According to the law, PayPal cannot prevent a Pakistani citizen from obtaining a legal entity in another country and owning a PayPal business account through that entity. It’s a simple process.
However, there are some challenges, like using the IP address of the country where the legal entity is based instead of using a Pakistani IP. Some individuals also encounter difficulties with PayPal’s performance team due to having a Pakistani passport. Despite these challenges, 80%–90% of people successfully use this method without facing significant issues.
Setting Up an SDN BHD
Creating a legal entity, like an SDN BHD, in a country such as Singapore or Sri Lanka allows Pakistanis to travel to Malaysia more easily. Once the SDN BHD bank account is operational, individuals can set up a PayPal account under this legal entity.
US LLC Method
A preferred method involves establishing a US LLC. While creating a bank account in the US requires physical presence, having a friend act as the office manager facilitates the process. With an LLC, obtaining an Individual Taxpayer Identification Number (ITIN) enables legal ownership of the PayPal account under US taxation laws.
Legal Setup of PayPal Account: Leveraging ITIN/EIN in the US
Legally establishing a PayPal account using an Individual Taxpayer Identification Number (ITIN) or Employer Identification Number (EIN) in the US, under the address linked to your Limited Liability Company (LLC), is a viable option. Possessing a US ITIN can contribute to building a credit score, as you are technically considered a US resident for taxation purposes. In adherence to the law, ownership of this PayPal account is legitimate under your ITIN or EIN associated with your LLC.
Applicability to UK LTD Company and Estonian E-Residency
A similar process is applicable for those opting for a UK LTD Company or pursuing Estonian E-Residency. Utilizing an Estonian residence card to establish an Estonian corporation is feasible. However, a visit to Estonia is necessary for setting up the bank account. Establishing an Estonian corporation’s bank account can be challenging, requiring a well-prepared business plan demonstrating business exports or ties with Estonia. Notably, details about online ventures might not be disclosed when opting for an Estonian corporation.
Two Ways to Proceed
- Physical Presence: Ability to travel to the chosen country, form a 100% foreign-owned legal entity, and set up a bank account as the owner.
- Proxy Presence: If unable to travel, find a friend to act as the office secretary of the legal entity and initiate the bank account setup on behalf of the corporation.
Legal Ownership Assurance
Once a legal entity and bank account are established, the PayPal account is 100% legally owned. Even if PayPal requests identification, providing a Pakistani passport is generally accepted. For those with a US LLC and bank account, obtaining an ITIN later enhances the account’s legitimacy.
Accessing from Pakistan
To access PayPal from Pakistan, using a virtual private server (VPS) is recommended. While some people use VPNs successfully, VPS proves to be a more prudent choice for sustained access without the risk of suspension.