Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

news.ycombinator.com

Post reply on HN
Print view View original

201–208 of 208 posts

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

#201

Post by glenngillen »

csomar wrote: post #161
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…

Having a US phone number, bank account, company and a house does not make you a "US-Person". So why the banks ask you these questions? The banks deal with FATCA with checkboxes. If you cross one incorrectly, I can imagine they need documentation for that. And no bank wants that.

I currently answer yes to all of those questions except owning property in the US. I am not deemed a US person. I carry no obligations or liabilities related to FACTA with my local tax office nor the IRS.

This is purely a procedural thing for a bank. If you qualify as a US Person then the bank is going to withhold additional tax on your accounts and you’ll have to get a rebate for any discrepancies you are owed when you file your returns. While I hate the whole process and think it’s a gross overreach by the US gov, it’s governance 101 stuff for a bank. If you’re dealing with a bank that is incapable of doing this I’d recommend finding different bank. This is like the “no brown m&ms” basic competency check in a band’s tour rider. If they’re not getting this right then who knows where else they’re incompetent.

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

#202

Post by withinboredom »

ztrww wrote: post #193
gumby wrote: post #169

Earlier quoted context omitted.

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?

Owned by a US person?

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

#203

Post by rambojazz »

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…

Why are "US person" hated?

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

#204

Post by PaywallBuster »

SkyAndSand wrote: post #185
PaywallBuster wrote: post #182

Anyone have experience with "non-resident" US LLC ? That would be one way to avoid corporate taxes while being established in a reputable jurisdiction? But for online businesses I guess at some point you'd be selling to US customers, so would that complicate things?

I do, what do you want to know?

would be good to know more in general, if you'd like to share

I'd like to know, specifically about my last point > "But for online businesses I guess at some point you'd be selling to US customers, so would that complicate things?"

because selling anything online like SaaS / digital products / etc, would be very easy to get a few american customers and that would incur corporate tax? at least for that portion of the revenue ?

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

#205

Post by FooBarWidget »

rambojazz wrote: post #203
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…

Why are "US person" hated?

Probably because FACTA compliance is a huge pain.

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

#206

Post by hodgesrm »

SkyAndSand wrote: post #136
hodgesrm wrote: post #55

Earlier quoted context omitted.

Delaware, though we originally incorporated in the UK and then flipped as a condition of receiving investment. (Thanks Accel people!) The flip was the most complicated thing we've done--accounting, lawyers on both sides to avoid the dreaded taxable event, etc. I would absolutely do the same in future. The contract to individual or individual's company is a standard model for remote companies like us that work on open…

Thanks for the offer. Will get in touch later but I think that public replies could hopefully be helpful for others. The setup sounds great! I assume that you flipped to a C-Corp? Are most of the founders in the US or are you living abroad? How long did it take to flip the UK LTD? Do you force your contractors to set up companies or is it up to them? At least if the contractors are in Germany and are working full-tim…

(Sorry for the delay, on the road.)

We're a US C-Corp. Our founders are spread out over the US and Europe. I'm not one of them myself, but rather joined later.

The flip from UK to US took 2 months end-to-end and cost close to $100K all-in. This might seem like a lot, but we had a working company with contracts and needed to be careful to avoid creating a taxable event. We also had to arrange transfer payments as we kept the UK company as a subsidiary to avoid the aforesaid event. (A real headache--it's better to keep just the US company if you can, post-flip.) If anybody is coming out of the UK I strongly recommend Ashfords LLP on the UK side and Wilson, Marshall, Taylor on the US side. They are both super and guided us well.

As far as staff--we don't force them to do anything in countries where we don't have a legal presence. We leave it up to them to make whatever arrangements they find reasonable and route payments accordingly. In general having your own company seems to be the best route across many companies. I used that myself in the US before we flipped, because I was being paid from the UK.

I can't speculate on German labor law as I've not had experience with it. Our approach is to take things a day at a time and work things out as they arise. It has worked well so far.

To be honest we've probably had more issues with US jurisdictions than non-US. The state and local tax regime in the US is very complicated and requires accounting and tax advice on a regular basis. I was surprised how much attention it needs.

Happy to answer more questions if it helps people.

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

#207

Post by hodgesrm »

__d wrote: post #157
hodgesrm wrote: post #55

Earlier quoted context omitted.

Delaware, though we originally incorporated in the UK and then flipped as a condition of receiving investment. (Thanks Accel people!) The flip was the most complicated thing we've done--accounting, lawyers on both sides to avoid the dreaded taxable event, etc. I would absolutely do the same in future. The contract to individual or individual's company is a standard model for remote companies like us that work on open…

Second this: I worked for years as a contractor for US-based companies from US, DE, and AU. No issues tax-wise -- it's just a service agreement between the two companies/legal entities. Similarly, I often had just a Google (email, calendar, docs, etc) and GitHub account. Legal agreements were like 3 pages total (mostly an NDA).

Right. We put a lot more effort into ensuring people get on-boarded and properly integrated. That's the hard part (on both sides) to making the distributed company model work. I don't think you can ever do enough on that. We owe a debt to other companies like MySQL AB who provided models for remote organization.

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

#208

Post by vruiz »

SkyAndSand wrote: post #132
vruiz wrote: post #97

Earlier quoted context omitted.

As someone who tried UK, opening a bank account not being a UK resident and without proof of existing UK customers was extremely challenging.

That is interesting! Which bank did you end up with finally and how did you convince them? Couldn’t you use something like Wise in the beginning?

At the end I ended up reincorporating in my country of residence. Which was a pity. But in the UK everything was extremely easy until it wasn't, I got spooked by that and preferred not to take further risks.
Post reply on HN