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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?

#111

Post by blibble »

jll29 wrote: post #79
thruflo wrote: post #24

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, innovati…

I would have seconded that up to the botched implementation of Brexit, now there are many areas of increased risk because (a) certain things are not yet sorted out (increased uncertainty) and (b) the process is antagonistic and politicized instead of cooperative, so the issues are unlikely to be resolved anytime soon. The UK is still a relative good countries for starting up, just not as good as it used to be.

if you're selling services it's been sorted since Jan 2020: there is no deal

(if you're selling beef, cars or washing machines then yes there's potential uncertainty)

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

#112

Post by jpmoral »

PragmaticPulp wrote: post #91
gardnr wrote: post #68

Earlier quoted context omitted.

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.

> Most US companies will hire remote "inside the USA" but not outside the USA due to potential foreign tax and legal liabilities. That’s not a unique feature of the USA. It doesn’t matter what country you’re incorporated in. You’re still obligated to follow the local laws and tax codes of any foreign country you hire in. Technically some companies (shady crypto plays especially) will try to incorporate in a weird loc…

Sorry, 'flout', not 'flaunt'.

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

#113

Post by Nextgrid »

thrill wrote: post #47

There's a reason the Cayman Islands have two-thirds of the world's hedge funds incorporated there. It has a long and stable financial history and has stated that any structural financial changes will be grandfathered where legally possible. That sort of stability is worth the $100/month it takes to keep an international business there.

Do you have more info about the $100/month to keep a business there? Is that a third-party service or is it an official fee to keep a company on the register?

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

#114

Post by p3nm8 »

From a litigation standpoint, if you stay in Europe, consider Switzerland as a neutral jurisdiction (Rechtswahl). This is independent from where your company will be registered. Else the US, as mentioned already, is a good place. Generally to keep in mind is, that apart from the tax standpoint consider also questions regarding labor regulations and civil damages (Schadensersatz).

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

#115

Post by markdown »

TedDoesntTalk wrote: post #110
lmeyerov wrote: post #67

Earlier quoted context omitted.

Such fees are basically nothing for a company that makes money High % taxes are where things get way dicier, e.g., some US states have high capital gains / transaction taxes while others are basically 0, which vastly changes how good exits are for employees "Penny wise, pound foolish" => optimize for low opex overhead on growth. Another example: $1K to setup a new state registration for an employee sucks, but is fine…

The annual filing fees and documents required by Delaware is arcane. Things like “annual meeting of the shareholders” for a single-person S-corp.

Are you saying that Wyoming doesn't have those requirements?

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

#116

Post by scottlilly »

rdl wrote: post #85
Svip wrote: post #77

Earlier quoted context omitted.

> 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.

I'm also not a lawyer or CPA, but I believe if a US person is a partial owner in a foreign corporation, the company is required to do their accounting by GAAP standards. So, if the company is in a country that follows IFRS standards, it would have to do their books twice.

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

#117

Post by Dracophoenix »

moneywoes wrote: post #106
bonestamp2 wrote: post #64

Earlier quoted context omitted.

On this note, if you're forming a company in the US and some of the owners/founders are not American, be sure to get an accountant and lawyer in the US to confirm your compliance with US foreign ownership laws.

What if you're located outside of the US but a US citizen?

Then you're in for a treat: Look up FATCA. If you have intellectual property involved in low-tax jurisdictions, you'll also want to look up GILTI.

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

#118

Post by Archelaos »

ageitgey wrote: post #37
SkyAndSand wrote: post #15

Earlier quoted context omitted.

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.

In my experience, things aren't that simple. For example, if you start a company in Country A but you are the main decision maker and live in Country B, then Country B may try to claim primary taxation of the company based on the fact that they consider the company being 'effectively run' from inside their borders despite your incorporation. And you aren't going to read about this kind of stuff on forums because it i…

> If you don't want to do that, the best/simplest situation is almost certainly incorporating in the place where the founders actually live permanently.

In general, I strongly agree.

In the particular case, however, there could be aspects that speak against it. Planing to have employees from another country might be such an aspect. If your company resides in country A and wants to employ someone from a country B, there are typically three options, but what is actually possible and which rules apply depents on the actual regulation in both countries: a) The easiest is as a contractor. But this might not be legal, if the work-relation has the characteristics of an employment. b) The person from country B gets an employment contract of the company in country A, but is despatched to country B. This often requires that the person has a work visa for country A (unless inside the EU for EU citizens). c) The company establishes a subsidiary company in country B that employs the person.

The first thing I would do is seeking for advise from your local chambers of commerce and then from the foreign chambers of commerce of the countries you are planning to employ people from.

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

#119

Post by gumby »

TedDoesntTalk wrote: post #110
lmeyerov wrote: post #67

Earlier quoted context omitted.

Such fees are basically nothing for a company that makes money High % taxes are where things get way dicier, e.g., some US states have high capital gains / transaction taxes while others are basically 0, which vastly changes how good exits are for employees "Penny wise, pound foolish" => optimize for low opex overhead on growth. Another example: $1K to setup a new state registration for an employee sucks, but is fine…

The annual filing fees and documents required by Delaware is arcane. Things like “annual meeting of the shareholders” for a single-person S-corp.

I can’t agree they are arcane. Back when the tax form was filed on paper it was a postcard-sized form: calculate one way on one side, the other way on the other side, and pay the lower amount.

And the point is that once you are established the laws are well known and understood by corporate lawyers (in other words the opposite of arcane, at least for lawyers) and so will be easier to deal with for all parties.

If you’re starting a small business just incorporate in the state you live in. If you’re starting a startup, don’t go for a false economy.

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

#120

Post by lthornberry »

glenngillen wrote: post #107
SkyAndSand wrote: post #36

Earlier quoted context omitted.

I am indeed another European and I do know about the issues with being a "US person". Many banks and brokers will simply immediately close your existing account or not allow you to open one. However, are you sure that simply by owning a US company you become a US person? Because according to my understanding if you don't live in the US (and don't spend more than 4 months / year there) you wouldn't actually be tax res…

Wow you’re getting some bad takes here. Having a phone number does not make you a US Person. Having a bank account there does not make you a US Person. I can only assume people are confusing this with the domiciled test that can exist in other tax jurisdictions. It’s mostly the same criteria as the usual tax resident status (so all citizens + those with work visas + if you’re in the country for 183 days). HSBC had th…

The issue isn't just whether you actually are a US Person; it's whether banks, etc., believe that you're not. Risk-averse institutions may just avoid doing business with anyone who seems like they might be, and can use whatever proxies they like to decide who they don't want to transact with.
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