[ HTJ Podcast ] WEBINAR – Take Your Singapore Tech Business To The USA- 27th April 2021
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So, we’re now live on Instagram. So as always, I do live streams to an audience on zoom, as well as on Facebook live, but I use Restreams so I have been unable to figure out how to integrate into Instagram on to what I'm doing on using restraints on unrestrained. I'm using it to stream onto Facebook, LinkedIn on Twitter. But so, Instagram, I use my phone, so that's why it's weird, so I apologize for that.
So, what I'm going to do is let everyone in and what I'll do so I’ll disable the waiting room, mute everyone to make it easier. Okay. So, we're streaming this live on different platforms, mainly zoom. So, I'm talking to zoom, but it's also on Instagram, on Facebook, LinkedIn and YouTube as well.
Sorry, let me just make sure that it is, okay. Yeah. So, we're good. All right. So, thank you for joining us this evening. We are going to talk about companies in Asia in general, and in Singapore, in particular who want to move to the US. So, thank you for those who send questions in advance, I did get your questions and we would go through them. But what I thought I would do is just go through a quick slide deck, which would, speak to the larger issues. Now you would understand that this is a huge topic, so it's absolutely impossible to cover everything in like one session.
So, what we want to do really is talk about what we believe to be the key issues that you should be picking up with your advisors. And hopefully it will arm you with the right concepts to engage your advisors in a more meaningful way. So, without further ado, I'm going to share screen. I apologize for those on Instagram that can see the deck, but it's really quick and very, very superficial, I'll talk it through. All right. So just to provide context for who I am, so my name is Derren Joseph and I work with the international tax team, most role in Asia Pacific.
So, we have 30 offices and just over, I think, 13 Asian countries. So, we're as far North as took envisioning and all the way down to Melbourne and Sydney. I've been sitting in Singapore since 2013. So, I've been in Singapore for a while and I've been based in Singapore, even though I kind of move around. Well, pre-COVID, I probably moved around a bit more, move around and work with clients and in various parts of Southeast Asia and elsewhere as well.
Because I am US qualified, I'm legally obligated to say, you know how it goes, but nothing that I say here should be construed as tax advice. We are having a general conversation with general principles, again, treated as an education piece. I'm trying to provide you with concepts that you would need to do. You need to leverage to more meaningfully engage with your chosen advisors. So, I may be a tax advisor, but I'm not your tax advisor. So please keep that in mind, nothing is advice. And more importantly, nothing that I say here should be encouraging you to pay less than your fair share of taxes in any jurisdiction in which you're exposed.
Now, having said that, why do you ask, why do companies in Singapore and elsewhere consider moving to the US and I put up some few key points. Number one, when people come to us to raise funds, they have a valuation based in Singapore, you know, the market, the liquidities at a certain level, and everyone tells them, you have a great idea. You take this and you domicile this company in the US and your valuation will be tax. So, they’re regardless of whether, you have an opinion or not, this source of capital, especially for tech companies, it is venture capital central is probably going to be the US.
Some people have commercial reasons as well. Some people talk to us about branding that thing, the company or their value proposition will be stronger if it is that they are based in the US as opposed to Singapore. So, you know, it really is an individual decision among the founders or on the board of directors as to what your rationale might be. But, you know, it could be anything. If you have any particular reasons that I didn't really touch on here, please feel free to comment below, just write your comments. I'll be interested to hear and to read your, your point of view now. In terms of your considerations, you know, on the surface, you know, sometimes you Google and it appears to be relatively simple, I just need to incorporate, and there are lots of websites that will do it for like $200 or less, you know, get me a company, but it's a little bit more than that.
It is also figuring out, okay, you know, there are 50 States. Like, where are you going to incorporate? You know, I know the default is Delaware, but for, you know, Delaware has done a great job in terms of branding and positioning itself. But if it, is you going to have boots on the ground, then you would actually need to consider being incorporated in the state in which you will have nexus. So that the thing that the US it's 50 different States and each one, you need to get permission to do business. I know it's one country, but they, you know, each state has its own rules.
