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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?

#21

Post by lukeqsee »

SkyAndSand wrote: post #16
deltaci wrote: post #8

Estonia is also a really good choice within EU. With their digital residency card, everything can be managed online with digital signatures only.

I've heard lots of people talking about Estonia but can you name any international remote-first startup that became successful and raised money with an Estonian entity? I don't and this makes me somewhat suspicious :)

I don't know of remote-first companies, but I know of many Estonian companies that have raised a lot of money and been incredibly successful.

To name a few:

    - Bolt
    - Wise (TransferWise)
    - Pipedrive
I have a long history with e-Residency and know many e-Residents (e-Resident since 2015, 3 companies, member of EERICA.ee). Happy to chat about it. Email in bio.

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

#22

Post by gumby »

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…

The Delaware tax is pretty low. Stick to Delaware as it’s corporate law is well known to everyone. The state of incorporation has nothing to do with where you might operate.

Keep it simple.

Note that I am part of an LLP that a group of us use for investing and consulting projects and it’s a Wyoming corporation with company office in Kentucky and no legal presence in California. These kinds of specialized entities are not worth the hassle except in unusual cases, and almost certainly you aren’t a specialized case. For example this setup doesn’t have much of a benefit for me (though it doesn’t hurt) but it does for a couple of my partners. Also: I don’t mind paying taxes.

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

#23

Post by jpgvm »

If you want VCs then it's always the US and should always be a Delaware corp.

For non-VC funded companies HK is great, allows for tax minimization, minimal headaches, access to international banks and potential access to Chinese market if that is important for your business.

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

#24

Post by thruflo »

I’ve founded companies in the UK, US and EU. I’d recommend the UK.

The cost of a limited company is £12. It’s formed in a day. Use https://www.ukpostbox.com if you need an address.

The legal system is well known and entrepreneur friendly. Accountancy and company admin are simple and relaxed. HMRC is supportive. You can pay dividends on a flexible schedule.

There’s a very large ecosystem of financial support, innovation grants, incubators, accelerators, angel networks and VC firms.

Flip to the US for later stage funding. Nice problem to have.

Needless to say, IANAL, this is not financial advice, crayons, etc.

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

#25

Post by lbotos »

SkyAndSand wrote: post #14
giaour wrote: post #12

With a fully remote setup like you describe, what are the mechanics of hiring a foreign team member? Do you need a subsidiary or some legal entity in the foreign country in order to pay employment taxes? If they're direct employees of the US entity, what's their legal status in the US? Can you avoid all these questions by using foreign contractors rather than hiring foreign employees?

These are all really good questions. I am not sure. I think that you could work around these issues by either "hiring" people as contractors or using something like https://remote.com/ or https://www.letsdeel.com/ . But I'd definitely be interested in hearing how other companies solved this problem (which is partially why I created the post).

1. I'm not a lawyer.

2. If you want to hire someone abroad (outside of the business' country) then contractor.

3. If you hire enough contractors, you may be forced to set up an entity or use a PEO. Local governments see that as skirting employment law.

(I work at an all-remote company that is pretty transparent, and people lambast us all the time because they are upset we don't hire in $a_country_they_think_we_should and it's almost always "tax and labor law is complex, we can't hire there until we understand the implications better.")

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

#26

Post by popcalc »

SkyAndSand wrote: post #17
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.

Similarly to Estonia I've heard lots of people recommending Malta but can't really name any international remote-first startup that became successful and raised money with an Maltese entity..

If you look into the egaming and adult sectors you'll find a lot of success stories. But these guys actively try to stay out of the media.

>raised money

If you want to raise VC funds with no revenue there really is no better option than Delaware. Malta/Isle of Man/Jersey are meant for businesses that generate so much cash you don't know what to do with it.

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

#28

Post by hodgesrm »

SkyAndSand wrote: post #14
giaour wrote: post #12

With a fully remote setup like you describe, what are the mechanics of hiring a foreign team member? Do you need a subsidiary or some legal entity in the foreign country in order to pay employment taxes? If they're direct employees of the US entity, what's their legal status in the US? Can you avoid all these questions by using foreign contractors rather than hiring foreign employees?

These are all really good questions. I am not sure. I think that you could work around these issues by either "hiring" people as contractors or using something like https://remote.com/ or https://www.letsdeel.com/ . But I'd definitely be interested in hearing how other companies solved this problem (which is partially why I created the post).

We are US incorporated with staff in 14 countries. We use contracts for non-US staff and recently implemented letsdeel. So it looks good. You do not need a legal entity in most countries and in fact there can be significant disadvantages. The accounting management alone is a nightmare if you do it yourself.

Ps most people set up their own company and we contract with that.

Edit: add ps

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

#30

Post by SkyAndSand »

lmeyerov wrote: post #27

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

Good point, added that to the list of requirements in the original post. I am asking myself the same question.
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