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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?

#81
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.

The way I do it, I set up a limited liability company that is just my own name. I then charge for services rendered and income goes into a company in my sole ownership. I then pay salary to the only employee (me). This is common and completely legal.

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

#82

What I keep finding non obvious is equity. And especially ideally keeping US side a Delaware C. How to issue international options and shares?

Is there something stopping a US company from issuing equity to foreign citizens?

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

#83

Wherever the CEO/founder lives. You can always move the company, better to just get something formed and worry about optimizing for taxes later. Pay folks as contractors and you don't have to worry about having a presence in their country.

I am actually not trying to optimize for taxes but rather for low overhead and not spending too much time managing the company but rather building a great product.

unfortunately, this is bad maths.

Open the company anywhere the founder(s) is/are. Just pick a reasonable location if you have many options.

The reasons being that you should never run a business without accounting and legal advice, so you will have someone take care of it for you, and the cost will always cover the risk of doing it yourself poorly.

And when you’re successful, you can always hire more legal/accounting or relocate.

I’ll conclude a bit more harshly: If you’re somehow relying on the costs of operations to balance the success of your company, you might as well just reconsider.

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

#84
Reading this thread (and remembering past pains) I posit that things are too complex almost everywhere.

Some innovation-minded billionaire should buy an island - a white spot on the map (not this one: https://en.wikipedia.org/wiki/Principality_of_Sealand) - and create a new jurisdiction optimized for incubating remote startups.

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

#85
post #77
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.…

> smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons” That only counts for companies with operations in the US. My wife is a US citizen, and my bank - a medium-sized Danish bank - did not care, because they don't operate any business in the US, so they do not need to provide any paperwork for her to US authorities.

Not an attorney, not a tax attorney, not your attorney, but US persons are required to report bank accounts they hold globally under both FBAR and FATCA, and signatory authority on business accounts is also a thing. Additionally, controlled foreign corporations are a thing for US people.

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

#86
post #68

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.

There’s a company called Deel (I’m a customer) that can take a lot of the pain out of this including being the employer of record in many countries. There are others as well.

http://letsdeel.com

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

#87
Lol I wouldn't, I'd head for the hills. If choice of where to incorporate is being made to align with mitigating tax liabilities. I wouldn't work for that company as it doesn't align with my ideals.

Gross business is gross.

Other than that probs EU. Gdpr is good, murica has crap like HIPAA, straya well we're basically the wild west rife with white collar crime. Which I mean is ok if you understand from the get go the playing fields aren't even. Dice roll between those three.

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

#88

Earlier quoted context omitted.

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?

Yes

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

#89

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…

On top of that, even after you lose your "US person" status, some financial institutions may just claim that "you have been found in a US registry" without any specification which registry, and now either you prove that you are no longer in the unspecified US registry, or they just deny business with you. Not fun, and a fight that you cannot win.
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