blonde poker forum

Hi

Lets say i open a clothes shop with 3 other founders who were German, Finnish and Norwegian. Our shop makes $1m in the first year.

How would we pay tax as a company. We would be an online company with shared roles between the four shareholders. Where would the company be located and who would we have to pay tax to? Or would we all 4 individually pay income tax to our countries?

I am fairly sure you need to start with the tax laws in Hungary for how your dividends are taxed.  Where do you declare your income from your coaching? 

I guess you have a bit more freedom with where the company is based.  Leave that to somebody else. 

so no matter what the company is, if you live in england you will always pay local income tax right?

Depends on local tax rules.  If you spend most of your tax year in Hungary I guess that would be where to start. 

Corporation tax will be where the company is based.  But even that may depend on Hungarian tax rules.

Starting point is where the company is incorporated for where the company is subject to corporation tax but in most countries they also seek to tax a company based on where it has its central place of management and control. As for dividends or funds extracted from a company, the individual is usually taxed in the country where they are tax resident.

this

you can incorporate the company wherever you want really (i, you'll just have to maintain the ongoing fee cost of that). if you set it up in lux for example you-d need in-house directors where you just pay a fee to a fund adminstrator company

I work in the online clothing world, I would not worry to much about making profit in the first year or two..

Online clothing is a very tough market, take a look at this weeks dragon's den it has Idleman.com trying to raise 200k.

http://www.bbc.co.uk/iplayer/episode/b063hr2s/dragons-den-series-13-episode-2 (http://www.bbc.co.uk/iplayer/episode/b063hr2s/dragons-den-series-13-episode-2)

IF you need any other info drop me a pm.

I know this wall fall on stony ground, but please don't do this Patrick. Unless you are quite exceptional, it would be quicker to set fire to money. Seriously.

Unrelated (sort of) but for those interested, read this book, it's a real rip-snorter, telling the tale of 3 young Swedish lads who thought they had it cracked with online clothing sales.

boo.com went Online in September 1999, & by May 2000 it was in receivership. The burn rate (the rate at which they spent money) was $750,000 per day, & by May 2000, not a cent of the original $135 million was left.  Stunning read.

Please don't do it Patrick, you are not ready yet, buy some Gilts & forget about them.


(http://ecx.images-amazon.com/images/I/412G085YPBL._SX321_BO1,204,203,200_.jpg)

I would guess that's a better & pleasingly understated way of saying the same thing. ;)

PS - Hope it works out. It's mind-blowing how much up front money is necessary in such a business. For those that succeed, the rewards are mountainous, for those that fail, the hole is very deep indeed. Patrick is a young man with the world at his feet, there are so many better ways to invest money if it is burning a hole in his pocket.

Hello Mr Kendall

Hope you enjoyed your Vegas travels.

I have added that book to my to read list, but could you give me a little summary?
Did they just go all out to be huge from the start and invested huge amounts?

I cant comprehend how it could be so hard, I know someone who does this.
Cheap online website that you update yourself.
Clothes imported from Lithuania.
Limited initial stock, reinvest profits in stock, nice steady growth.

You obviously need the right niche and you wont be making $1m in year 1!

Just for a bit of balance, putting up boo.com as a typical online retailer is the equivalent as putting up bluescouse as an example of a typical online poker player. 

I am not exaggerating in any way by saying this, in fact bluescouse would be the more restrained of the two.

Will it still make sense if I don't read the preface and foreword until the end?

Hello Mr Hopkin, & best regards to the unfortunate Mrs Bopkin.

Vegas was wonderful, thank you, though I'm still as flat as a pancake with the biggest adrenelin hangover ever.

A summary of the book?

A bunch of keen, enthusiastic Swedish lads decide to start an Online Clothing company. They were as green as grass & had no experience whatsoever of business.

They raise some Venture capital & off they go.

The site software was a bit of a nightmare, & the IT people never kept to their scheduled dates. (Fancy that.....).

So they raised some more money. It rinse repeat. Raise more, spend it, raise more.

For context, this was during the so-called dotcom boom. 

The kids had, literally, no idea about business. They were jetting back & forth to New York on Concorde (first class) 3 times per week, too.

And the IT people could not get the site "just so", & the Clothing Suppliers were, well, it's not an easy trade to deal with.   

