Q: I am looking to create a company that facilitates peer-to-peer payments with the use of credit and debit cards.
For this I have created an app:
If user is going to send money using the app, they input their credit card, STRIPE charges the credit card and the money goes to my business bank account in the US. When this happens, the app shows a balance in the user’s APP account.
When a user wants to take money out of the APP and into his own bank account, he clicks on “transfer money”. Our company gets a notification, we transfer the money from the business bank account, into the users bank account (minus fee of 5%) Their Balance in the APP goes down to 0
The company I am creating is an LLC in the state of Delaware. The bank account is going to be in the US. but the people allowed to use the app are going to be in El Salvador, Central America.
Do you know what taxes and or regulations we would be subject to?
I am sure we will have to pay income tax. Will we have to pay some other kind of tax on the fee we make?
A: What you have described is a financial services company that operates exactly like a bank. Translation: Before you spend your money developing your "new" banking business you need to know that you are required to obtain a bank charter or some other official authorization from the state you are operating from and from the several federal banking authorities that regulate the financial services industry long before you can lawfully open or operate your "new" banking business.
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