Live data from Hacker News

Ask HN: Is it ok to start a Delaware Corp solely to accept payments?

news.ycombinator.com

11–14 of 14 posts

Re: Ask HN: Is it ok to start a Delaware Corp solely to accept payments?

#11
post #5

Let's say you successfully create a Delaware corporation. It exists. It has a US tax ID number. It has a bank account. It has a merchant account. All of the stuff you want to do business. In other words, stipulate complete success in achieving your business objective. Here is what the tax part of your plan will look like: 1. Money comes into your corporation via the merchant account. 2. After paying expenses, you hav…

That's a great reply. Thank you. Maybe you could save comments like these and put them on taxgeek.com :-). I'm not trying to evade taxes. I'm European, and I pay taxes here. Still, even in Europe getting a Merchant Account is difficult. I'm simply looking at this because the cost (money/time) of starting and maintaining a Delaware Company might be less than the cost of setting up a Merchant Account over here. Without…

> Am I really "draining taxable income" if in the other scenario there wouldn't be any US taxable income either??

If you're going to get involved in the complexities of a country's tax system, never make the mistake of attempting to apply rational logic to it. That's a quick way to get into trouble.

Re: Ask HN: Is it ok to start a Delaware Corp solely to accept payments?

#12
Instead of creating a c-corp in US and debating how much profit to leave in US just create a US LLC owned by your home country corp. Thus the profit just passes to your home country corp and you will pay tax on it in your home country.

Also with this setup you can pay all your US expenses (hosting, advertisement etc) out of your US LLC. I am not a lawyer or CPA so discuss this suggestion with a experienced professional

Re: Ask HN: Is it ok to start a Delaware Corp solely to accept payments?

#13
post #12

Instead of creating a c-corp in US and debating how much profit to leave in US just create a US LLC owned by your home country corp. Thus the profit just passes to your home country corp and you will pay tax on it in your home country. Also with this setup you can pay all your US expenses (hosting, advertisement etc) out of your US LLC. I am not a lawyer or CPA so discuss this suggestion with a experienced profession…

I think you're referring to the same setup as rprasad was talking about in his comment (http://news.ycombinator.com/item?id=3055493).

(If I'm correct) When a US company pays dividend to it's non US parent company, the US charges a withholding tax of 30%. This can be less if there's a tax treaty between the two countries.

Re: Ask HN: Is it ok to start a Delaware Corp solely to accept payments?

#14
Interesting sidenote: Avoid Delaware, and go with Nevada. No personal or corporate income taxes. You would need an employee working in the state (check rules), but this could save you your entire tax burden - of course, Federal taxes would still apply...
Post reply on HN