So yes, you can incorporate in Delaware, but that does not give you permission to do business in New York or Florida or California. So, you need to have to sit with your advisors and work that through, like, where are you going to be based, or where are you going to be hiring staff that that would have some bearing. And then you need to think about banking as well. So, incorporation is relatively easy and fast, you know, probably not as efficient as Singapore, but it is pretty efficient banking. However, is a different type of challenge. So, with the travel restrictions, typically with a traditional bank, you would need to actually be based. You need to physically go to the US to open a bank account, but that is of course, a bit challenging right now because non-essential travel has been blocked.
We'll talk about immigration later on, but there are challenger banks like TransferWise and, you know, a whole bunch of others. I'm not advertising, I'm not promoting any one over the other. All I'm pointing out is that there are a lot of non-traditional banks now. Non-traditional banks work with some business models, but not so well with others. And, again, speak to your advisor before making that kind of decision, because it has longer term implications. Then I want to talk about substance. You know, just for me, a company is no big deal because the rules of Singapore, pretty clear, you know, if any company, regardless of where it's incorporated, if management and control, those are the two chests, right.
Management and control, Singapore. If management and controls being exercised from Singapore, you have a Singapore company so it may kind of, you know, it may be kind of counterproductive. Yes, you form a company in the US, but you can operate it from Singapore. It's going to be treated like a Singapore company. And it creates all sorts of complexities. The point is that you probably want to have a conversation with your advisors about having substance in years. What do I mean by that? You need to have key decision makers, someone who is credible, someone who's at the right level, representing your interests in the US and being attached to that company. So that if challenged, it will be easier to make the case that this is not just a shell company in the US, it is an operating company doing real business in the US because you have boots on the ground there.
Compliance. Compliance can be a minefield. I’m not just talking about taxes here. I think I don't need to tell you that US taxes compared to Singapore or Malaysia or Hong Kong, US tax is a pretty complex. You know, you have federal taxes, you have state taxes, you have city taxes, you have local taxes, you have direct and indirect taxes, which we can go into later on because someone asked questions about that. So yes, compliance is a big deal, but there's also the securities and exchange commission, which is equivalent of the monetary authority of Singapore. Kind of the MAs in Singapore. So basically, if it is that you're going to the US to raise funds, there are rules.
I know people talk about, you know, friends and family exemption. There is no friends and family exemption. There is less of a regulatory burden, depending on who you got to raise funds from, but there are compliance requirements. Regardless, once you're raising money, the compliance requirements. So, you need to be aware of that and make sure that you don't run afoul of the rules and tension unintentionally. I'm not saying that anyone is going to do anything deliberately, but just be aware that there are a lot of rules to pay attention to and transfer pricing, because chances are that you know, this is something that's frequently overlooked because you probably get a maintain some functions in Asia, maybe a tech team, your technology team is going to remain in Singapore or Vietnam, Cambodia, you know, wherever it is, you have your tech team.
They may remain there and you move certain functions to the US. But the point is then you have related parties, right? Because the entity in Singapore and Asia is providing some sort of shared service to the one in the US. You know, technology, whatever the case may be, the point is that once they intercompany transactions, you need to be conscious of transfer pricing. And so, transfer pricing is a discipline where you ensure that intercompany transactions are price in the right way, because of at least from a US point of view or whatever jurisdiction is the higher tax. The tax authority is going to be concerned that you're going to be shifting profits from the higher tax jurisdiction, which if you comparing the US to Singapore is going to be the US. You're going to be trying to book as much profit as possible in Singapore.
So, from the US perspective, they're going to want to see that whatever the intercompany transactions are, they're pricing the right way, that price in arms. So, you're not messing around with profit. And then there's the immigration issues. And again, this kind of ties back to the incorporation. If it is some of the founders or your key decision makers from Singapore, from Asia, I'm going to move to the US you would need to be incorporating with that in mind. So, we had, for example, I have a client who incorporates it in Delaware because everybody in corporates in Delaware, for whatever reason, but then, you know, the mechanics and the nuts and bolts of his operation tech company as well is going to be based in Miami.
