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Bitcoin accidentally solved my startup's international banking problem

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Re: Bitcoin accidentally solved my startup's international banking problem

#11

Post by latj »

HalfPriceDigi wrote: post #9
drakaal wrote: post #8

And it creates several entirely new issues. Bitcoin for physical goods is usually safe as you can always claim it is a barter, but Bitcoin for online transactions if you are based in the US could turn in to a Mt. Gox like issues. If you are small, your risk can be small. But if you are looking to be the next big thing or raise capital this would be a "risk" not a "solution" in most VCs eyes.

I'm not sure that this would be a problem though because the scenario would be for an American citizen that is forming a company in the EU. So the US bitcoin laws should be bypassed and you'd just be dealing with EU laws regarding Bitcoin, since your company is based in the EU.

I'm surprised there is no law prohibiting people from telecommuting from U.S. to bypass U.S. laws.

Re: Bitcoin accidentally solved my startup's international banking problem

#12

Post by HalfPriceDigi »

latj wrote: post #11
HalfPriceDigi wrote: post #9

Earlier quoted context omitted.

I'm not sure that this would be a problem though because the scenario would be for an American citizen that is forming a company in the EU. So the US bitcoin laws should be bypassed and you'd just be dealing with EU laws regarding Bitcoin, since your company is based in the EU.

I'm surprised there is no law prohibiting people from telecommuting from U.S. to bypass U.S. laws.

You have to keep in mind that a company is its own entity and since my startup was formed in the UK, it is a UK company that is governed by UK laws. The UK has no problem with non-resident company directors, but setting up a bank account for a company with a non-resident director is another story.

Re: Bitcoin accidentally solved my startup's international banking problem

#13

Post by csomar »

How is it legal for someone based in the US to setup a UK company to run his business? Isn't this a recipe to get the IRS to investigate this as a tax evasion scheme?

I mean if it's possible, then every online business should incorporate in HongKong and avoid Taxes, VAT and several other complications that the IRS put.

Re: Bitcoin accidentally solved my startup's international banking problem

#14

Post by dobbsbob »

Rietumu Bank in Latvia will take any corporation anywhere except blacklisted states. In fact you can apply online you don't even have to visit in person. This guy could've also used Okpay, or dropped in a payment gateway like Global Payments or Stripe and had them pay out to his Okpay bank wire SWIFT code.

For a while as an experiment, I decided to see how easy it would be to break the Argentina ban on foreign exchange or money leaving the country. I simply signed up to a bunch of services like Inpay (Agentine soft bank transfers), Rapipago and DineiroMail and accepted payments in exchange for Bitcoins. I had all these payment gateways just dump into an Okpay account and then traded it on IRC. Worked flawlessly, though high fees. Still were cheaper fees than what it costs on the black market there to move money.

I also have a decoy software store that I sell to a circle of friends there Bitcoin for Argencard. I wouldn't do this for the general public of course that's risking fraud.

Poland, Belarus, Moldova, Italy, any of these countries walk into a bank with corporate docs and open an account in an hour or so. Bitcoins are of course, better suited for this guy's business of reselling software but he barely tried to get around silly bank laws in the UK.

Edit: To get money back to yourself cheaply from the Latvian bank after your payment gateway dumps funds into it (because SWIFT can be expensive with correspondent banks robbing you a percentage in fees), buy Bitcoins with SEPA from Bitstamp or another EU exchange or p2p trade. Then cash the bitcoins out locally.

Re: Bitcoin accidentally solved my startup's international banking problem

#15

Post by dllthomas »

csomar wrote: post #13

How is it legal for someone based in the US to setup a UK company to run his business? Isn't this a recipe to get the IRS to investigate this as a tax evasion scheme? I mean if it's possible, then every online business should incorporate in HongKong and avoid Taxes, VAT and several other complications that the IRS put.

He unquestionably still owes taxes on that money.

Re: Bitcoin accidentally solved my startup's international banking problem

#16

Post by dobbsbob »

csomar wrote: post #13

How is it legal for someone based in the US to setup a UK company to run his business? Isn't this a recipe to get the IRS to investigate this as a tax evasion scheme? I mean if it's possible, then every online business should incorporate in HongKong and avoid Taxes, VAT and several other complications that the IRS put.

