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How to Receive Payments in Dollars in Latin America Without Losing Money

How to Receive Payments in Dollars in Latin America Without Losing Money

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Two out of every three people in Latin America received payments in dollars from foreign companies in the last year. Whether you work as a content creator on platforms like YouTube and OnlyFans, or offer freelance services on sites like Upwork and Fiverr, receiving payments in a strong currency like the dollar makes a significant difference in your income. However, traditional platforms and methods often involve high fees, unfavorable exchange rates, and tax complications, which can significantly reduce your net earnings.

In this blog, we will explain how you can optimize your income by creating a company in the United States and why this option is superior to local alternatives. We will analyze the most used platforms by Latin Americans to receive payments in dollars, the problems associated with these platforms, and how creating a company in the United States can offer effective solutions. Additionally, we will discuss the fiscal and financial benefits of operating through an LLC or a CORP in the United States, comparing them with traditional options.

Popular Platforms to Receive Payments in Dollars

In Latin America, many people use various platforms to receive payments in dollars. Here are some of the most popular:

  • PayPal: Is one of the most well-known and widely used platforms worldwide. It allows users to receive payments in dollars and convert them to local currency. However, PayPal charges a fee for each transaction, and the currency conversion rate can be unfavorable.
  • Payoneer: Offers a debit card that facilitates access to funds in dollars. It is popular among freelancers and content creators because it allows receiving payments from platforms like Upwork, Fiverr, and Amazon. However, Payoneer also charges fees for withdrawals and currency conversions.
  • Wise (formerly TransferWise): Wise is an option for international transfers with lower fees compared to traditional banks. Despite this, there is still a fee for each transfer and currency conversion.
  • Skrill: Skrill is another platform that allows sending and receiving money globally. It is known for its lower fees compared to PayPal but still faces issues with currency conversion and additional costs.

Problems with Traditional Payment Platforms

While these platforms are useful, they present several drawbacks:

  • High Fees: Transaction and currency conversion fees can significantly reduce your income.
  • Withdrawal Limitations: Some platforms impose limits on the amount of money you can withdraw in a single transaction.
  • Waiting Times: Transfers can take several days to process.
  • Risk of Account Freezing: Accounts can be frozen for various reasons, leaving your funds temporarily inaccessible.

Creating a Company in the United States: The Ideal Solution

Creating a company in the United States, whether an LLC or a Corporation (CORP), offers numerous advantages for optimizing the receipt of payments in dollars. Here are the key benefits:

Lower Fees

By creating a company in the United States, you can open a commercial bank account in dollars. This eliminates currency conversion fees and reduces fees for international transactions.

Access to Advanced Financial Services

With a company in the United States, you can access advanced financial services that are not available to individuals. This includes commercial bank accounts with better conditions and corporate credit cards.

Asset Protection

An LLC or CORP offers personal liability protection, separating your personal assets from the business assets. This protects your finances in case of legal disputes or business problems.

Tax Optimization

Companies in the United States can take advantage of a wide range of tax deductions and planning strategies that are not available to individuals. This can significantly reduce your tax burden.

Credibility and Professionalism

Operating under a commercial entity in the United States adds credibility to your business. This can attract more clients and partners, improving your growth opportunities.

Ease of Expansion

Having a company in the United States facilitates the expansion of your operations globally. You can establish offices in other countries and access international markets more easily.

Steps to Create a Company in the United States

Creating a company in the United States is a relatively straightforward process and can be managed entirely online. Here are the main steps:

  1. Choose the Type of Entity: Decide whether you want to form an LLC or a Corporation. Both have advantages, but the LLC is generally more flexible and less burdensome in terms of administrative requirements.
  2. Select the State: Some states, like Delaware, Florida, and Wyoming, are popular for business formation due to their tax benefits and ease of administration.
  3. Register the Company: Register your company in the selected state. This involves filing the Articles of Organization (for an LLC) or the Articles of Incorporation (for a Corporation) with the relevant Secretary of State.
  4. Obtain the EIN: Apply for an Employer Identification Number (EIN) from the IRS. The EIN is necessary to open a commercial bank account and for tax purposes.
  5. Open a Bank Account: Open a commercial bank account in dollars at a U.S. bank. This will allow you to receive payments in dollars without conversion fees and with lower transaction fees.
  6. Comply with Legal Obligations: Ensure compliance with all legal and tax obligations, including filing annual reports and paying the corresponding taxes.

For content creators and freelancers in Latin America, receiving payments in dollars efficiently and profitably is crucial. While traditional payment platforms are useful, creating a company in the United States offers numerous benefits that can optimize your income and simplify financial management. From lower fees to better asset protection and tax optimization, an LLC or CORP in the United States is an investment worth considering to maximize your success in the global market.

At Prodezk, we offer personalized service at every step of the way, ensuring a hassle-free experience and a successful registration for your business in the U.S.

David Suarez
Gerente de Marketing

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