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EU–INC – A new pan-European legal entity

eu-inc.org

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Re: EU–INC – A new pan-European legal entity

#751

Post by roryirvine »

burnt-resistor wrote: post #559

Not the EU, but the UK: About 2012, it was incredibly difficult to start a limited liability partnership/corporation in the UK, roughly physically-located around Chelsea to Canary Wharf. One of the big hurdles was acquiring specific record-keeping instruments that weren't sold in specialty legal stationery shops, but only by some dude literally selling them out of his boot (trunk in America). Maybe the other partners…

I think your partners were mistaken - the requirement for having a company seal and paper company register / minute book went away in both England & Wales and Scotland with the Companies Act 1985, and company formation has been done online UK-wide since the Companies Act 2006.

I'd guess the guy operating from his car was an artisan engraver who made the seal for you. They're easy to buy online too (I got one around 25 years ago), but they're mostly a curiosity rather than a necessity. I doubt more than one in a hundred new Ltd or LLP companies will bother with one.

Re: EU–INC – A new pan-European legal entity

#752

Post by jmaker »

direwolf20 wrote: post #356
moritzwarhier wrote: post #271

Earlier quoted context omitted.

Companies are treated like persons legally and while I'm sure there is too much bureaucracy in many places, I'm also sure that there are important documents that should be required. For example to make sure that a company can be held responsible when it breaks the law. There are already enough loopholes to disconnect legal responsibility from profit-taking, and not every company is benign. Sure, if the documents cann…

> For example to make sure that a company can be held responsible when it breaks the law. This is the reason Germany hates small companies. Germany wants you to be a sole trader with no liability shield. Some people hack the system by registering a company in another EU state such as Lithuania.

Piercing the corporate veil is a very common practice across countries, both in civil and statutory cases as well as administrative cases. It’s a very fragile shell.

Re: EU–INC – A new pan-European legal entity

#753

Post by ptsneves »

adamcharnock wrote: post #653
Xylakant wrote: post #523

Earlier quoted context omitted.

Social security gets paid on wages. Revenue doesn’t play into it.

In Portugal (for example) is is mandatory for an Lda (limited company) to have an employee, and they must be paid minimum monthly amount. In practice this means a few hundred euros a month go to the government in taxes. Then on top of that is another hundred or so in accountancy fees.

As someone who had a company in Portugal I do not understand what you meant about requiring an employee to have limited liability company. You may be referring to the need for one of the owners needing to pay social security but it only needs to do so if it does not pay in any other form. It hurts but it is not unreasonable and may provide unemployment benefits.

The accountant requirement I confirm, but also true in Poland for example.

The really big offense is that one must pay taxes for the next year based on the previous tax payments. They give a small grace period but then it’s on. It was supposed to be an emergency measure but of course it was never removed. It is a free loan to the state.

You can open a single person business though and skip the accountant.

Re: EU–INC – A new pan-European legal entity

#754

Post by truekonrads »

academia_hack wrote: post #168

It's inordinately difficult and expensive to start an LLC or SA in some EU countries. It's even difficult and expensive to _stop_ an LLC and dissolve it. Huge amount of risk and cost on founders and a huge distraction from running a business. I think that EU-Inc _could_ be an improvement, but it needs to avoid the committee laundry list of ideas/requirements/form fields that plagues the EU startup ecosystem. My worry…

You can start a business in Estonia in 2-3 days and get e-residency there. Sample incorporation business (no affiliation): https://enty.io/en/incorporate-estonia

Go Estonia!

Re: EU–INC – A new pan-European legal entity

#755

Post by codingcodingboy »

belter wrote: post #674
codingcodingboy wrote: post #645

Earlier quoted context omitted.

Can you explain why?

Where should I start... :-) - They are optimized for Big funds, Holding structures and Multinationals If you are a bootstrapper, or small company or any early stage startup, the ecosystem works against you. - Setup costs are absurdly high if you include Notary around plus possibly Lawyer, Bank onboarding plus accounting you are looking at burning €10k to €20k easily before making a cent. - The scourge of the state Fo…

Wow thanks for the long reply, unfortunately many if not most of your points are common in all of Europe. I asked you to clarify because I am not only curious about the topic but I strongly believe that these issues should be talked about way more frequently and reach when possible the general population.

Most people are completely unaware of the risks and difficulties of running a company in our countries.

In Italy for example the tax agency operates on a model that is often no different from extortion and innocent people can suffer greatly because of it, I have seen it happen.

I am skeptical that EU Inc will solve all the main problems or even that it will become reality at all but let's see.

Re: EU–INC – A new pan-European legal entity

#756

Post by neximo64 »

bux93 wrote: post #718
neximo64 wrote: post #683

Earlier quoted context omitted.