He's going to be based in South Florida. So, what was the point of incorporating in Delaware and for him to get the visa, whether it's an E visa or L visa, or whatever, permission to work in the US, you need to have the incorporation set up, right? So, pay attention, get people on board as part of your advisory team who know what they're talking about. So please keep that in mind. So, in terms of this shameless plug, we provide that sort of turnkey solution. And that we're familiar with both Singapore and the US and we could provide all at least most of the necessary services.
Things like immigration, we work hand in glove with immigration attorneys in the US as well as tax lawyers from more complex structures. So, my contact details, I think for those who are on zoom, it's actually below. If you watching this on Facebook or LinkedIn or whatever, you can just contact any of us directly. So, I'm going to stop sharing now and get to what you guys came for. Right? So please feel free. I did get some questions, but if you have further questions, feel free to type it below.
And what I'll do now is I will jump to the questions that were previously submitted. Okay? All right. The choice of entity, like what entity do you incorporate? Right? You're going to incorporate a company, but what do you mean by a company? It can be an LLC, it can be an S Corp, it could be a C Corp. Some people use different structures, offshore, onshore, whatever that is, no one size fits all. And that's the thing. When you go to incorporation mill, they are just turning out, literally hundreds, if not thousands of incorporations a day or a week, or whatever, they are not necessarily looking to work with you to see what works in your best interest.
They just want to sell your product. And, I mean, they they're running a business, so nobody's criticizing them. That's just the reality of it. So, you need to sit with an advisor and we're called an S-corp mainly it's going to be an LLC or a C Corp, and S Corp does not allow foreign shareholders. So, there's going to be an LLC or an S or C Corp. As to what the differences in LLC is a limited liability company. A C Corp is a corporation that is governed by section C oof the tax code and some part of the tax code.
Essentially, again, this should be a really in-depth conversation that you're going to have with your advisor. But the LLC, if I'm going to draw a comparison to entity structures in Singapore, I would say it's close to an LLP Limited Liability Partnership in the sense that from a tax perspective, it's transparent. So, from a tax perspective, it's transparent. Now from a commercial perspective, it is a company. It is a limited liability company, but so what you have essentially is a hybrid entity. It is a hybrid entity.
The other alternative is a C Corp, a C Corp is what we would know in Singapore is a private limited. So, it is a properly, regular, private limited, an incorporated entity. Now, as to which one is better, it really depends on your circumstances. No one size fits all. What I can tell you is that most people would tend to go with a C Corp and I'm not advising you. All I'm saying is that most entrepreneurs who are moving to the US would go with a C Corp. A C Corp offers a high degree of formality, and as a result, the protection, because the entity that you form is a separate person from your separate legal person from the founders. And that veil of incorporation between those that have created the entity Fand the entity itself, it is the veil tends to be stronger.
A C Corp and investors, if you're looking to raise funds, investors tend to prefer a C Corp, but that doesn't mean that you should work. You should get a C Corp. For some people, it would be an LLC that's owned by US. A Singapore private limited, or LLC that's owned by BVI or a trust, it really, really depends. So, you get advice and you find the vehicle that works best for you and your circumstances. But as you are, no doubt going to be aware, the US is a very litigious society, a very litigious commercial environment. Lawsuits are just one of the tools of business of doing business. If you haven't been sued, that just means you haven't been in business long enough. I mean, I'm just being completely honest. So, I know it's the guy selling an incorporation for like 200 bucks or whatever, but if you can afford it, of course, you're going to probably want to spend more money, getting things done in not in a better way, but in a way, that's really tailored to your situation. So, you want to make sure the shareholders agreement may not be a boilerplate, but works for you, given that they may be foreign shareholders and that you want to bring in a US domestic shareholder, you know, you want to create documentation, or you want to create a structure that is aware of what your situation is and what your desired outcomes would be.
So, if it is, you're going to hire employees depending on what state you're going to be operating in. Because again, I said different States, different rules. You may want to get advice from not just people who can help you with payroll, but with employee contracts or where, if you're going to use independent contractors, attorneys, or legal advisors that are familiar with onboarding and managing independent contractors, because you just don't want any problems. And depending on what state you're operating in, sometimes the legal system may be biased in favor of employees. And in some jurisdictions in the US, it may be a favor towards employees. It really depends on the situation. It depends on the jurisdiction, but the point is you want to get advice and not just set up a cheap company, because there may be other implications to consider next one banking options.