It's legal as long as you report any income you make from it personally. There's nothing stopping you from incorporating in the Seychelles, and getting a bank account in Latvia, Belize, or Panama/St Vincent.

Just so long as you report foreign income paid out to yourself. The foreign corporation doesn't have to report anything (this might have changed, i'm not a lawyer). That's why you see all those shady collector coin ads on latenight TV and they are always based out of Liberia.

Re: Bitcoin accidentally solved my startup's international banking problem

#17

Post by philiphodgen »

HalfPriceDigi wrote: post #12
latj wrote: post #11

Earlier quoted context omitted.

I'm surprised there is no law prohibiting people from telecommuting from U.S. to bypass U.S. laws.

You have to keep in mind that a company is its own entity and since my startup was formed in the UK, it is a UK company that is governed by UK laws. The UK has no problem with non-resident company directors, but setting up a bank account for a company with a non-resident director is another story.

@HalfPriceDigi, don't forget to prepare and file Form 5471 for your UK company. Screw that up and it is an automatic $10,000 penalty.

(Disclosure: international tax lawyer; have fought this battle with the IRS before).

And yes. The banking problem is the hard problem to solve.

In both directions. U.S. banks can be giant poopy-heads. Bank of America just closed the account of a foreign client of mine who had banked with them for 33 (!) years. "We don't have to give you a reason, and we are sending you a check for your money." The second such client to experience this. Both are moving to Citibank, for what that's worth to you.

Re: Bitcoin accidentally solved my startup's international banking problem

#18

Post by conformal »

dobbsbob wrote: post #14

Rietumu Bank in Latvia will take any corporation anywhere except blacklisted states. In fact you can apply online you don't even have to visit in person. This guy could've also used Okpay, or dropped in a payment gateway like Global Payments or Stripe and had them pay out to his Okpay bank wire SWIFT code. For a while as an experiment, I decided to see how easy it would be to break the Argentina ban on foreign exchan…

you're quite the payment wizard, dobbsbob.

can you comment on the kind of fees you ended up generating when you were experimenting in Argentina? i expect that fees would be different depending on the direction you went from ARS.

a bank account in an hour? opening a bitcoin business account in the US takes easily 1.5 hours, if not twice that.

Re: Bitcoin accidentally solved my startup's international banking problem

#19

Post by conformal »

zorked wrote: post #10
conformal wrote: post #4

your scenario sounds like an ideal use case for a service we recently released, Coinvoice ( https://coinvoice.com/ ). Coinvoice allows you to invoice in USD and receive Bitcoin (BTC) without forcing your customers to use BTC. i have myself had a number of issues with banks in the past and can speak to the irritation it can cause when you're trying to do business. Bitcoin is a great way to get around banks that are un…

That's very nice, congratulations. Isn't there a way to work around the risk of chargebacks? Requiring an "insurance" deposit and passing charges on to your customers, or holding payment for some amount of time?

i've run a few other businesses in the past that had some serious credit card and paypal fraud problems. to give you an idea of how bad it can get, i have been charged back USD 30K in credit card charges by a single customer who was running an extremely creative fraud system. the secret service ending up getting him, which was vindicating, but you can't get blood from a stone...

i'll have another think about it, but i expect that accepting credit cards is not going to happen. additionally, the fees would have to be pretty hefty for running such a payment gateway since it would (our fee) + (credit card processing fees).

Re: Bitcoin accidentally solved my startup's international banking problem

#20

Post by HalfPriceDigi »

dobbsbob wrote: post #14

Rietumu Bank in Latvia will take any corporation anywhere except blacklisted states. In fact you can apply online you don't even have to visit in person. This guy could've also used Okpay, or dropped in a payment gateway like Global Payments or Stripe and had them pay out to his Okpay bank wire SWIFT code. For a while as an experiment, I decided to see how easy it would be to break the Argentina ban on foreign exchan…

Hey dobbsbob, thanks for your comment! Great info! I did try getting a Latvian bank account but even their banks seem to have clamped down on opening accounts for non-EU residents due to money laundering laws - at least in my experience.

As for payment gateways, I wanted to stick to well-known gateways like PayPal and Skrill that consumers would already have accounts with.

I'm sure that walking into a bank in Europe probably would have quickly resulted in the opening of an account, but getting to Europe posed a problem for me as I'm based in the US and didn't have the funds to make the trip. Thus, Bitcoin!

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