Do I Need to Open a Company for Etsy? Should I Open It in the USA, UK, Germany, France, Turkey?
There are 4 ways to open a shop and sell on Etsy:
Establishing a company in the USA
Establishing a company in Turkey
Establishing a company outside of the USA and Turkey
Opening a store without establishing a company or obtaining an exemption
First of all, you can open multiple stores on Etsy under one person’s name, independent of the company. However, Etsy does not want you to sell the same products in different stores belonging to the same person. You can sell different product groups in different stores opened under the same name. If you have a jewelry store, you can open a T-shirt store.
Establishing a Company in the USA
We mostly proceed by opening companies in the USA for our own accounts. Why?
Increased Orders: The most important reason is that when we open an Etsy account with a US company, our US orders are much higher. Your sales change according to location. While US orders are very high in the account we opened with our US company, UK orders can be higher in the account opened with a UK company. Etsy’s highest traffic currently is: 56.2% USA, 7.85% UK, 4.68% Canada, 4.29% Germany, and 2.96% France.
Lower Fees: Etsy makes 4-10% more fees on accounts opened from Turkey. When we proceed with a US company, we can earn 4-10% more profit from each sale. When you make sales of $10,000 - $12,000, you already cover the company formation cost of approximately $800.
Sales Success: In our account opened with a US company in August, we made $60,000 in sales in December. If we had opened it from Turkey, we would have lost $4,800.
Platform Perspective: Since Etsy is a US company, its perspective on a Turkish company is different from its perspective on a US company.
Tax Simplicity: we declare taxes once a year in the USA. We don’t have to deal with monthly filings and incur extra costs like in Turkey.
Future Benefits: We know that having an active company will be beneficial if there is a visa or relocation situation to the USA in the future.
Establishing a Company in Turkey
We cannot open stores with the Limited (Ltd.) and Joint Stock (A.Ş.) companies we open in Turkey. Unfortunately, they get suspended. Etsy has issues regarding this matter.
You can open an account by establishing a sole proprietorship. When opening an account, you proceed by selecting “individual.”
The biggest problem when opening an account with a sole proprietorship from Turkey is that Etsy’s fees are 4-10% higher compared to the USA.
Establishing a Company Outside the USA or Turkey
Of course, you can sell by establishing companies in other countries as well.
You can decide by examining how much Etsy fees in the countries where you plan to establish a company.
As mentioned, your sales can change according to location. You can decide the country where you will establish your company based on the traffic percentages (USA 56.2%, UK 7.85%, 4.68% Canada, 4.29% Germany, and 2.96% France etc.).
Selling Without Establishing a Company or Obtaining an Exemption
Etsy does not ask how you will pay your taxes when you open your account. The issue of paying taxes is a matter between you and your State.
When you start making sales, money will start coming into your bank account. After a while, the State may question this, and you may receive a penalty.
Therefore, I strictly do not recommend selling without opening a company.
When an individual account is opened without a company, Etsy applies an additional 20% VAT deduction on all fees.
Also, when sales increase, Etsy eventually asks you to enter a tax number (this happened to one of our sellers in recent weeks).
How Should We Proceed? (General Advice)
You can decide by considering two issues:
Budget: If you have the budget to establish a company in the USA, this is the most logical way to proceed. However, if you don’t have an $800 budget, I recommend at least establishing a sole proprietorship.
Location: If you are living in these countries such as UK, Canada, Germany, France or any other European countries, it is more logical to proceed with a company in your country.
To summarize: If you make $10,000 in sales on Etsy and proceed with a Turkey location, it deducts about $2,000. If you proceed with a USA location, it deducts about $1,000 - $1,500. Therefore, as long as your sales remain below $10,000, proceeding from Turkey is logical; when they go above $10,000, proceeding from the USA becomes more logical.
Is there an accountant Rexven has an agreement with?
If you want to establish a company in the USA, we have an accountant in the USA with whom we have been working for a long time and who performs company formation safely. You can work with our accountant. (To work with our accountant, you can write to Ms. Burcu: https://rexven.com/v2/tr/iletisim)
Things to be Prepared Before Opening an Account:
A Gmail account to be used for the Etsy account must be ready, and the Chrome profile of this Gmail account must be open.
A buyer account will be opened, and cookies will be collected for a few days.
The store name will be determined.
ID or passport will be ready as identity verification will be done via phone.
We use Mercury as a bank account for USA companies.
Bank account information must be ready.
The Google Authenticator application must be downloaded. There can be problems with codes sent to phone numbers, so we use Google.
The credit card from which Etsy will receive payments must be ready. It must be in the account holder’s name and open for internet shopping and international transactions.
If it is to be opened with a company, the formation documents must be ready. For a USA company, ‘certificate of formation’ and ‘ein’ documents must be ready.
General Answers to the Most Frequently Asked Questions:
Q: Can I open my store from Turkey first and then, when sales increase, open a USA company and convert the account? Answer: No, Etsy does not allow us to change the store country and bank account location. Therefore, you cannot make this change.
Q: I opened a store from Turkey; can I open a second store with my USA company? Answer: Yes, provided that you do not sell the products you sell in your first account, you can open a store from scratch with your USA company in another category.
Q: Can I manage these accounts belonging to the same person from a single computer? Answer: Yes, you can manage these accounts with different email addresses from the same computer.
Q: Should I use my own computer or rent a VPS (Virtual Private Server)? Answer: If an account has not been opened in someone else’s name on your computer before, or if an account was not opened in your own name and suspended, using your own computer is the most logical way. If an account was opened and suspended on your computer before, you can open your account by renting a VPS.
Q: Can I manage my account from multiple computers? Answer: We recommend managing it from a single computer. For example, let’s say you want to access the account from your office computer. Leave your main computer at home with the Etsy account open and manage it by accessing it remotely with applications like Chrome Remote Desktop, Anydesk, or Teamviewer.
Q: How should I manage the Wi-Fi? Should my computer connect to only one internet? Answer: Normally, Etsy does not say why it closes an account. Therefore, we pay attention to everything. We connect the computer where we open our Etsy account to a fixed internet. You can use Superbox internet for this. When you want to move that computer, you can use it anywhere with Superbox. We do not enter the internet in public internet usage areas. If you are not using Superbox, you can at least enter with your phone’s internet.
Q: I want to buy designs or mockups from Etsy, but my buyer account gets suspended. What should I do? Answer: When you open your Etsy buyer account, do not try to buy something immediately; browse the site for a few days. Then make the purchase. You can open a buyer account with a different email from another computer (not the one where you will open the seller account) and make the purchase. Or you can do your tasks with the buyer account from the Etsy buyer mobile application without using a computer at all. Just make sure never to use your own credit card for this.
Q: Can I use a VPN? Answer: We do not recommend using a VPN. It is perceived as a suspicious situation by Etsy.
To sell on Etsy with the Rexven supply system, click and choose a time: Special Appointment Link