Next question was banking options. Again, as I mentioned previously, one size does not fit all. So, some people they're doing the business model entails lots online transactions, and they happy to use some of the challenge of banks that integrate well with Stripe and PayPal and whatever else, a Worldpay or whatever. The payment platforms sometimes they want to work with a dedicated payment services provider. And we do introduce you to advisors. We can have that conversation with you because we work with clients who want to do that. Because as you know, the transaction fees from Stripe and PayPal and Square, they're not exactly cheap. You know, it could be as high as 5% per whatever. So, it really, sometimes it's worth considering all the options. And depending on your payment platform, depending on your, your business model, sometimes the challenger bank can do the job, but more times than not, you probably want to have a traditional bank account as well.
And in order to do that, you would need to be in the US of course, whereas with a challenger bank, if you can open those accounts remotely with a traditional bank, you would need boots on the ground, but don't worry. And I think we'll touch on that with one of the questions further down, we do work with US immigration attorneys who can help you file the correct paperwork, figure out cause the US visa system, like the tax system is quite complex, there are at least 130 visa categories. So how do you know which one works best for your particular situation, depending on what passport you carry, depending on where the parent company may be. So anyway, we'll talk about that later on.
Next, next question that was asked. Someone was saying, taxes are complicated compared to Singapore. Yes, they are. Can you talk a bit about direct and indirect taxes? Well, the direct again, but this in this space is kind of similar to Singapore. So, Singapore, you have your direct taxes, which will be your corporate taxes for your companies and your individual taxes for yourself as an employee or business owner. And then you have your indirect taxes, which will be a GST in the US it's the same similar for you have corporate taxes for you company. Assuming that it is a sequel, because remember we said the LLC is like a partnership in Singapore. So, it does not actually, it may file a return, but it doesn't pay tax. If you're using an LLC, the burden lies in the would fall with the owner or the members, as we say, the members of an LLC, because an LLC doesn't have shareholders and the LLC has members. So, the members, whether the members are corporate members or individual members, they have the burden for the LLC, the LLC for the C Corp. That's similar to private limited in Singapore so they will pay corporate tax on its own. And when there's a distribution of dividends or salary or whatever the case may be, the recipient may be subject to taxes. Now the indirect taxes and the indirect taxes tend to be unnecessarily complicated. You know, we call them sales and use taxes, and there are about 10,000 sales and use tax jurisdictions in the US and the thresholds are different from state to state, from jurisdiction to jurisdiction. The amount of the sales and use tax will vary. And the filing requirement will be as well.
Many of them allow for automated submissions some of them are manual. So, you actually have to do things the old-fashioned way. There are software providers and service providers that can help you. What we advise clients to do is, again, part of the process of setting up in the US you get a what we call a sale and use tax audit, where we work with. We have partners that do sales in new stock, those types of audits. So that can advise you of the potential sales and use tax exposure and ensure that you remain compliant and you have no surprises because I've seen it time and time again, we have a client that, when they rush, they set up a company and they started in the US and decided selling online. And they're doing pretty well, seven figures. And after the first year, so it's a pretty good stock, but they were unaware of the sales and use tax obligations. And when they sat with an advisor by that stage, they had been trading for one or two years, and they had a quite sizable sales and use tax obligation to settle. And then you have to talk about whether you try to go into amnesty and it becomes quite complex. And the penalties and interests could be aggressive as well. And we've taken clients through that process. Singapore and clients who did not know, they honestly didn't know that there were varying thresholds. They may Google and will Google say some guy in some chat groups said that the threshold is a hundred thousand dollars or 200 units. Generally speaking, but some States are $50,000, some States a hundred units, it really depends. Some may be lower; some may be higher. It really, really depends. So, it makes sense to speak with an advisor. Otherwise, the complications of trying to fix unintended mistakes can be painful, can be very, very painful. We've seen companies actually go out of business because they went, when they have to write checks to pay all of these back taxes and fines, they go bust. So, it's something to consider something to consider.
