Travelling the world while running a small business.

January 30, 2013 4:32 PM

I would like to travel the world while writing my own software (for profit). Ideally, I'd like to stay in each place for a couple of months, not just a few days or weeks. Where can I learn about the legal specifics of doing this?

Specifically, I'm interested in whether this qualifies as "work" for something like a tourist visa, as well as any tax complexities. (I'm a citizen of the United States.) Are there any books or references that I can consult to figure this out? Thanks!

posted by anonymous to Work & Money (7 answers total)

"Specifically, I'm interested in whether this qualifies as "work" for something like a tourist visa"
I would use the military "don't ask, don't tell" doctrine concerning the "work visa requirement" and travel as a tourist.
posted by yoyo_nyc at 5:11 PM on January 30, 2013 [4 favorites]

As long as the buyers of the software are purchasing it from 'the home office' a server back home, you're probably cool. If you're hawking it locally other local competitors, local tax agents, will certainly take issue.
posted by sammyo at 5:39 PM on January 30, 2013

Tourist visa should be fine unless you are actually making money locally.
posted by mattoxic at 6:05 PM on January 30, 2013 [1 favorite]

There's no reason you can't be working in the U.S. from overseas. The best thing to do (in my small-business-owner opinion) is to form an LLC in the U.S. and employ yourself at it. Then do your travel for personal reasons. So for instance you can stay in the EU for 90 days, and then you can leave for a day if you need to and return, and likewise take advantage of other country's tourist visas.

Getting involved with taxation and reported income in even just ONE foreign country is a nightmare. (I mean, the U.S. is bad enough, right?) You do NOT want first-hand experience with things like French taxes.
posted by RJ Reynolds at 6:28 AM on January 31, 2013

I do this. You should do it, too!

I no longer live in the US. I work online with multiple clients and sell digital products, and I travel a lot. The vast majority of my cients pay me with credit cards; a few send a check to my EarthClassMail address in the US and I then have to pay a fee for them to deposit it in my US account.

Before I left, I incorporated in the US as a one-person LLC. It cost $87. I'm not an employee of my business; I'm literally the LLC, which is simpler from a tax perspective until I make big piles of money, at which point I'd be better off as my own employee. Ask an accountant which form of incorporation would be best for you.

If you're planning to have global clients, once you're incorporated, get a business bank account at a major US bank that easily accepts transfers from abroad. I have an account in a credit union that doesn't directly accept the ACH transfers that European clients want to make, and it results in a big hassle for everyone. The bank should also have a good online banking interface, because with any luck you'll never set foot in it again.

I continue using my US debit and credit cards. I just have to call the credit union occasionally to reassure them that I'll be using the cards in whatever odd location so they don't lock them down.

When I go somewhere new, I go on a tourist visa, because I'm not going to be living there, I'm not going to be seeking residency, and I'm not taking any work from a local.

I pay taxes to the US because as a US citizen I have no alternative -- you pay the US every year no matter whether you never set foot in the country again. However, because I don't go back for more than 30 days in a year, I qualify for the foreign earned income exemption, which means I don't pay income tax on the first 90-something thousand dollars; I only pay the usual self-employment tax which, if I remember right, is about 12%. I use TurboTax online just like I did when I was in the US, and I pay the tax with a bank transfer.

A good source of info on the tax implications is this site.

I would recommend incorporating in a tax-free state and establishing residency there before you take off to explore the world. You'll find details about that on the site linked above.

90 days is common for a tourist visa. I've learned to never assume that it will be easy to get into the country just because I have a US passport--sometimes it's harder.

For example, in Latin America, sometimes US citizens have to jump through bureaucratic hoops similar to the hoops that the US imposes on people from Latin America. My friends from Mexico or Venezuela often have it easier. But so far the hoop-jumping has been worth it. For example, after some hassle and fees, I now have multiple-entry visas for Brazil, Paraguay, and Argentina that are valid for the next 8-10 years. Each visit can be for 90 days.

So now I can just land at the airport in, say, Buenos Aires, and head off to a short-term apartment with a good internet connection for the next 2-3 months.

My home base is currently Mexico, where I'm on a long-term visa that's given to people who can prove income from abroad. This means that every year I have to show some bank statements to the visa people to get my visa renewed, and after 4 years, I'll be a permanent resident and stop going through that hassle. I also avoid having any Mexican clients to make very clear that I don't have local income or anything even remotely resembling a local employer.

Mexico is a good home base for me because I have friends here and my rent is cheap. That way I can go somewhere else for a couple of months while keeping my Mexican rental and not hurt much financially. Also, my rental home is in an attractive city, so if I want to get house sitters or subletters, it's not hard.

For tons of additional information, search for terms like "digital nomad" and "location independent professional."

Finally, if you do pick a foreign home base, pay close attention to the long-term visa requirements. Until recently my Mexican visa limited the amount of time I could spend outside the country (though it was still generous at something like 5 months a year).

If you like Asia, consider Malaysia for a home base. The last time I checked, they were actively seeking expats and making it easy to establish residency. The time zone is definitely a challenge, however, if most of your online meetings are with people in the US.

You've got a ton of tools to make this all easy. Skype will be your best friend. For a tiny amount of money, it gives me a US phone number that rings my computer wherever I am, and I have unlimited calls to the US, where most of my clients are.

Get your ducks in a row, and then go!!! Do it do it do it!!!
posted by ceiba at 8:46 AM on January 31, 2013 [7 favorites]

A few more thoughts:

- When choosing your hotel/short-term apartment, look very closely at reviews on TripAdvisor to see what the internet connection *really* is like. For me, Europe and Australia have been especially bad. Most European hotels that promised in-room wifi haven't had it, and if the signal worked at all it was in the cold lobby next to the fish tank. Australia was equally grim, and on the advice of an Australian I decamped to Thailand because the internet was faster and more available. Of course, the food and culture were amazing, too, and I didn't want to leave.

- This lifestyle is best for people who don't need long-term romance. I know online of a few couples who work and travel together but they seem to be the minority.
posted by ceiba at 9:56 AM on January 31, 2013

Oh, and don't forget about house sitting! Check out MindMyHouse and Trusted Housesitters.

OK, shutting up and working now...
posted by ceiba at 10:02 AM on January 31, 2013