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Ask HN: Startup outside the US
11–20 of 28 posts
Re: Ask HN: Startup outside the US
#12You need to decide for yourself if the hassle in incorporating in the US is worth it and also if there are other reasons for doing so. Like you, I am based outside of the US. I'm currently in the UK and yet, I am incorporating in the US. The five reasons for this are :- 1) 99% of my customers are there. 2) 100% of my vendors are there. 3) Potential investors are there. 4) 99% of my financial transactions are in dolla…
Will HMRC even let you direct a US company from the UK?
Re: Ask HN: Startup outside the US
#13Apply first. You don't have a decision to make until you've been accepted.
I disagree. I think you should be sure to want it, if you apply. Otherwise it is half-hearted.
Re: Ask HN: Startup outside the US
#14You need to decide for yourself if the hassle in incorporating in the US is worth it and also if there are other reasons for doing so. Like you, I am based outside of the US. I'm currently in the UK and yet, I am incorporating in the US. The five reasons for this are :- 1) 99% of my customers are there. 2) 100% of my vendors are there. 3) Potential investors are there. 4) 99% of my financial transactions are in dolla…
Nice summary. As a German running a company in the UK, I'm also thinking about a US based corp using Atlas from Stripe. May I ask in which sector you're working, goods or services? How do you feel about the hassle that comes with an US based corp compared to the ease of a UK one?
> I'm also thinking about a US based corp using Atlas from Stripe.
I was thinking of Stripe as well, but unfortunately they don't support LLCs as yet. Which means I'll be doing all the leg-work myself.
I will be noting down all my steps and will one day blog about my whole startup experience.
That said, since stripe now works with US based companies. I may apply when they do roll-out LLC support so then I can get some of the benefits. That is of course, if they'll have me!
> May I ask in which sector you're working, goods or services?
I'm launching a SaaS very very soon. It's actually ready now, but I'm still not happy with certain aspects.
> How do you feel about the hassle that comes with an US based corp compared to the ease of a UK one?
I have held LTDs in the UK in the past. It was trivial to incorporate with a 3rd party service and then retain the services of an accountant to deal with HMRC.
I have this same view for the LLC. The only issue I have so far, is dealing with long distance calls. Some vendors are happy to talk on Skype which is great. But the majority always want you to call them.
In addition, I have dealt with lawyers, accountants, opened and closed businesses and bank accounts before, all in different countries, the US, UK and EU. I am not too worried about whatever the process will throw at me. My mindset is, if something happens. Just deal with it and move on. No point worrying about it.
Re: Ask HN: Startup outside the US
#15You need to decide for yourself if the hassle in incorporating in the US is worth it and also if there are other reasons for doing so. Like you, I am based outside of the US. I'm currently in the UK and yet, I am incorporating in the US. The five reasons for this are :- 1) 99% of my customers are there. 2) 100% of my vendors are there. 3) Potential investors are there. 4) 99% of my financial transactions are in dolla…
Will HMRC even let you direct a US company from the UK?
Yes. Why wouldn't they?
Re: Ask HN: Startup outside the US
#16You need to decide for yourself if the hassle in incorporating in the US is worth it and also if there are other reasons for doing so. Like you, I am based outside of the US. I'm currently in the UK and yet, I am incorporating in the US. The five reasons for this are :- 1) 99% of my customers are there. 2) 100% of my vendors are there. 3) Potential investors are there. 4) 99% of my financial transactions are in dolla…
You have taken the tax breaks for EIS and Entrepreneurs Relief into account?
Re: Ask HN: Startup outside the US
#17Earlier quoted context omitted.
Nice summary. As a German running a company in the UK, I'm also thinking about a US based corp using Atlas from Stripe. May I ask in which sector you're working, goods or services? How do you feel about the hassle that comes with an US based corp compared to the ease of a UK one?
> I'm also thinking about a US based corp using Atlas from Stripe. I was thinking of Stripe as well, but unfortunately they don't support LLCs as yet. Which means I'll be doing all the leg-work myself. I will be noting down all my steps and will one day blog about my whole startup experience. That said, since stripe now works with US based companies. I may apply when they do roll-out LLC support so then I can get som…
Thanks for the in-depth reply!
> That is of course, if they'll have me!
Go ahead and apply. You don't have to actually purchase the company, just because you applied. We already got accepted and can now go ahead, if we want to, at any point. Also, I don't think they are too picky. We got accepted within 2 business days.
> I have this same view for the LLC. The only issue I have so far, is dealing with long distance calls. Some vendors are happy to talk on Skype which is great. But the majority always want you to call them.
Yeah makes sense since most of your customers are US based. Good point, didn't think about that.
My first concerns were more towards dealing with lawyers, accountants and potential lawsuits as well as taxes in the US. Lawsuits are way more common their and taxes are quite complex due to federal/state/city laws, compared to the kindergarden-level flat tax in the UK... But yeah, I guess that's why people have accountants.
> My mindset is, if something happens. Just deal with it and move on. No point worrying about it.
That sounds quite british :) Good luck then! Do you have a blog already, so I can subscribe or something, to see the post once you release it?
Re: Ask HN: Startup outside the US
#18Related question: How do taxes work for companies which are incorporated in US and operate in a second country ?
Re: Ask HN: Startup outside the US
#19Apply first. You don't have a decision to make until you've been accepted.
I disagree. I think you should be sure to want it, if you apply. Otherwise it is half-hearted.
Your chances of getting an interview or acceptance are so slim, you have nothing to lose by applying and thinking through the application process could help clarify parts of your business.
Think of YC as a customer, as all investors are. You're selling them the investment.
Re: Ask HN: Startup outside the US
#20Related question: How do taxes work for companies which are incorporated in US and operate in a second country ?
Can you clarify the meaning of "operate?" Do you mean operate or is being managed?
If you mean "operate," then there isn't really much to add. If you are performing some sort of SaaS (like Netflix), the US company will pay tax on worldwide profits. The other jurisdiction may assess a withholding tax, but in practice it is difficult to collect it from consumers. If you have people selling things in another country and concluding contracts, you may have a permanent establishment in that other country and be required to file branch financial statements and pay tax thereon.
If you mean "managed from a second country," things get more complex. If the "mind and management" of the company is in another country, that country will probably take a position that the US company is subject to the local tax laws. For example, if you are a Canadian that owns a US company or corporation and you control it from Canada, then Canada will deem that company or corporation to be a tax resident and you must file a Canadian corporate tax return in addition to all your US filings. You will need to look at the US-Canada Tax Treaty carefully to see how this plays out. In particular, the tie-breaker rules and anti-avoidance rules.
I'm a tax practitioner. I shudder when I see how many people are opening US companies without looking at their home country rules. Before you consider opening a US company, ask yourself:
(1) What is my foreign affiliate disclosure requirements?
(2) Will my US company be liable for tax in my home country? Will my US company be a tax resident in my home country?
(3) What are the residency rules and tie-breakers under my country's tax treaty with the United States? (If you don't have a treaty, it should light up as a red flag.)
(4) Do I have a budget to pay for local tax advice and compliance, and US tax advice and compliance, each year?
Tax is not simple!