Next question. We found a really cheap US-based bookkeeper. Why should we pay more? And I guess that's the question. You're right because when you're starting a business, as a startup, you're entering a new market. It is tough because cash is King cashflow is really, really important. And you may need to balance conflicting demands. Do I spend the limited cash we have in marketing? And I think getting the business up and running, or do we spend that cash on the administrative side on making sure we get the, we don't go with the cheapest possible accountant or lawyer or whatever, we pay a bit more to make sure the foundation is right. I can't answer that for you as business owner, as an entrepreneur, what I can say is that you are probably expanding to the US or redomicile to the U S with a long-term plan in mind, you're playing the long game is not a short game, and you're building a house, building a house and you, you need to lay the right foundation. And if the foundation is weak, you're going to build a weak structure. If the foundation is rock solid, you're good.
So, circling back to this person's a comment slash question. You may, you know, it's yes, you get someone who's able to do your accounting and your tax on the cheap, but you need to weigh that. And you need to have that conversation. You walking into an environment that is completely unfamiliar to you. Do you trust your future in someone who's, you know, it's kind of like someone is offering you a deal on a cheap parachute? Do you pick the cheapest parachute on the shelf? Some people do some people don't because yes, there's really good cloud accounting software. There's QuickBooks, there's Xero, and they make it really easy. But at some point, the person that's preparing that those financials need to understand your business model. It's not just debits and credits or recording transactions. It needs to be done with a thorough knowledge of your business model, because some transactions are subject to interpretation. And at the beginning, yes, you may not have any profits so therefore you need to think about tax, right? Because tax thinking is a luxury for people who are actually making money. But at some point, in time, you will come into profit. If you're doing the right things and you're in it for the long game, and you would have problems if things were not done in the best way for your company at the beginning, I'm just throwing that out there. And when you begin to negotiate valuation, and you're going to onboard a third-party investor, they're going to have a look at your books and you may have a valuation in your mind. You know, there's always that divide between what you, as a founder, think the value of your company is and what the parties think it may be, but you are just making it really easy for third party investor to discount the value of your company. If your books aren't in order, because you just went with, you, took, you jumped off, you jumped out of the plane with the cheapest pasture that was on the shelf, right? So, I'd say don't put a cost. If you're looking for an accountant who is of course qualified, but is willing and able to spend time with you to understand your business and make sure that the financials represent your business in the best possible way. And don't create any issues that someone could manipulate and exploit when they find it and they're ready to invest, and they use it in their favor. So that's my answer. It's long winded, but I've seen it happen time and time again.
Next question, we’re startup and Cassius tight. I know. Yes, I know how that goes. We using online service providers who provide bullet templates for contracts and sec filings and stuff like that. So, I'm just of summarizing what they said. And again, just like with the accounting, it is hard to balance. There are lots. I mean, there are lots of great startup entities or companies or service providers within the startup ecosystem that do provide great value when it comes to your sec filings, when it comes to create drafting shareholder agreements, when it comes to drafting, you know employee contracts, contracts, and independent contractors, whatever it is you're looking for, there's an easy solution. You know just answer a few questions and then it spits out something that's supposed to work for you again, just like with the bookkeeping example. The previous person asked it's up to you, it's really, really up to you. You need to balance the what I know it's not hard. It's not easy. It is conflicting and it is difficult. Do I allocate the limited cash that I have to marketing and getting the business up and running or setting up the business in the right way? It's either way, the pros and cons to however you decide to wait it. But as you know, as tax professionals, as accountants working with attorneys, we've seen, we've seen the pain that comes with doing things on the cheap.
And, you don't take a boiler template for shareholder's agreement and a savvier investor. They able to exploit the, the gaps and the loopholes in it to get control of your company, to push you out, to give you trouble, you know, whatever the case may be. And if there are any gaps in the filings, yes, you went with a discounted service provider for any of the compliance work, whether it's with the sec or the internal revenue service or the state tax authorities in the US even though you use a professional advisor, you are ultimately responsible for everything.