This is very different. In a SE these are incorporated and sponsored by the member state. It is like each country making an equivalent copy of the same thing. The EU-INC is EU designated without a sponsor, which is not permissible under EU law other than for the EU institutions themselves. This is one of the red lines for the design of the EU legally speaking

An SE is incorporated under EU law, and it has a headoffice registered in a member state - and that registration can be moved to another member state. Like GDPR, the relevant law is an EU "regulation" and not a directive. Directives need to be implemented in local laws, regulations apply directly (local laws may fill in details as long as they don't contradict or restrict the regulation, except of course where the re…

This is the basic Maastricht treaty. You cannot make EU law in France without France creating it not as EU law, but as French law. A SE or EU-INC would have to exist within this construct.

The only exception to a legal entity are the EU entities themselves which are supranational.

This is what most people don't understand with the EU, that there is a very specific process to create law and limitations on what it can do. It isn't like the US and the EU isn't a country. I may appreciate you might be European but even within Europe the detail with it is where it matters.

Re: EU–INC – A new pan-European legal entity

#757

Post by rmoriz »

hwj wrote: post #740
rmoriz wrote: post #739

Earlier quoted context omitted.

short: no long: It depends. If you are a foreigner, e.g. no US resident, you are fully taxable with your US LLC profits in your country of residence, e.g. let's say Germany. There is no way to get a tax discount or any other simple magic hack. However, if your lifestyle allows, to become a digital nomad (not living in a single country for more than 183 days) in theory you may operate tax-free (only sales outside of U…

Thx. Am I taxable in my country of residence even when the money is kept on the LLC's bank account in the US? Let's say a small side hustle earns me $200/month. The money is kept on the LLC's bank account. Later on, when I visit the US, the LLC is paying for traveling and hotel. Would I still need to pay taxes in my country of residence? (Even though you probably aren't a lawyer, I'd still appreciate your thoughts on…

I'm not a tax advisor and most of my knowledge is about Germany, but if you have no physical business in the US, like office and proper residency (decision-making process), you have to tax in your own country. Tax evasion would be easy if that would not be the case. It's not only about profits but even the expenses need to be taxed/settled under e.g. German law.

So if your LLC collects $200/months and pays $100 for operations, you need to provide both positions to the German tax authorities, not just the $100 pro-forma profit.

They treat the LLC as "shell company" unless you have an office and can document that the business decisions are made there (because you are there a decent amount of time or have a hired manager and you just a shareholder).

US authorities have to report to the German authorities that you own an LLC, not the fiscal details, but the business facts.

If you are successful in your business, and your LLC is really making money, you can reduce your taxation duties in your current home country if you move abroad for half a year. If you don't stay longer than 182 days in one country, you are not taxable (except US citizens). This is also true if you move within the EU every couple of months. Of course this is not easy and comes with a lot of expenses and mental load (you MUST leave a country or you will have to tax everything their AND you have to document your stays carefully).

The LLC works great if you do that. The German GmbH does not. Hence starting an LLC can make sense if you plan to start this nomadic lifestyle. Owning a property (home) causes tax residency in Germany, so this is another story to take care of, if you are lucky enough to own something.

Re: EU–INC – A new pan-European legal entity

#758

Post by ThePowerOfFuet »

miki123211 wrote: post #369
ThePowerOfFuet wrote: post #268

Earlier quoted context omitted.

>That sounds like a really good use for AI. No, it is not a really good use for a word prediction engine.

In Europe, there are two parallel realities which coexist, have some influence over one another, but are ultimately somewhat separate. There's the real reality, and then there's the reality as it is perceived by the bureaucratic apparatus, the "upside down." It's important to realize that everything in the "upside down" must be consistent with the rest of that reality, but not necessarily with what actually happened…

In the European countries (yes, plural) in which I have lived, _most_ (admittedly not all) employees would decline such a request as abusive and illegal, and employers which insisted would be on the hook for damages were they to insist.

Re: EU–INC – A new pan-European legal entity

#759

Post by hwj »

rmoriz wrote: post #757
hwj wrote: post #740

Earlier quoted context omitted.

Thx. Am I taxable in my country of residence even when the money is kept on the LLC's bank account in the US? Let's say a small side hustle earns me $200/month. The money is kept on the LLC's bank account. Later on, when I visit the US, the LLC is paying for traveling and hotel. Would I still need to pay taxes in my country of residence? (Even though you probably aren't a lawyer, I'd still appreciate your thoughts on…

I'm not a tax advisor and most of my knowledge is about Germany, but if you have no physical business in the US, like office and proper residency (decision-making process), you have to tax in your own country. Tax evasion would be easy if that would not be the case. It's not only about profits but even the expenses need to be taxed/settled under e.g. German law. So if your LLC collects $200/months and pays $100 for o…

Thx a lot. Really appreciate you taking the time for such a thorough answer.
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