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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?

#191

Post by krn »

lukeqsee wrote: post #99
mishaker wrote: post #57

Earlier quoted context omitted.

I was e-resident too but had to become resident in Estonia. Cause if you are abroad and distribute yourself dividend (as a sole entrepreneur) your host country would consider your Estonian company local and thus it constitutes a permanent establishment and that becomes extremely complicated

Of course--but this is the case for almost all jurisdictions of record vs jurisdictions of taxation. Few countries want to allow a company to operate 100% in their borders without extracting some degree of taxation. (In fact, this is basic OECD taxation doctrine.) My situation is complex, but, generally, the advantages of Estonian registration are found in drastically simplified and lower-cost business registration a…

Just to clarify: since you are only an e-resident of Estonia, are all your three Estonian companies paying the corporate income tax (CIT) in your personal country of residence?

Since Switzerland is currently the only country in Europe without CFC rules[1], it seems that an Estonian company can only be managed from Estonia or Switzerland without being considered as local for tax purposes in another jurisdiction.

[1] https://taxfoundation.org/controlled-foreign-corporation-cfc...

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

#192

Post by renewiltord »

SkyAndSand wrote: post #187
renewiltord wrote: post #143

Earlier quoted context omitted.

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.

Awesome, thanks. May I ask why you went with the C Corp and not an LLC? Probably to make it easier for new investors?

Actually, I just checked our Stripe Atlas. Originally intended the C corp so we could bring people in but we were instead advised to just start a new LLC each time if we wanted and that we could have one LLC just be the owner of the other.

So I should correct this. We did end up with an LLC but the C corp would have worked just fine apparently.

Thanks for bringing that up. I'd forgotten.

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

#193

Post by ztrww »

gumby wrote: post #169
SkyAndSand wrote: post #159

Earlier quoted context omitted.

I understand that. But why would a US company need a NL bank account?

Because it had a subsidiary in NL, perhaps because it had employees to pay, or otherwise did business there.

> subsidiary

which would be a local company registered in the Netherlands?

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

#194

Post by lukeqsee »

krn wrote: post #191
lukeqsee wrote: post #99

Earlier quoted context omitted.

Of course--but this is the case for almost all jurisdictions of record vs jurisdictions of taxation. Few countries want to allow a company to operate 100% in their borders without extracting some degree of taxation. (In fact, this is basic OECD taxation doctrine.) My situation is complex, but, generally, the advantages of Estonian registration are found in drastically simplified and lower-cost business registration a…

Just to clarify: since you are only an e-resident of Estonia, are all your three Estonian companies paying the corporate income tax (CIT) in your personal country of residence? Since Switzerland is currently the only country in Europe without CFC rules[1], it seems that an Estonian company can only be managed from Estonia or Switzerland without being considered as local for tax purposes in another jurisdiction. [1] h…

From my last post:

> My situation is complex

This means my situation pretty much does not apply to anyone else, and the tax residency question is very complex in my case, as well. I won't bore you with details. :)

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

#195

Post by krn »

lukeqsee wrote: post #194
krn wrote: post #191

Earlier quoted context omitted.

Just to clarify: since you are only an e-resident of Estonia, are all your three Estonian companies paying the corporate income tax (CIT) in your personal country of residence? Since Switzerland is currently the only country in Europe without CFC rules[1], it seems that an Estonian company can only be managed from Estonia or Switzerland without being considered as local for tax purposes in another jurisdiction. [1] h…

From my last post: > My situation is complex This means my situation pretty much does not apply to anyone else, and the tax residency question is very complex in my case, as well. I won't bore you with details. :)

Sure. But since you have a lot of experience with the Estonian e-residency, maybe you know any real life examples where managing an Estonian company without personally being an Estonian tax resident made sense?

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

#196

Post by AlexITC »

iqkznnft wrote: post #135

Since we're on the subject... Can anyone just incorporate a company in the United States? Even if they don't have permit to work? Separate question, can they be employed by the company they incorporated, remotely, and use the company to bill American customers?

Having queried an US accountant, you should be able to create a US company without being there, you mostly require an ITIN and fill paperwork, you can hire an accountant to do that.

On the other hand, you won't be able to get a bank account unless you travel to the US, I'm not sure if alternatives like Mercury could get you a bank account without being at the US.

At last, you can't be employed by your company unless you have a work permit.

I have even saw companies that promise to open you a US company + bank account + handle taxes for a monthly fee.

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

#197

Post by lukeqsee »

krn wrote: post #195
lukeqsee wrote: post #194

Earlier quoted context omitted.

From my last post: > My situation is complex This means my situation pretty much does not apply to anyone else, and the tax residency question is very complex in my case, as well. I won't bore you with details. :)

Sure. But since you have a lot of experience with the Estonian e-residency, maybe you know any real life examples where managing an Estonian company without personally being an Estonian tax resident made sense?

Yes, hundreds. :)

Here's a few examples:

In Germany, it reduces the overhead of owning a company dramatically (the overhead of a German GmbH is quite a bit more than just taxes, including mandatory registrations, etc.).

In Switzerland, it reduces necessary share capital from 25'000CHF to 2,500EUR (which can be deferred).

In the US, it probably doesn't make sense unless your situation is very special.

As a digital nomad, it gives you a clear business home while traveling the world (and running everything online is essential).

Estonian accounting and business management is all electronic, so you can essentially run your business 99% in Estonia, do yearly tax reports in your resident, all while reducing the day-to-day complexity of running your business significantly. (No more paper or faxing!)

For non-EU residents, an Estonian entity gives them a clear legal path to marketing and selling in the EU with proper VAT, etc. reporting.

Every one I know has had slightly different reasons while Estonia made sense for them. I'm also purposefully not addressing the intangibles of registering a business in a well-functioning, well-regulated, forward-looking jurisdiction, which is a large component for many of my friends. (We care about Estonia, like its ideals, and want to see it succeed on a global scale.)

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

#198

Post by glenngillen »

SkyAndSand wrote: post #130
glenngillen wrote: post #107

Earlier quoted context omitted.

Wow you’re getting some bad takes here. Having a phone number does not make you a US Person. Having a bank account there does not make you a US Person. I can only assume people are confusing this with the domiciled test that can exist in other tax jurisdictions. It’s mostly the same criteria as the usual tax resident status (so all citizens + those with work visas + if you’re in the country for 183 days). HSBC had th…

Well the question is - will owning a share in a US entity make you a “US Person”? My initial assumption that seems to be confirmed by HSBC and the ATO is “no”.

It will not. The entity itself however is a “US Entity”.

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

#199

Post by SkyAndSand »

iqkznnft wrote: post #135

Since we're on the subject... Can anyone just incorporate a company in the United States? Even if they don't have permit to work? Separate question, can they be employed by the company they incorporated, remotely, and use the company to bill American customers?

Speaking from experience - yes you can create a LLC without being a US citizen or green card holder. You also can get bank accounts with Wise and Mercury for your company without traveling to the US.

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

#200

Post by markdown »

TedDoesntTalk wrote: post #147
markdown wrote: post #115

Earlier quoted context omitted.

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 liabi…

Hey thanks. That's very helpful.
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