You sign those documents. You're the responsible, there's a concept of responsible individual when you it's like for sales and use tax, whichever it is, there's a line when you registering who is the responsible individual. And even though you hired, and you paid someone whom you believe that who represented themselves to be a qualified professional, if they make mistakes, you are responsible. Not necessarily them, you are responsible. So just keep that in mind. And again, I'm not saying to go with a service provider that services a fortune 500 company, but I'm also cautioning against the guy who does I do everything fixed fee, $200. I give you a package, I'll give you a deal. So, you're probably looking for somebody in between. They're not working for Tesla, but they are not the cheapest provider as well. There's some way in between and someone that you can have a conversation with who can make time for you and make sure that you understand everything that you sign. Don't just sign things that are DocuSign or whatever. Any document is thrown in front of you. Someone who can sit with you and go through line by line. So, you understand whatever it is you're getting yourself into. And who's happy to answer your questions. So, I'm just throwing that out there.
Next question. There is no tax treaty between the U S and Singapore, would I be double taxed? Okay. I see where you're going with this. The Singapore, all things being equal, its territorial tax, right? So, you as a founder, you as an entrepreneur, you just being taxed on your Singapore source income. If it is a founder, as a CEO, as a chairman or whatever your title is, a key decision maker, you move, you shift your company, or you start up a holding company or an operating company, or whatever it is in the US and you move to the US you will be subject to taxes and your worldwide income.
Worldwide income, so whatever, like if you rented your condo in Singapore, that's going to be challenged by the US. If you sold your condo in Singapore, that's subject to capital gains tax in the US so you will be subject to tax on your worldwide income. You don't need to worry typically about double taxation, even though there's no tax treaty between Singapore and the US there's a tax treaty with the US and Indonesia, the US and Philippines, Australia and so on. But there's none with Singapore. No, with Malaysia, you don't need to worry about that because both the US and Singapore typically respect the concept of a foreign tax credit. So that money typically should not be taxed twice, because once you can show that you have paid taxes in the other jurisdiction. So, you know made money, you have an additional source of income from whatever else, your other companies that you're running in Singapore, and you collect that while in the US, once you show that you've already paid some taxes in Singapore on it, you'd only pay the difference with what the US is. Now, there are, you know, there are ways in which unfortunately you can be double taxed and it tends to occur at the state tax level.
So, because remember the federal government will tax you, but the state also taxes you, unless you're in one of the, let's say seven or so States that do not have an income tax like Florida and Nevada, Tennessee, et cetera, the States don't always recognize foreign tax credits. So yes, under some circumstances you may be double taxed. So, the point is that as part of your transition process, as part of your planning process, you probably want to undergo some sort of what we call pre-migration planning, where you sit with someone who understands Singapore tax, as well as US tax. And you consult with them. And you understand the tax implications of not just your business cause obviously business, but for you personally, as a, as an entrepreneur, as a business owner, as a, as an investor, because things that are tax free in Singapore example, capital gains and dividends tax rate in Singapore, that's going to be taxed in the US so you want to understand the implication from a tax perspective of your income subject to worldwide tax by the US. And that gives you an opportunity if you don't, if you see that a particular income stream, you may be subject to tax, and you're not comfortable with it. You can put some mitigation strategies in play before you enter the US so you can structure your holdings, maybe not to completely avoid taxes, but at least to minimize the tax burden. So, there is value in tax planning, pre-migration tax planning.
Next question, central travel is banned, how do we get into the US. Immigration attorneys, just like Singapore non-essential travelers is banned into Singapore, right? But if it, is you on an employment pass or whatever your case may be, you are legally applying to get into Singapore. You can make the application and Singapore will consider it, and you will maybe get permission to answer same with the US but whereas with Singapore, again, in Singapore, spoils US in terms of how efficiently run everything is. So, for the most part, you can navigate through the process of getting an employment pass and entering Singapore, or depending on the past, you could kind of navigate that on your own. With the US it's extremely difficult to do it on your own. Most people who operate at the level of all about typical clients, they definitely utilize qualified and experienced immigration attorneys is a must. So yes, things are closed, but we're seeing our clients being assisted in getting the right visa to answer all the time. So, the US is still open for business. That's the takeaway, the US is open for business, and we can introduce you to immigration attorneys. So that's the point
Next question what do we mean by transfer pricing? Transfer pricing is a concept actually exists in Singapore as well. It was introduced a few years ago. I think it's relatively new to Singapore. It's been in the US tax code for a long time. And when you look at the history of transfer pricing, it probably actually originated in the US before the jurisdictions picked it up. So, as I explained, previously, transfer pricing is a discipline that requires you to properly document all your related party transactions. You sit with your advisors and you work on what is the best structure for you. Maybe it entails leaving your Singapore private limited, and you may be set up a holding company. And that same holding company owns a subsidiary in the US. What I'm not giving you advice. Sometimes the structure involves creating more than one entity. That's what I'm saying. And these entities share services. So, one entity may be your technology team tends to be another entity may have your IP. That is your intellectual property. So, whatever your proprietary algorithm, your branding, copyright, whatever it is, your intellectual property sits in one entity. The point is that there would be transactions among all these related entities, and you need to make sure that everything is properly documented.
