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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?

#61

Post by renewiltord »

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 mention it. More information is always better :)

Good luck! Eager to hear how it goes.

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

#63

Post by morpheuskafka »

jokull wrote: post #31

Delaware company and then all team members get set up as contractors in their country of residence. If they are in the EU they can contract from where they are from but live within the EU - more flexibility. But putting people on payroll has a huge overhead - better compensate employees to pay a local book keeper to invoice and process their payroll. Encourage people who have not contracted to research what contracto…

This will require research on each countries laws, some countries have very rigid definitions of what qualifies as employment and will not allow those payments to be classified as contract income, dividends, or anything else.

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

#64

Post by bonestamp2 »

troydavis wrote: post #6

Based on your description, your goals are predictability and low or outsource-able overhead. For those goals, the US is the clear choice. By far the largest pool of investors and employees are comfortable with US entities as counterparties. Plenty of companies will incorporate, prepare tax returns, and handle other compliance items (unemployment insurance) for relatively small fees. As far as states, if you don't car…

On this note, if you're forming a company in the US and some of the owners/founders are not American, be sure to get an accountant and lawyer in the US to confirm your compliance with US foreign ownership laws.

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

#65

Post by codethief »

WanderPanda wrote: post #59
jokull wrote: post #31

Delaware company and then all team members get set up as contractors in their country of residence. If they are in the EU they can contract from where they are from but live within the EU - more flexibility. But putting people on payroll has a huge overhead - better compensate employees to pay a local book keeper to invoice and process their payroll. Encourage people who have not contracted to research what contracto…

I'm pretty sure this would be illegal for employees in Germany because of the "Scheinselbstständigkeit" (False self-employment?)

Does this also hold if your employer (i.e. your client) is outside Germany?

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

#66

Post by kzrdude »

lordnacho wrote: post #13

I don't see Malta mentioned. They speak English, are in the EU, use Euros, and have low tax. Nice weather too.

Malta ranks high on a corruption index like https://www.transparency.org/en/blog/cpi-2020-malta-lost-in-...

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

#67

Post by lmeyerov »

runnerup wrote: post #50
TedDoesntTalk wrote: post #39

Earlier quoted context omitted.

There’s nothing specialized about incorporating in Wyoming. And it takes minutes without a lawyer. The amount of paperwork is ridiculously low compared to Delaware. Last I recall Delaware has a minimum $500/year registration fee, more depending on outstanding shares. Not Wyoming.

You'll also need to consider "alien entity" fees/taxes if you want your "Delaware" corporation to operate in another state, e.g. Texas.

Such fees are basically nothing for a company that makes money

High % taxes are where things get way dicier, e.g., some US states have high capital gains / transaction taxes while others are basically 0, which vastly changes how good exits are for employees

"Penny wise, pound foolish" => optimize for low opex overhead on growth. Another example: $1K to setup a new state registration for an employee sucks, but is fine relative to their salary, so not the the # to optimize on.

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

#68

Post by gardnr »

troydavis wrote: post #6

Based on your description, your goals are predictability and low or outsource-able overhead. For those goals, the US is the clear choice. By far the largest pool of investors and employees are comfortable with US entities as counterparties. Plenty of companies will incorporate, prepare tax returns, and handle other compliance items (unemployment insurance) for relatively small fees. As far as states, if you don't car…

Most US companies will hire remote "inside the USA" but not outside the USA due to potential foreign tax and legal liabilities. While the USA might be good for the reasons you listed, hiring remote full-time employees can be a legal minefield. If every employee is a contractor then that introduces its own legal issues in the USA.

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

#69

Post by yayr »

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 foreign entity.

So in a bad case as majority owner you will then have to do the taxes and other admin topics in the country of your company AND in Germany and you'll always have a special relationship with a curious tax office.

So the only way to have really a startup in a non-German jurisdiction is to make sure that your management decisions (and usually also some infrastructure) is set up there.

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

#70

Post by kube-system »

SkyAndSand wrote: post #38
gumby wrote: post #18

I recently had to consider this and was quite surprised to discover that the US was the best place. Compared to most countries the US has been a tax haven for a long time, but the 2017 tax change meant that in most cases the US would be a significantly cheaper place to recognize revenue.* Also the mechanics of getting the boring things done is significantly easier, as noted by the Germany post cited in your question.…

> Because of the US FATCA law you may have trouble opening a bank account in some countries (smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”, a term which has specific meaning). In practice this just means you have to deal with larger banks. You mean opening a bank account personally or for the company? Because for the company I'd simply use Wise or Mercury and…

I believe they are referring to the concept of corporate personhood. FACTA applying to "US persons" means it applies to corporate accounts too.
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