Ask HN: Is forming a company in UK a good option for a non-US resident

I'm wondering if it's a good idea to register in UK or maybe Estonia for a small business selling a software product licenses and SaaS subscriptions online. No employees or any physical presence in the EU .

I'm mostly choosing between UK and the US. I've read a lot about US LLC formation and it certainly has it's strengths, but I fear US tax and overall legal compliance issues. And the lawyers are super expensive. And travelling there is expensive. I'm also not going to seek outside investment which would otherwise be a major benefit of a US company.

From what I see on the web though it looks much cheaper and easier to form a UK limited company. Except for getting a UK bank account, which I could instead do in Latvia or Estonia. But this would limit online payment processing options although I'm sure there should still be some.

Have someone been in a similar position and went for UK incorporation? What has been your experience? There's really lack of information regarding this topic on the web, compared to US-based incorporation.

particularly interesting is practical experience with things like:

- what UK taxes do you owe as a non-EU resident member of a UK company on salary (besides the obvious 20% of company income) - can you deduct your salary from company's taxable income? - are there any legal complications from a small software business perspective or is everything simple and transparent - downsides; why would one rather choose a US business entity (or some other jurisdiction) - am I overlooking some important considerations?

I know I should talk to a UK lawyer regarding legal and tax compliance, and I will, but I'd very much appreciate to hear any thoughts from this community first so that I have at least some clue.

So I would say the main purpose of this whole thing is payment processing in a sane jurisdiction.

It costs ~£15 to start a limited company in England and Wales (a separate jurisdiction to Scotland and Northern Ireland). So long as you keep accurate records and file your annual accounts correctly, that's all there is. An accountant would normally do the filing for you. For a small business this can often be done for £500-£1000. If you do your own bookkeeping and keep accurate records, that will keep costs down.

As your business will be domiciled in the UK, it will be subject to the UK's tax regime. But if you're outside the UK, your salary from the business shouldn't be subject to UK taxation (do check that, though - double-taxation isn't something I know much about).

TL;DR - Find an accountant in the UK who'll be willing to give you a free consultation (most of them). You'll probably find one on ukbusinessforums.co.uk (it's where I found mine).