So, you have a policy document that describes in general, what are the related party transactions, maybe marketing is done centrally, technology's done centrally, whatever the case may be. It's all documented the, the functions they assess the risks assess. So basically, the team that helps you with the TP documentation needs to really get into the running of your company and be able to look for comparable and make sure that the price charged for intercompany transactions is indeed on-site. So, you create a policy document that says that it is going to be dancing. And every time there is an intercompany transaction, you ensure, and you document everything to make sure that it's provable, that it was arm’s length, because if you can create no end of problems for yourself, if it is perceived that you are attempting to manipulate profits by shifting from a higher task to low attached jurisdiction.
So, pay attention to that. You typically need to get a third-party team on board to do that. I've never really seen it done internally. So, we do it, others do it, make sure you get it done and okay. Let me see if there any other questions. Are there any other questions? Okay. Yes. I'm seeing one question. Okay. How are the charges in the US is there anything that we need to take note of? It really depends on what banking charges for what you know, I guess if it's a corporate account, you have some sort of minimum balance. And once if you don't maintain that minimum balance, there may be additional fees or whatever the case may be. I can't really speak because it is so diverse in terms of what people's banking needs are and the banks that they use to, to, to fulfill those needs. What I am aware of are the transaction fees. So, for those who are involved in online selling, whether it's a digital product or sometimes a physical product or digital products, and you using, you know, the normal platform using square, using Stripe use and PayPal, whatever, or, you know, we'll pay or whatever the fees vary a lot.
And those tend to be the pain points for tech companies in the US. The transaction fees, and with that in mind, we can introduce you to a third party, other payment providers, aside from the big guys with whom you meet. No guarantees, but with whom you may be able to negotiate lower transaction fees. But that also becomes complicated because they often ask, because remember everything we spoke about compliance and the concept of a responsible person, they sometimes demand that the responsible person in your company in terms of transactions is a US citizen or permanent resident, as opposed to someone on a work permit. So, there may be additional restrictions, but I think once you work with the right advisors, you should be able to negotiate as much as possible. Let's see if any other question.
Okay. So, I'm just looking on the other screens for questions.
All right. And I'm back on to the zoom. Now, anybody else has any questions? So, in short, I would advise that if it is, for whatever you reason you think that either redomiciling your company in the US or setting up a subsidiary or an affiliated company in the US is the right step for you. The next step is to obviously internally, you have to create your business plan. And once you have some sort of plan in mind, you sit with advisors who can advise you on the tax side and the compliance side, if you're going to be there to raise funds. And on the immigration side, if it is that key as a founder, you want to relocate to the US so that’s probably the sequence of steps you need to make. And it's helpful if the team that you're working with understands both the Singapore side, as well as the US side. So otherwise, you have to go back and forth between your Singapore advisors and the US advisors.
No further questions. Okay. Thank you very much. So please feel free to follow up for those of us in zoom, just have a look, I think Hannah, my colleague, she put our contact details below. Our website is HTJ.tax. That's H HTJ.tax short for taxation. And we have like over a thousand articles on international tax. We also put out tax videos everyday as well. So, we always keep those who are within our ecosystem, aware of the newest tax rules within which they can do things in the right way, but also in a smarter and efficient way. Feel free to reach out if you want a free complimentary consult, HTJ.tax.
Thank you for joining this evening. Have a good evening, and I will see you next time. Bye.
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