Why would a Taiwanese company use "1099 contractors"? That's a US tax thing
Ask HN: Best country to run a boostrapped startup from? (After Section 174)
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Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#22The UK is pretty good - quick and easy to set up a company or you can be a 'sole trader' which basically means you have simplified accounting but you don't have any limited liability if someone sues you etc
Also, an overlooked benefit - we have public healthcare so you don't have to worry about keeping a job in order to get health insurance. It's kinda overlooked point but it's weird that America has this system which incentivises you to have a job in case you get ill.
Also, everything is in English. I personally woulnd't want to file my accounts somewhere that I need to hire someone to translate the bank letters/contracts etc.
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#23I cannot answer for Taiwan, but if you're interested in an EU-based company registration from abroad, I recommend Estonia. The tax system is extremely straightforward: a company pays tax for its employee's wages (so, no tax for contractors, for example.) Flat rates, very easy to understand. In addition it's a very IT-based country; not relevant if you're not personally resident but worth being aware. In my experience…
The problem with offshore Estonian companies is banking - no Estonian bank will touch you, and few real banks (not emoney) will deal with you. Even Wise is no longer an option. Registering an entity is easy, using it is hard.
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#24I cannot answer for Taiwan, but if you're interested in an EU-based company registration from abroad, I recommend Estonia. The tax system is extremely straightforward: a company pays tax for its employee's wages (so, no tax for contractors, for example.) Flat rates, very easy to understand. In addition it's a very IT-based country; not relevant if you're not personally resident but worth being aware. In my experience…
The problem with offshore Estonian companies is banking - no Estonian bank will touch you, and few real banks (not emoney) will deal with you. Even Wise is no longer an option. Registering an entity is easy, using it is hard.
Why is Wise no longer an option?
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#25Earlier quoted context omitted.
The problem with offshore Estonian companies is banking - no Estonian bank will touch you, and few real banks (not emoney) will deal with you. Even Wise is no longer an option. Registering an entity is easy, using it is hard.
Why is Wise no longer an option?
Three months ago Wise stopped accepting new business clients from the EU (and, mostly, the UK).
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#26I run a business in HK, and generally it’s incredibly easy. Easy to set up, accounting is easy, ongoing fees are fairly low. So far I haven’t encountered any issue. But I’m well aware of the political issues being registered in HK might bring, and some (especially US) businesses might be wary of doing business.
And there's no jobs in HK. And no real tech. I haven't found anything here in a year. Looking to leave in the coming months.
There’s quite a few jobs in finance. But in terms of startup, or non corporate jobs, there’s very little.
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#27I think Puerto Rico stands a lot to gain from these changes.
Residents and businesses here file taxes with PR's Hacienda, not the IRS, therefore Section 174 doesn’t affect PR as far as I know. On top of that, PR already has several tax breaks and incentives that may tip the scales even more for some.
It will be a very interesting year though as the head of Hacienda just resigned, so it’s anyone’s guess as to how we’ll end up.
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#28The UK is pretty good - quick and easy to set up a company or you can be a 'sole trader' which basically means you have simplified accounting but you don't have any limited liability if someone sues you etc Also, an overlooked benefit - we have public healthcare so you don't have to worry about keeping a job in order to get health insurance. It's kinda overlooked point but it's weird that America has this system whic…
If you're a UK company (it's doable but) it can be a pain holding your bank account in dollars (which you'd want to do if your main customers are in the US and if you're paying your employees in dollars). Last I checked, Stripe wouldn't allow you to accept US dollars into a UK-based bank-account that holds US dollars. Maybe this has changed in the last few years.
As of April-ish 2023 there are now very strict UK rules on contractors as well. They now must be hardline treated like contractors and can not be treated like employees with special contracts, e.g., no bonuses, no perks, no company supplied equipment, etc. Too many UK companies were abusing contractor employees in order to pay low wages and skirts benefits requirements whilst simultaneously treating them like full employees.
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#29I think Puerto Rico stands a lot to gain from these changes. Residents and businesses here file taxes with PR's Hacienda, not the IRS, therefore Section 174 doesn’t affect PR as far as I know. On top of that, PR already has several tax breaks and incentives that may tip the scales even more for some. It will be a very interesting year though as the head of Hacienda just resigned, so it’s anyone’s guess as to how we’l…
Actually PR and USVI use the IRS tax code, and for USVI add +10%. There are some local tax breaks in both place for international, non continental us business activity. PR does have some kind of tax break on 'investments' but I don't know if that is only for passive investments, as opposed to your own business. But this is a good suggestion as it is in the USA and is often a great tax deal, with the catch you have to spend less than 180 days per year in the actual states, and spend at least 6 weeks per year in those two US territories. I think you have to spend New Year's Eve there too!
Re: Ask HN: Best country to run a boostrapped startup from? (After Section 174)
#30How are the tax (filing and actual $ burden) complications of being a a majority owner of a foreign corporation?
Terrible. You're stepping into the territory of highly paid tax consultants due to a mountain of regulations which are unevenly enforced. You will be slammed by GILTI and FATCA and more. US citizens involved with foreign businesses must file various reporting forms, including Form 5471 and Form 926 (foreign corporations), Form 8865 (foreign partnerships), Form 8858 (foreign limited liability companies), Form 3520 and…
Wild. Have you personally experienced this?
I've done a bunch of research but haven't heard an actual experience of it being painful and what it truly cost them in $. I'm debating taking US citizenship but may return to Canada someday.