Fast answer
Start selling as an individual or existing local entity if your processor accepts you. Form a foreign company only when a specific requirement forces it — a processor that will not onboard you, a client who needs a local entity, or a tax position that becomes cheaper. Then open the bank account before you invoice anyone.
Decide in this order
- Can a processor accept you as you are today? If yes, stop and sell. Entity formation is not a prerequisite.
- Is there a concrete blocker? A payment method that refuses your country, a client contract that requires a foreign entity, or a banking restriction.
- If a blocker exists, choose a jurisdiction for that blocker — not for a tax story you read online.
- Open the company bank account or a business account at a fintech before you take the first payment.
- Register for tax where the obligation actually arises, and record the dates.
The three realistic jurisdictions
- Hong Kong — fast incorporation, territorial tax system, widely accepted by payment processors. Ongoing costs include an annual return and renewal. Banking requires a real explanation of your business.
- Singapore — strong reputation, higher setup and compliance cost, requires a local resident director in most structures.
- United States (Delaware, Wyoming, New Mexico) — cheap to form, but a US LLC creates US filing obligations and does not by itself give you a US bank account or visa.
Banking, honestly
Traditional banks ask more questions than fintechs and take longer. For a one-person online business, a business account with a reputable fintech attached to the company is usually the practical first step, with a traditional account added once there is a payment history to show. Do not accept an account you cannot explain the source of funds for.
Tax: know the trigger, not the whole code
You do not need to master international tax. You need to know three things: where your company is tax resident, where your customers are, and whether selling digital goods to them creates a registration obligation. In the EU and UK, digital sales to consumers commonly trigger VAT registration from the first sale; in the US, state-level nexus rules apply.
Using a merchant of record moves that obligation to them for consumer digital sales. That is often the single most valuable simplification available to a solo seller, and it is worth pricing before forming anything.
Keep the paper trail from day one
Invoice numbering, dates, currency, and the entity name on every document. Bookkeeping is trivial when it starts clean and expensive when reconstructed two years later from a bank statement.
Checklist for this step
- A processor accepts you as you are today, or a specific blocker is documented
- Jurisdiction chosen for a real reason, not a forum post
- Company bank or business fintech account open before first invoice
- Tax residency position written down in one paragraph
- Sales-tax or VAT obligation for digital goods checked
- Merchant-of-record option priced against the admin cost
- Invoice template with numbering, currency and legal entity name
Common mistakes
- Forming a company before confirming a processor will accept it. Now you pay annual fees for nothing.
- Assuming a US LLC gives you a US bank account. It does not, on its own.
- Selling digital goods into the EU without checking VAT thresholds.
- Mixing personal and business transactions from the first sale. Every later reconciliation gets harder.
C — Cheap to start, costly to maintain
Every jurisdiction has recurring costs: annual returns, registered agents, accounting. Budget the second and third year, not just the formation fee, before choosing one.
Keep the order.
Every step assumes the one before it is finished. Skipping ahead is how sites end up rebuilt twice.