[trevelyan]

My company is BVI incorporated with a merchant account at HSBC in Hong Kong. My accountant in HK took care of the work. If you want her details just email me (contact in profile). As far as the payment side of things go, just thinking about it makes me feel unclean and I can't honestly recommend anyone. You can find a bunch of overseas credit card processors by Googling around, but you'll start getting offers at around 5% per transaction plus setup fees.

FWIW, this isn't tax avoidance advice - I'm personally incorporated abroad as I'm not American and can't open a business in the United States. If you need credit card processing incorporating a US business is probably the easiest solution. Otherwise, spend the extra $400 it will cost to incorporate in Hong Kong. The extra money is basically the cost for the accounting firm of running a virtual office and doing the perfunctory end-of-year audit. And you'll be able to setup Paypal directly using your corporate address and bank account. The only downside is you will need to pay taxes on SALES to Hong Kong residents. And you should figure out your local tax issues depending on where you live and work.

For what it's worth, I live and work in Asia and am in HK maybe 2-3 times a year and think your concerns aren't an issue. At least not for the next forty or so years.