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Ask HN: What is the best jurisdiction for internationally distributed teams?

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Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#141

Post by SkyAndSand »

renewiltord wrote: post #61

My friends and I have a seed-investment fund that we needed to be low overhead since we're all running companies. The Delaware process was fairly low-overhead. Some things needed to be notarized and it was a pretty easy process to get a virtual mailbox and everything (notarize.com was in the loop and they're neat!) Sorry it isn't directly against your constraints but we are foreigners in the US so I thought I'd menti…

So basically you are a group of non US citizens living in the US and wanted to have a shared entity to do investments? Well I guess then a Delaware C Corp is the logical solution? Did you use Stripe Atlas to set it up?

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#142

Post by moneywoes »

Dracophoenix wrote: post #117
moneywoes wrote: post #106

Earlier quoted context omitted.

What if you're located outside of the US but a US citizen?

Then you're in for a treat: Look up FATCA. If you have intellectual property involved in low-tax jurisdictions, you'll also want to look up GILTI.

Wow I already file and pay US taxes despite living there so was familiar with FATCa but dam might have to go Wyoming

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#143

Post by renewiltord »

SkyAndSand wrote: post #141
renewiltord wrote: post #61

My friends and I have a seed-investment fund that we needed to be low overhead since we're all running companies. The Delaware process was fairly low-overhead. Some things needed to be notarized and it was a pretty easy process to get a virtual mailbox and everything (notarize.com was in the loop and they're neat!) Sorry it isn't directly against your constraints but we are foreigners in the US so I thought I'd menti…

So basically you are a group of non US citizens living in the US and wanted to have a shared entity to do investments? Well I guess then a Delaware C Corp is the logical solution? Did you use Stripe Atlas to set it up?

Yes, right on the money. Though there's a slight natural difference for us to accommodate later participants. Yeah, we used Stripe Atlas, though none of the startups we run are through that. Overall, quite painless to be honest.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#144

Post by rr808 »

Why do you need a company? You need for contracts between the company and customers, company and employees, company and investors. Lots of people here recommend USA, I'd guess that is unnecessarily expensive. I'd think UK, Ireland, Luxemburg, Netherlands is simpler. It depends a lot on where your customers, employees, investors are.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#146

Post by jpgvm »

digianarchist wrote: post #73
jpgvm wrote: post #23

If you want VCs then it's always the US and should always be a Delaware corp. For non-VC funded companies HK is great, allows for tax minimization, minimal headaches, access to international banks and potential access to Chinese market if that is important for your business.

It’s virtual impossible to operate a HK or Singapore LTD these days as a “US person”.

Fair. I'm not a US person so I don't run into these issues. I still have to submit appropriate docs for FACTA etc because I do business with US companies.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#147

Post by TedDoesntTalk »

markdown wrote: post #115
TedDoesntTalk wrote: post #110

Earlier quoted context omitted.

The annual filing fees and documents required by Delaware is arcane. Things like “annual meeting of the shareholders” for a single-person S-corp.

Are you saying that Wyoming doesn't have those requirements?

Not if you mark your corporation as a “close” corporation (limited to 35 employees). The entity type does not matter (C, S, LLC).

“Abbreviated governance - shareholders may agree in writing to treat the corporation as a partnership, operate without a board of directors, dispense with annual meetings, and make a shareholder agreement.

Advantages

• Limited liability - the law says shareholders don’t have personal liability even though they relax corporate formalities in operations.

• Ease of operation - operates without pomp and circumstance required in regular corporations where hundreds of shareholders must receive information and vote.

• Cost of operation - relaxed corporate governance means lower legal, accounting and administrative fees for lower total costs of operation.

• Deadlock prevention - provides access to court when shareholders are deadlocked and harm could befall the corporation through lack of action.

• Buy-out provisions - shareholders may buy out a deceased shareholder’s interest according to shareholder agreements”

https://sos.wyo.gov/Forms/Publications/ChoiceIsYours.pdf

Many of the disadvantages listed are no different than for other corporate entities.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#148

Post by tluyben2 »

SkyAndSand wrote: post #36
FooBarWidget wrote: post #20

One thing to note if, as a Dutch person (and possibly even if you're another European), you incorporate in the US: Many Dutch financial institutions hate people who have the "US person" status. If you own a US-incorporated company then I believe you will gain that status. Banks, lenders, stock brokers, etc will either refuse to do business with you, or will give you a lot of paperwork headache and/or charge you more…

I am indeed another European and I do know about the issues with being a "US person". Many banks and brokers will simply immediately close your existing account or not allow you to open one. However, are you sure that simply by owning a US company you become a US person? Because according to my understanding if you don't live in the US (and don't spend more than 4 months / year there) you wouldn't actually be tax res…

My banks had me sign that my income is not from US. So owning a company in the US that I invoice or that pays dividends or something would not land well.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#149

Post by tluyben2 »

SkyAndSand wrote: post #129
yayr wrote: post #69

Be careful regarding taxes and "Betriebsstätten". If you are living in Germany and your company management is mainly operating in Germany you are liable still for local taxes ("Hinzurechnungsbesteuerung"). There are also special rules depending on how much of the company stock you own. Also you may have to register a "Gewerbe" in certain cases if you are doing business in Germany (e.g. selling something) from a forei…

Yes, that is a good point which applies to a lot of high-tax countries. If you are a single company founder and run a company in jurisdiction B from country A then country A will usually have provisions that the company will be resident in A. The question that I am wondering about is more like - you have four founders with 25% each who live in four different countries. Where is the company resident in that situation?

I have had this issue in NL and ES; both tax offices accepted that the the decision making was not in respectively NL or ES because most of the decision making (directors and shares) were not in either country.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#150

Post by cascom »

SkyAndSand wrote: post #131
cascom wrote: post #124

(Not a lawyer etc.) If you didn’t have a US founder I think you’d have more options, but since you do, just embrace the US - it’s will also be the easiest from a fundraising standpoint, and one of the cheaper options. I actually think the US gives you the most choices from a vendor standpoint, and is the cheapest (or one of the cheapest from an administrative standpoint). Regardless, definitely do it in a jurisdictio…

That is good advice. What would you do in case there wasn’t a US founder?

Short version - do it where or near where the bulk of your 1) customers 2) investors 3) leadership team are likely to be located, that also is not an administrative hassle. Stay out of continental Europe and tax havens that you’re never going to step foot in.

From a practical standpoint all small companies are out of compliance with tons of laws, they just fly below the radar, and do their best (not from a desire to be non-compliant, but that the laws are impossible to comply with without armies of accountants and attorneys) So do the best you can and move on with your life. You’re going to have the same employment problems with your German employee regardless of whether his employer is in the Isle of Man or Australia, so just suck it up and hire a an accounting firm to do the personal tax returns for the team and focus on your business.

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