By the time the site was ready to go live, the winter clothing range was out of date. Write that $30 mill off then. Ditto the Spring range, ditto the Summer range.

The oddity was that the kids had no real world concept of value, (they were geeky back bedroom computer game lads, never seen real life), or acting responsibly with other peoples money. 

Have to say, it is was absolutely cracking read, one of the most memorable books I have ever read. Please go buy it, you won't regret it, I promise.

I did know someone who worked at boo.com.  He probably still maintains it was the best job ever.  As far as I remember, and it was some time ago, they ran everything from some very expensive Central London real estate.  So if you bought a pair of jeans, they didn't have a warehouse in the Midlands near the motorways, they'd send it out from Soho (from memory)

They were massively overstaffed, so my friend would maybe send out 3 packages a day.   The rest of the time they had a ball.  They got taken to expensive parties, are expensive food and got paid well for what should have been minimum wage stuff.

If you do all this, you'd go bust even if you were running Apple.

Never read the book.

You are probably right, Doobs, but I'm just so fearful of Patrick doing the lot.

If he does not know the answer to those very very basic tax questions he asked, then in my opinion (not digging or dissing, I promise) then I don't think he should be getting involved.

Glad you know the boohoo story though, it's just astonishing, one of the great business stories out there.

I do hope Patrick takes my comments in the spirit intended. I did say the boo hoo tale was "sort of" related.

He also spoke recently of investing in a bar. That'd be the 2nd worst way to burn his money, imo. Stick to winning all the money in online poker for now Patrick.

Yup.

In fact, for reasons I don't understand, it has a Foreword AND a Prologue. Neither are needed.

Agree with all that - except the last sentence. It's too good NOT to read.

I guess it sums up the dotcom excess.

Fabulous tale, & true.

Shame the book is not called boo der

Next book it is then!

Honestly, Stu, you'll love it, you won't be able to put it down.

Their naivety was jaw-dropping - but not as jaw-dropping as the investors I suppose. Very much a story of the 90's, excess & greed.

I wonder of anyone ever totted up how much money was burned during the dotcom boom? Having said that, it created employment, & people spending money meant that somewhere, somehow, people were making money - exactly & precisely the same amount as was lost.

 :D

Have to agree with Doobs in comparing Dot.com start-ups 15 years ago being anything like today's market.
I doubt you could get anything close to the investment totals of then even if you wanted to.

I will just add that I knew the FD of an independent high street retailer that went bust a few years ago before online got as big as it has. 

I suspect you'll have some of the issues.  The main problem with been an independent is that you sell someone else's clothes for much the same price they do.  Hence your margin for paying salaries/rent etc is always smaller than if that someone else set up a shop down the road.  I expect this is exacerbated by the internet.  I can Google around for the price of a boss t shirt and if you sell the same one for £5 more you have no sale.  Then you have to compete with those who use the parasitic voucher code websites etc.  I suspect you have to make your own stuff or have a very low cost base.  4 young poker guys happy to blow $100 on a slab of meat doesn't appear to be low cost on the surface.

And before I wasn't saying that you should never read the book, I was saying I have never read the book.  Realised just now it can be read two different ways. 

Ahh, gotcha. "Never read the book" can indeed be interpreted two different ways, my bad, apologies. "Read" as in "reed" or "read" as in "red". The English language, a thing of beauty. 

So now you can read it. You won't regret it, it's black comedy at its best.

How many have heard of Zalando?

https://en.wikipedia.org/wiki/Zalando (https://en.wikipedia.org/wiki/Zalando)

http://www.retaildetail.eu/en/eu-m-tail/item/17299-zalando-seeks-at-least-20-growth-in-2015 (http://www.retaildetail.eu/en/eu-m-tail/item/17299-zalando-seeks-at-least-20-growth-in-2015)

I never read prologues or forewords because they often spoil the book by revealing to many details.

It doesn't matter in this case though.

hi, im not actually intending to sell clothes :D Just used that as the business.

Get an accountant you business fish, and pay your taxes

If you lived in Italy for 6 years and never spent more than a week in the UK who would you feel compelled to pay taxes to?

defo get an accountant! But you almost certainly need to pay tax in Hungary, not UK.