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

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

#21

Post by dogma1138 » Fri, Mar 25, 2016, 3:05 PM UTC

MistahKoala wrote: post #9

You're perhaps better asking an accountant in the UK, rather than a lawyer. It costs ~£15 to start a limited company in England and Wales (a separate jurisdiction to Scotland and Northern Ireland). So long as you keep accurate records and file your annual accounts correctly, that's all there is. An accountant would normally do the filing for you. For a small business this can often be done for £500-£1000. If you do y…

The law is different for non residents.

So a lawyer which specialized in this is defiantly recomended.

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

#22

Post by PaulHoule » Fri, Mar 25, 2016, 3:08 PM UTC

Why not the Cayman Islands? I was involved years ago in a 'distributed company' (US, Colombia, Brazil) that was offering a service to the Portuguese-speaking world (Brazil, Portugal) and we were registered in the Caymans.

Things worked out pretty well and the only trouble I had relative to the administration was that my name was on some paperwork that went to vendors and I'd sometimes get calls from vendors who would ask "Is this some kind of scam?" and then I would rattle off a list of well-known names that have important subsidiaries in the Caymans.

Luxembourg seems to be the flag of convenience for the EU, just as Delaware is here in the US, although Delaware puts you smack dab in the middle of FATCA land.

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

#23

Post by strls1 » Fri, Mar 25, 2016, 3:08 PM UTC

ecesena wrote: post #17

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 c…

Could you please elaborate why you think it's important to be registered in the U S to market to US companies?

What are the types of markets/customers sensitive to the place of incorporation of their software/SaaS vendor?

I will not try to save money at the expense of the business, but I don't want to spend without understanding why it's necessary.

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

#24

Post by falsestprophet » Fri, Mar 25, 2016, 3:18 PM UTC

If I was setting up a SaaS company outside of the US, I'd be concerned with tax rates, acquiring a bank account and processing credit cards.

It is worth noting that you don't necessarily have to have your bank account in the same jurisdiction that the company is incorporated.

There are many zero tax offshore jurisdictions (like BVI and Cayman Islands) and at a large scale you can get bank accounts and process credit cards anywhere. But, starting from zero I think it's a lot easier to use Stripe or Braintree.

I've listed several jurisdictions that are compatible with Stripe and Braintree by corporate tax rates. You may be able to achieve a lower rate by paying yourself a salary.

Stripe & Braintree

  Ireland (12.5%)
  Singapore (17%)
  United States (~35%)
  United Kingdom (~20%)

Braintree

  Lichtenstein (12.5%)
  Isle of Man (0%)
  Jersey (0%)
  Guernsey (0%)

So, I would consider Ireland and the above Crown dependencies.

Sources: https://www.braintreepayments.com/country-selection https://stripe.com/global

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

#25

Post by entropyneur » Fri, Mar 25, 2016, 3:22 PM UTC

No experience with UK specifically, but being in the same position as you are (Eastern Europe, problems working with payment providers because of both their unwillingness and stupid local laws) I want to give you a warning. Do check your domestic laws on corporate tax residence. A lot of countries (e.g. Russia as of lately) will want to tax your company simply based on the residency of the physical person(s) managing the company (you in this case). So make sure you don't end up owing taxes in both jurisdictions. And even if your country has a treaty on double taxation with e.g. the UK the procedure to apply for an exemption may be really gruesome.

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

#26

Post by pjc50 » Fri, Mar 25, 2016, 3:25 PM UTC

UK-AL wrote: post #18

pjc50 wrote: post #12

Earlier quoted context omitted.

(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.

Ah, you're right - it changed in 2009 as a result of the 2006 act (which otherwise made a whole bunch of things more complicated).

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

#27

Post by strls1 » Fri, Mar 25, 2016, 3:29 PM UTC

PaulHoule wrote: post #22

Why not the Cayman Islands? I was involved years ago in a 'distributed company' (US, Colombia, Brazil) that was offering a service to the Portuguese-speaking world (Brazil, Portugal) and we were registered in the Caymans. Things worked out pretty well and the only trouble I had relative to the administration was that my name was on some paperwork that went to vendors and I'd sometimes get calls from vendors who would…

I find there's too little open information on how for a software company to do things properly in classic off-shore jurisdictions. Everything on the web related to this seems shady so I don't know what to believe. Things like: are there online payment processors that work with Cayman Islands? Where will I be able to open a bank account? and more - are not clear. I'm sure there are use cases for tax havens, but for me it looks like a more expensive and complicated option. Maybe i'm wrong. I just a simple and sure way to do small business, I don't mind paying some taxes and sending a report a year.

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

#28

Post by StavrosK » Fri, Mar 25, 2016, 3:30 PM UTC

PaulHoule wrote: post #22

Why not the Cayman Islands? I was involved years ago in a 'distributed company' (US, Colombia, Brazil) that was offering a service to the Portuguese-speaking world (Brazil, Portugal) and we were registered in the Caymans. Things worked out pretty well and the only trouble I had relative to the administration was that my name was on some paperwork that went to vendors and I'd sometimes get calls from vendors who would…

I've tried both UK and Cayman. UK is very very cheap to set up, you can get online services sending you the paperwork you need for a nominal fee and the HMRC is very friendly. The company costs $20 a year or something to file the return, the accountant costs a couple of hundred pounds, and that's it.

With the Cayman islands, you're looking at $2500 per year, and if you need the lawyers to so much as look at you you have to pay a few hundred dollars. A bank account will also run you $1500 to open and $600/yr. The big draw is that there is no tax, no books to file (but you should keep them), and they generally don't really care what you do.

So, it depends on how much you'll be making. If your earnings will be such that the UK tax is going to be around $3000, go with Cayman, because you don't have the hassle with dealing with a tax authority.

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

#29

Post by jasiek » Fri, Mar 25, 2016, 3:30 PM UTC

Running a company in the UK is super easy compared to some eastern european countries - far less bureaucracy, regulations (maybe apart from VAT-MOSS, but that's an EU thing) are easy to follow and most things can be done online. An accountant can do a lot of this for you and they cost between £60-120 a month. You will have to show up in person for an appointment to open a bank account though, and UK banks, generally - suck.

In terms of taxation, CIT/VAT are similar to everywhere else in Europe, PIT depends on where you live, so you need to talk to an accountant in your home country.

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

#30

Post by strls1 » Fri, Mar 25, 2016, 3:32 PM UTC

entropyneur wrote: post #25

No experience with UK specifically, but being in the same position as you are (Eastern Europe, problems working with payment providers because of both their unwillingness and stupid local laws) I want to give you a warning. Do check your domestic laws on corporate tax residence. A lot of countries (e.g. Russia as of lately) will want to tax your company simply based on the residency of the physical person(s) managing…

This is true. Care is required so that the company is not considered a tax resident here. There are some specific things to avoid.