Did you mean SaaS?
Nope, it is a Bootstrapped startup :)
Ask HN: Are there better countries to start my SaaS company for tax reasons?
11–20 of 77 posts
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#12The country you're looking for is Delaware.
Why? Care to elaborate? I asked my Accountant in California about Delaware LLCs. He said that if I am doing my business "in California", it's not advisable to open LLC elsewhere. Esp. if physical good are involved - like a Kickstarter product or some other physical product that is partly or wholly made in another state (i.e. other than Delaware).
Your accountant is correct. Delaware is preferable for C-corps. So if you were setting up stocks and a management structure for future growth / VC investment / Sale you would go with Delaware for low state tax and pro business courts. For LLC/S-Corp that just adds overhead. So it depends on your end game with the business.
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#13Possibly Singapore. They have very rational and simple tax laws, legal stability and are generally a good place to do business.
I'd be worried about the EU, even the more corporate friendly places (Ireland, Estonia) - the recent retroactive ruling on Apple's Irish taxes make the EU seem potentially third world-like unstable.
Of course, if you eventually plan to bring the money back to the US, probably incorporating in the US is your best bet.
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#14Note, I am not an accountant, but these are my experiences running a business in the U.S. If you are a passthrough entity like a sole-propietorship, partnership, or S-corp, probably not. Note, this doesn't matter if you're an LLC or not because the IRS doesn't care. Basically, passthrough entities calculate all business income minus deductible expenses as personal income. Therefore, the amount is subject to federal a…
Wow 45%? What is this, the socialist state without any benefits of it? In Germany you pay less taxes (30%-42%) but you get free healthcare, education, 1 year maternity and paternity leave and tons of other similar benefits...
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#15Note, I am not an accountant, but these are my experiences running a business in the U.S. If you are a passthrough entity like a sole-propietorship, partnership, or S-corp, probably not. Note, this doesn't matter if you're an LLC or not because the IRS doesn't care. Basically, passthrough entities calculate all business income minus deductible expenses as personal income. Therefore, the amount is subject to federal a…
This answer is comprehensive and correct, especially the second half. You cannot game the IRS, period. Google and Apple have billions of dollars in the bank in Ireland they can't spend because they have tried to game the IRS.
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#16No. You're going to be taxed in the US anyways. Incorporating your company in another country just adds significantly more tax compliance, and potentially foreign income taxes, to the mix. Even worse, incorporating as a foreign corporation may make you ineligible for a variety of local, state, or federal tax benefits only available to domestic (meaning US-based) companies.
What exactly in your reasoning is US-specific? Wouldn't everything in your comment be equally true if "Japan", "China" or "EU" were substituted for "US"?
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#17In general, your lawyer and accountant should review anything you bring to their notice, especially suggestions via the internet, before finalizing things. Incorporating in Hong Kong is said to have many benefits, though please remember to be compliant with FATCA. Detailed blog [1]
[1]: http://www.locationindependent.co.uk/nomad-guide-to-incorpor...
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#18Having run companies in various countries, some of them more tax friendly then others, my advice is to keep it simple. Unless your turnover will be in excess of about a million USD annually, the compliance hassles are not worth it. with your money coming from somewhere else, your tax department is going to flag you up, and turn you inside out. you might not be doing anything wrong, but it will be something you will have to deal with, and pay lawyers and accountants to sort out.
I currently have an LTD in Cyprus, and am shortly moving to France. On paper, it is going to be hugely advantageous to keep my LTD in Cyprus, and move income via Cyprus to France. In reality, the likelihood of hassles with the French Tax and social insurance departments is very high, so I'll be setting up shop in France. When the millions start rolling in, I'll figure out some kind of construction, if it will be worth it.
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#19No. You're going to be taxed in the US anyways. Incorporating your company in another country just adds significantly more tax compliance, and potentially foreign income taxes, to the mix. Even worse, incorporating as a foreign corporation may make you ineligible for a variety of local, state, or federal tax benefits only available to domestic (meaning US-based) companies.
What exactly in your reasoning is US-specific? Wouldn't everything in your comment be equally true if "Japan", "China" or "EU" were substituted for "US"?
Because the US taxes American citizens' personal income regardless of the country in which it is earned, which almost nobody else* does.
https://en.wikipedia.org/wiki/International_taxation#Citizen...
* except Eritrea, although China also might want to start doing it [1]
[1] http://www.nytimes.com/2015/01/08/business/international/chi...
Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?
#20You've had all the benefits of the country you're in: roads, schools, research universities that created the software industry, a foreign service that advocated for your right to sell globally. It's time to return part of the favour.
(Also what everyone else said: it's premature optimisation)