Here’s the plan
- Have an independent corporation that can accept payments from clients, hold capital, and pay expenses (myself as a contractor and other freelancers)
- Isolate it from “me” as a Canadian taxpayer (Income shouldn’t be directly associated to my name)
- Invoice clients from the business entity
- Hold/Invest the majority until a later date (pay myself 5%)
- Pay business taxes properly
- Go unnoticed
So far it looks like the way to do this is
- Create a corporation
- Name some I trust as the director
- Create an international bank account in the name of the business
- Set up a payment processor to deposit in to the bank account
What I’ve done so far
- Hire a freelancer to create a corporation (100GBP)
- This is a UK corporation. Chosen because it was easy to find someone to incorporate in the UK.
- The director is chosen and named
- The freelancer also offered to do the required paperwork for the business for a monthly fee (20GBP). I personally like this as this means the freelancer is incentivized to make sure the setup and the paperwork are done right, so I agreed.
- Create a transfer wise account for the business ($0)
- This was also tied to the director’s name, and they had to provide Canadian passport as ID verification
- Set up Freshbooks (Free for 3 or less clients, small CC fee) ($0)
- Set up WePay (This was the wrong choice. WePay is out.) ($0)
- Accept a credit card payment in to Freshbooks (success: $10)
- Connect WePay to Transferwise (FAIL)
- Have the Director sign up for Stripe (success)
- Create a new Gmail account for the business
- Connect Stripe to Transferwise using the Borderless account with a USD balance (success: waiting on payment deposit)
- As Transferwise and Stripe both require 2FA, I created a Twilio number that forwards the 2FA codes to the gmail account ($5/mo for a server to precess the request, plus 4-5 hours wrangling with the Gmail API. Note: Could probably be done server less for pennies, but I had the server anyway)
Where I’m stuck
Stripe can be connected to Transferwise, but the business name has to match exactly, and Stripe only supports business names less than 22 characters. (Edit: Trying this anyway, as it seems to work once you’ve Signed up. I cannot submit the Stripe application until Transferwise gives me the account numbers, but the form here does allow long business names)
Update 7 days after the edit: Transferwise still hasn’t finished their “up to 5 days” processing as they asked directly for more info (Do we have a website/online presence and which country are we physically located in when conducting business (which they also asked for a Canadian address when we replied Canada))
We did have to email them as noted below in Tips, I suspect they would not have made any progress without us emailing them
Update a full 12 days from first signing up for Transferwise: They approved the account, and we now have a USD and GBP balances that have “local bank details” (aka: they can be connected to Stripe).
I fed those details in to Stripe, and Stripe instantly approved approved us. I’ve made a test payment of $5 to see if it deposits successfully in to Transferwise. All signs point to yes, with a date of Monday the 19th (10 days from payment).
Tips for anyone following in my footsteps
- Find a proxy that you trust to act as the director, and who’s name the accounts will be under. At a certain $$ threshold, this would probably be a lawyer.
- Set aside at least a month for this process, and stay on top of it (We had to email Transferwise a half-dozen times to keep their verification on-track)
- (Based on how it’s been done by other people) write up a resignation letter for the director, leave the date off, and have them sign it. Do the same for release of shares or a document detailing the transfer of ownership of the company.
- Connect Freshbooks to Stripe so that invoices can be generated and payments received (Note: the Stripe dashboard actually currently supports making customers, items, products, and invoices. All without using the API. Freshbooks may not be needed at all)
- Community input is greatly appreciated