QUESTION
can a e commerce company from Hong Kong to do business in the US without paperwork?
Asked on Feb 19th, 2013 on Business Law - California
More details to this question:
A new network marketing company that is based in Hong Kong has been expanding in the US over the passed few months. Representatives of the company says that because it is an e-commerce company and there are no physical business address in the US, they don't have to have any paperwork to do business in the US. The bulk of the income is generated by one penny auction site.The income, which can be very significant, is paid in one of 3 ways. 1) direct deposit from a bank in Hong Kong 2) check paid by a bank in Hong Kong 3) Cash directly from the representatives in the US. The income is not reported by the company to the IRS and not SSN is provided by the members. Here are my questions. 1) Can this kind of business be conducted in the US without paperwork to do business here 2) Can I be legally liable or be inprisoned for participating in this company 3) What are the tax consequences?
1 ANSWER
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Ask a lawyer is for analysis, not legal advice you can rely on, and your question is not general but very specific and complex.
If you have no physical presence in the US, that you don't have to register as a foreign corporation in any of those states. As to #2, no. As to #3, way too complex for a public forum, but the standard is "effectively connected with a US trade or business."
Answered on Feb 19th, 2013 at 4:09 PM