimize your overall tax in repatriating your profits to Canada.

The U.S. entity should be owned by the Canadian corporation to simplify the tax planning process.

Many people incorporate in Delaware, since there is no state tax unless business originates there. You will also need to apply for a certificate of authority if you will have an address or other signifgant presence in any other state.