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Ask HN: Where would you incorporate your European startup?

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Re: Ask HN: Where would you incorporate your European startup?

#31

Post by vruiz »

Loic wrote: post #21

Take a good lawyer, accountant. I am French and created two companies in UK (Ltd) and one in Germany (GmbH). In theory, UK was better, in practice, because I live in Germany, the GmbH is more convenient. Also, a lot of your optimisations are dependent on your products. Are you selling software (licenses), consulting or goods? Are you doing import from outside of the EU? Sometimes, depending on your product, a country…

Interesting. What are your obligations in Germany when you have a UK Ltd? How much of a hit do you get on your personal taxes? I've heard of someone with a Ltd operating completely under German tax law, but that sounds like a nightmare.

Re: Ask HN: Where would you incorporate your European startup?

#32

Post by pjc50 »

r2dnb wrote: post #17

I've incorporated in the UK but I kind of wonder if I made the right choice. It's a fantastic country, but one thing that bothers me and that I discovered too late - only a few weeks ago - is privacy. This is a real one, pay attention to it. Basically, private companies are as public as american public companies. It's ok to have disclosures to make to the government, but here you also have to disclose your financials…

> your MONEY IN THE BANK

There's a huge lag on this information: people can find out how much you claimed to have on your balance sheet at the time you last filed, which could be something like 18 months ago.

(Do US LLCs really not require you to file accounts? Why does everyone choose Delaware, anyway?)

It basically serves the same purpose as the Experian et al credit scoring system. The purpose is to protect creditors and customers against entering into contracts with fraudulent entities. Part of the tradeoff for limited liability.

I've done company creation and small co filing in the UK, all manually because the company had a nominal amount of money and was a "limited by guarantee". Fairly quick and easy.

Re: Ask HN: Where would you incorporate your European startup?

#33

Post by [deleted] »

r2dnb wrote: post #17

I've incorporated in the UK but I kind of wonder if I made the right choice. It's a fantastic country, but one thing that bothers me and that I discovered too late - only a few weeks ago - is privacy. This is a real one, pay attention to it. Basically, private companies are as public as american public companies. It's ok to have disclosures to make to the government, but here you also have to disclose your financials…

[deleted]

Re: Ask HN: Where would you incorporate your European startup?

#34

Post by bbrazil »

phillc73 wrote: post #9

Ireland perhaps. Forming a Limited company in Ireland is cheap and straightforward. That is compared to a GmbH in Austria or Germany where you need thousands of Euros in share capital just to form.[0] Ireland uses the Euro, which might be an advantage over the UK with Pounds Sterling. No forex worries. Ireland also has a low corporation tax rate of 12.5% The only two trickier bits are setting up a registered address…

The going rate for setting up an Irish company is around €250, and mine only took a few days.

Getting an Irish bank account is painful though, and that's with me being Irish in Ireland. I wouldn't try it from Portugal - though presumably you could use a local bank.

Re: Ask HN: Where would you incorporate your European startup?

#36

Post by mikkom »

siscia wrote: post #14
aharonovich wrote: post #6

Earlier quoted context omitted.

thanks!

You are welcome ! BTW if you are a Portuguese citizen you can register your company in a easier way, from this page: https://e-estonia.com/component/e-business-register/ Finally if you want to open a company in estonia you will need a physical address, fortunately the government is aware of this hurdle, and in it's website suggest an handful of providers: https://e-residency.zendesk.com/hc/en-us/articles/205207022-..…

You need more than a physical address, you need to live in estonia if you don't want to pay extra taxes. This is true for at least Finland, I have consulted tax lawyers about this.

Re: Ask HN: Where would you incorporate your European startup?

#37

Post by SixSigma »

r2dnb wrote: post #17

I've incorporated in the UK but I kind of wonder if I made the right choice. It's a fantastic country, but one thing that bothers me and that I discovered too late - only a few weeks ago - is privacy. This is a real one, pay attention to it. Basically, private companies are as public as american public companies. It's ok to have disclosures to make to the government, but here you also have to disclose your financials…

I'm a UK citizen. I am more shocked that the information you are uncomfortable in disclosing is not shared by a US incorporation.

Creating a Limited Company is in order to protect company owners from the debts of the company. For me to expose my company to the liability of doing business with your company, e.g. give you credit terms, I would rather like to know your financial soundness.

Society agrees to waive your debts in return for these disclosures. Personal financial ruin through business risk is eliminated through socialising the risk. This is agreed to be a risk society takes in return for an interesting economy.

Re: Ask HN: Where would you incorporate your European startup?

#38

Post by desdiv »

MatthewWilkes wrote: post #30
r2dnb wrote: post #17

I've incorporated in the UK but I kind of wonder if I made the right choice. It's a fantastic country, but one thing that bothers me and that I discovered too late - only a few weeks ago - is privacy. This is a real one, pay attention to it. Basically, private companies are as public as american public companies. It's ok to have disclosures to make to the government, but here you also have to disclose your financials…

Private vs public refers only to the way that shares are bought and sold, corporations don't have a right to privacy. The details that are public about your company are related to the size of the company.

That really depends on the jurisdiction.

For example, the stockholder, director, and officer information of a Nevada corporation[0] is not disclosed to the public. AFAIK there's no limit on a Nevada corporation's size for these privacy guarantees to continue to apply.

[0] https://en.wikipedia.org/wiki/Nevada_corporation

Re: Ask HN: Where would you incorporate your European startup?

#39

Post by to3m »

r2dnb wrote: post #17

I've incorporated in the UK but I kind of wonder if I made the right choice. It's a fantastic country, but one thing that bothers me and that I discovered too late - only a few weeks ago - is privacy. This is a real one, pay attention to it. Basically, private companies are as public as american public companies. It's ok to have disclosures to make to the government, but here you also have to disclose your financials…

You forgot to provide a link :) - https://beta.companieshouse.gov.uk/help/welcome

Smaller companies (and the bar is set pretty high; see https://www.gov.uk/annual-accounts/microentities-small-and-d...) can supply abbreviated accounts. These are pretty useless for anybody looking - it's just a snapshot at year end, with no information about totals over the year. The accounts for my company provide the following details:

- Money currently owed to it [A]

- Current bank account balance [B]

- Amount it currently owes [C]

- Total share capital (also available from the annual return) [D]

- P&L - A+B-C-D

- Shareholder's funds - A+B-C

It's not actually very easy to get accurate figures from this. For a software/consulting/contracting/etc. type business I suppose multiplying A by 6-12 (assuming it's 1-2 months of income owed by clients/payment processor/etc.) is probably your best guess at estimating revenue... but if the year end was at all unusual, you're out of luck. Cash in the bank is merely suggestive, and money owed could be just about anything.

Re: Ask HN: Where would you incorporate your European startup?

#40

Post by cmenge »

For those suggesting the German UG, be aware that dissolving and operating it can be quite expensive. Fine if you have a solid business, problematic if it's more of a test and you simply needed some 'real' company for that stripe account...

Yearly filing must be done by a tax accountant and you have to pay for the 'services' of the Handelskammer, which is around 800 and 200 EUR at least, respectively, per year. Dissolving takes one year at the very least and incurs additional cost of at least EUR 500,- plus the year in which the company lives as a zombie, so 1.5k total.

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