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Ask HN: Is forming a company in UK a good option for a non-US resident

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Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#11

Post by yummyfajitas »

Singapore and Estonia both seem to be doing things right. Singapore (unlike Estonia) also has a fairly long tradition of being a great place for foreigners to incorporate, a well established and stable legal regime, sane taxation, etc. Estonia also looks pretty good, but they haven't been around as long so the odds of them making trouble for you in the future are probably higher than Singapore.

A Singapore corp will require you to pay taxes once on corporate income. After that it's simple - make distributions to yourself and pay only local taxes. It's as if Singapore asked economists what the most efficient way to run a society is and then actually did that.

A US business entity is probably a very bad idea due to things like taxation on global income and just general US insanity.

Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#12

Post by pjc50 »

strls wrote: post #8
jorgemf wrote: post #4

In UK are very stricts with all the paper work, if you don't do something right you will receive a fine (and not a small one regardless of what you missed). There are companies with manage this type of things and deal with all the paperwork. Just search for how to open a company in Uk. Some of them also helps with opening the bank account. For me the worst thing about a Europe company is to deal with taxes when you s…

I have no problem with them being strict as long as it's not very difficult or expensive to comply. Is this the case? I don't suppose IRS or any other authority is particularly casual either. Thank you for mentioning the VAT issues. I've read about that, and as I understand, there's a bunch of services for dealing with VAT collection. Some payment solutions presumably even handle it for you.

(Experience: I have been a director for a tiny UK "company limited by guarantee", which is a funny-shaped nonprofit organisation.)

It's not at all difficult or expensive to comply if you're a small business; the whole thing is pretty streamlined. You need to file accounts, but for a small turnover you can file "simplified" accounts which are just two tables. There is one subtlety - you can't be a limited company by yourself. The minimum is one director and one "secretary", but you can get company-secretary-as-a-service.

VAT is a separate issue - you have to deal with it regardless of whether you're a company or sole trader, if your turnover is high enough or you're selling digital goods (VATMOSS disaster).

Background info: https://www.gov.uk/topic/company-registration-filing/startin...

e.g. These people offer a full package for £70, which if your time is at all valuable is a good deal: https://www.rapidformations.co.uk/package/all-inclusive-pack...

- what UK taxes do you owe as a non-EU resident member of a UK company on salary (besides the obvious 20% of company income)

http://www.hmrc.gov.uk/manuals/rdrmmanual/rdrm10425.htm : implies you don't have to pay UK income tax, which makes sense. You'd have to pay your local income tax instead. I'm not sure how this applies to national insurance (what Americans call "social security").

- can you deduct your salary from company's taxable income?

Yes, companies are taxed on profit not turnover.

Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#13

Post by [deleted] »

strls wrote: post #10
therealmarv wrote: post #7

- deleted comment about US company... - Regarding UK limited... there are special service companies which assist you in creating one, also helping you with taxes etc. But I don't know how this works for non EU residents.

No offence, but this is contradicting everything I've learned about US incorporation so far :) Do you have any sources I can look into? From what I know you can easily form and operate a company in the US without ever being present there. You would have to come in person to get a bank account though. I know there are always companies who will take money for assisting with any kind of crazy stuff. Here I just wonder i…

[deleted]

Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#14

Post by ams6110 »

strls wrote: post #8
jorgemf wrote: post #4

In UK are very stricts with all the paper work, if you don't do something right you will receive a fine (and not a small one regardless of what you missed). There are companies with manage this type of things and deal with all the paperwork. Just search for how to open a company in Uk. Some of them also helps with opening the bank account. For me the worst thing about a Europe company is to deal with taxes when you s…

I have no problem with them being strict as long as it's not very difficult or expensive to comply. Is this the case? I don't suppose IRS or any other authority is particularly casual either. Thank you for mentioning the VAT issues. I've read about that, and as I understand, there's a bunch of services for dealing with VAT collection. Some payment solutions presumably even handle it for you.

The IRS is actually fairly forgiving about honest mistakes, in my experience. Fraud is another matter of course.

Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#16

Post by jcr »

strls wrote: post #10
therealmarv wrote: post #7

- deleted comment about US company... - Regarding UK limited... there are special service companies which assist you in creating one, also helping you with taxes etc. But I don't know how this works for non EU residents.

No offence, but this is contradicting everything I've learned about US incorporation so far :) Do you have any sources I can look into? From what I know you can easily form and operate a company in the US without ever being present there. You would have to come in person to get a bank account though. I know there are always companies who will take money for assisting with any kind of crazy stuff. Here I just wonder i…

The post from "therealmarv" is wrong on just about everything.

Incorporation laws vary from state to state in the US, but they tend to be fairly similar. Many states do not have state income taxes for companies, and have business-friendly laws, hence the reason why so many humongous companies are registered in the tiny state of Delaware. A lot of publicly traded companies (and I think most YC-funded startups) are registered in Delaware. In Delaware, all you need in your incorporation filings is an "Agent of Record" and there are many "create your own Delaware company" type sites that provide "Agent of Record" services, including postal mail forwarding and similar.

BTW, you might want to dig on the main YC site. I recall seeing something about incorporation paperwork and such.

Once you have a US corporation, you can get an EIN number from the IRS which is basically your tax ID for filing Federal Income taxes with the IRS. Your EIN number and incorporation papers is enough to get a US bank account for your business. From there, everything else you might want to do becomes even easier.

None of the above is difficult or particularly expensive. It might cost you about $1K total, plus yearly recurring fees for Agent of Record services.

Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#17

Post by ecesena »

From my point of view, you should consider first where are your customers, and then -assuming you'd like to- where you'd like to look for fundings.

If you plan to market US companies and potentially raise money in the US, then you should incorporate in the US. You don't need to live there, although I'd recommend for alignment with your customers' time and build connections to raise. After initial expenses (i.e. the company is alive and running) it's relatively easy to get a visa.

If you're serious about your biz, you should take any decision to maximize its success, not to save a few bucks at the beginning.

Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#18

Post by UK-AL »

pjc50 wrote: post #12
strls wrote: post #8

Earlier quoted context omitted.

I have no problem with them being strict as long as it's not very difficult or expensive to comply. Is this the case? I don't suppose IRS or any other authority is particularly casual either. Thank you for mentioning the VAT issues. I've read about that, and as I understand, there's a bunch of services for dealing with VAT collection. Some payment solutions presumably even handle it for you.

(Experience: I have been a director for a tiny UK "company limited by guarantee", which is a funny-shaped nonprofit organisation.) It's not at all difficult or expensive to comply if you're a small business; the whole thing is pretty streamlined. You need to file accounts, but for a small turnover you can file "simplified" accounts which are just two tables. There is one subtlety - you can't be a limited company by y…

The company secretary and director can be the same person. It used to be the case they had to be separate, however they changed it several years back.

Now 1 person can run a company.

Re: Ask HN: Is forming a company in UK a good option for a non-US resident

#20

Post by _vn5r »

simonebrunozzi wrote: post #19

Take a loot at Atlas, by Stripe: https://stripe.com/atlas

People really need to stop recommending Atlas without having a first-hand experience. They are currently in wait list phase. They said they would be in that mode for many months (not even an ETA), and apparently, they are picking unicorns for now.
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