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- How can I deal with the tax issues of setting up an international venture?Today
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I want to start a web-based business that would provide for services which physically take place in multiple US and foreign cities–basically an agency (not an escort service, in case your mind went straight to the gutter). Is there a way to go about setting up the corporation at the beginning of this venture that will help me keep the most money when tax time comes?
I plan to eventually operate in 6-10 countries—where can I get the most straightforward information on the advantages and drawbacks of incorporation off-shore (say Caribbean somewhere), in the US, or in other countries. What are the obligations of a web-based business to other governments regarding revenue earned on services performed in foreign countries if the payment takes place online but the service takes place on their soil? Do I need an accountant and lawyer in each country, or can I pay the employees as freelancers via the web and let them sort it out with their home country? Any advice on this general themes would be appreciated. I think I have a great idea, but set-up is daunting!
The Harvard MBA says:
I’m glad you’re not starting an escort service. I’m afraid that prostitution is largely a luxury good, so it’s a bad time to get into that business!
I am not an accountant or tax attorney, so take all my advice with a grain of salt. Nonetheless, I do have some specific advice and general principles.
First, the specific advice: Incorporating offshore
- What industries provide the greatest earning potential?December 11 2008
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Let’s assume it’s money I’m after. In your experience, what industries provide the greatest earning potential for salaried employees. Is it Wall street (or private equity) or Fortune 50? Can you shed some light on the comparative attributes of such a climb, such as how many years it would take to get there and how hard one might have to work (in terms of work hours), etc.
The Harvard MBA says:
I love your directness. It’s that kind of attitude that will help make you rich!
While the bloom is certainly off the rose when it comes to finance these days, the fact is that Wall Street is still the surest path to wealth. Barring that, management consulting is also a good choice. Entrepreneurship brings up the rear, at least if you look at median compensation (Larry and Sergey make up for a lot of failed founders!).
Classically, if you go to a top business school and go into finance, 10 and 10 is a good rule of thumb. With hard work, it’s reasonable to expect to make at least $10 million over that time period. You will have to pay a price–you’ll be expected to work at least 70 hours per week, and to get the right folks’ attention, 100 hours per week is a better figure.
Remember, however, that not all finance jobs are created equal, and that economic conditions do impact which jobs provide the fattest bonus checks. When credit
- I want to make $500-600K/year without much effort. Am I barking up the wrong tree?December 5 2008
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I have an MD, JD & currently going after my LLM. I’m so sick of studying, but I keep trying to reach for the next best thing such that I will be able to make tons of money passively (~$500k - $600k/yr) w/o much physical labor like seeing clients or patients. Am I barking up the wrong tree or should I just keep my nose to the grindstone?
The Harvard MBA says:
There is a very easy way to make $500-600K per year in risk-free passive income. You just need $21 million in capital to invest in inflation-index Treasury bonds.
Sadly, for all the “easy money” we hear about, gettin rich is generally hard work. Investment bankers work insane hours and spend years clawing their way up. Entrepreneurs work even longer hours and take on insane risks. And for every millionaire entertainer or athlete, there are millions of aspiring stars who collect a meager paycheck while pursuing a nearly unattainable dream.
You’re obviously very capable (an MD, a JD, and an LLM on the way…not even I have that many degrees). If it’s money you’re after, wait a year or two, and make your way to Wall Street. I suspect they’ll be having a hard time recruiting. Work hard, and long-term success is practically guaranteed…just make sure you save your bonus checks.
If money isn’t the mai
- Is a Harvard MBA doable with a 2-year-old baby?November 23 2008
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“Is a Harvard MBA doable with a 2-year-old baby? Let’s assume there is someone to help out full-time–the question is, will I be able to spend a decent amount of quality time with the baby?”
The Harvard MBA says:
Yes, you can definitely manage HBS with a 2-year-old baby, but you will have to make tradeoffs.
Every HBS student has to allocate their time amongst a variety of activities (class time is mandatory, so there is no variability there):
- Studying
- Socializing
- Attending events
- Searching for a job
All of these activities take time, and all of them could probably consume your entire schedule if you let them. If you want to spend 4-6 hours of quality time with your baby, that’s 4-6 hours you won’t be able to spend somewhere else.
There are certainly folks who spend 4-6 hours a day on hanging out in restaurants and pubs yet still manage to get a lot out of their time at HBS, so there’s no reason you can’t do the same with your baby.
But there is a cost–that’s 4-6 hours per day you can’t spend building your personal network, learning from guest speakers, or starting a business. As long as you are willing to pay that price, I don’t see any reason you can’t juggle the roles of parent and student.
As a side note, one of my classmates actually *gave birth* between the first and second semesters of our first year, and she managed to make it through the progr
- How do you like the gall of your fellow alums who have driven this economy into the ground with their greed?November 19 2008
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“How do you like the gall of your fellow alums who have driven this economy into the ground with their greed? How about Rick Wagoner riding in on his corporate jet while his company goes bankrupt! How about Valleywag’s study that Harvard MBAs are the most toxic investment on Wall Street?
Where are the ethics in the Harvard School of Business and its students?”
The Harvard MBA says:
You forgot to mention the Harvard MBA who occupies the White House, who oversaw the whole mess. It may be centuries before the American people elect another Harvard MBA to the presidency.
There’s no way for Harvard MBAs to duck their individual responsibility. All the Wall Street executives who failed to rein in their use of easy credit, all the hedge fund managers who tempted fate with outlandishly extravagant parties, and all the venture capitalists who backed companies with no chance of success other than selling to a greater fool–all of them have to shoulder some part of the blame.
But there’s plenty of blame to go around. No one forced people to borrow too much money, spend too much money, and ignore the writing on the wall that even a blind man could see.
(I’ll pause for a minute to gloat…I did see the writing on the wall, and starting in the summer of 2007, I moved aggressively into cash and fixed-return investments. Ah, the joys of capital preservation!)
Harvard MBAs, because they hold so much power in this coun