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Why you might not want to incorporate in the USA

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Re: Why you might not want to incorporate in the USA

#41

Post by alexeisadeski3 »

Whilst I do not wish the hell that is American business regulation on anyone, I am at least happy to see some Europeans realizing that America does in fact have more onerous regulation, all things considered, than nice nations like Denmark.

Scott Sumner of Bentley University, in Boston, has written on this topic quite a bit. Sumner, in fact, considers Denmark the most free market oriented non-postage-stamp nation on earth. A sample:

On taxes: http://www.themoneyillusion.com/?p=24759

On regulation: http://www.themoneyillusion.com/?p=21601

On inequality: http://www.themoneyillusion.com/?p=22400

Re: Why you might not want to incorporate in the USA

#44

Post by Spearchucker »

davidw wrote: post #32
clarkevans wrote: post #28

Earlier quoted context omitted.

Hiring an employee in another state may create a nexus in that state, and this may require you to file income tax in that state. For example, if you incorporate in Delaware, and then hire someone for >$50k in Texas, you may have to file company income taxes in Texas. Not that Texas income attributed to your company (or partners) will be much, but, computing and filing is best done by hiring an accountant.

I'm not sure about EU law - but if you have a company in Denmark, and want to hire someone who works in Portugal as a permanent employee, and not a contractor, what do you need to do?

Not sure about Portugal but suspect it's not much different than other European countries. When I did a freelance job for Nokia in Berlin I effectively worked for a Swiss company, which sent me off to Berlin. I registered myself in Switzerland, got a social security number there, and paid my income tax in Germany. As far as I understand it, Nokia paid the Swiss company, who paid their tax in Switzerland. Much as you'd expect - you (be it an organization or an individual) pay tax in the country in which you're situated.

Re: Why you might not want to incorporate in the USA

#45

Post by davidw »

Spearchucker wrote: post #44
davidw wrote: post #32

Earlier quoted context omitted.

I'm not sure about EU law - but if you have a company in Denmark, and want to hire someone who works in Portugal as a permanent employee, and not a contractor, what do you need to do?

Not sure about Portugal but suspect it's not much different than other European countries. When I did a freelance job for Nokia in Berlin I effectively worked for a Swiss company, which sent me off to Berlin. I registered myself in Switzerland, got a social security number there, and paid my income tax in Germany. As far as I understand it, Nokia paid the Swiss company, who paid their tax in Switzerland. Much as you'…

What you've described is kind of complex. I'm asking about where someone lives and works as a permanent employee (and not a contractor!) in Portugal or Germany or whatever, for a company that is in Denmark.

Re: Why you might not want to incorporate in the USA

#46

Post by bprieto »

davidw wrote: post #32
clarkevans wrote: post #28

Earlier quoted context omitted.

Hiring an employee in another state may create a nexus in that state, and this may require you to file income tax in that state. For example, if you incorporate in Delaware, and then hire someone for >$50k in Texas, you may have to file company income taxes in Texas. Not that Texas income attributed to your company (or partners) will be much, but, computing and filing is best done by hiring an accountant.

I'm not sure about EU law - but if you have a company in Denmark, and want to hire someone who works in Portugal as a permanent employee, and not a contractor, what do you need to do?

You must hire that employee according to the laws of the country in wich he/she lives. So if that person lives in Portugal, you should make a contract according to portuguese laws, and you must pay for social security in Portugal.

Re: Why you might not want to incorporate in the USA

#47

Post by davidw »

tomelders wrote: post #42
davidw wrote: post #36

It's indubitable that the nordic countries are well-run places. Occasionally though, the amount of "smug" they export is a bit on the high side.

Is being frustrated and correct the same as being smug?

Smug doesn't mean wrong, it means being a bit loud proud about being right.

Re: Why you might not want to incorporate in the USA

#48

Post by dcc1 »

CalRobert wrote: post #39

I really don't understand this fetishization of the US for business. If you want to be sued into utter oblivion and live on the streets with a nonexistent social safety net I guess it's all right. I'm in Ireland and if you want to start a real business (not some rinkydink app that mysteriously needs €30 million in funding so you can fail more spectacularly) the climate seems quite good.

As someone who has been in business here since 2007, i would stop you right there!

We have our share of a bureaucracy (example: took 6 months to get reply from Revenue as to what VAT to pay or not on sales of hosting packages, 23% sales tax (VAT) on customers from EU-28 was the answer eventually)

and you quickly realise there are 3 types of companies here:

1. Large corporations setting up shops to launder money onto somewhere warmer in Caribbean, these often dont hire many people or pay much in any tax despite moving billions (example Apple in Cork)

2. Small indigenous companies who dont receive much support, run by small families who never really grow to become large companies EU or worldwide, ask anyone outside of Ireland to name an Irish company beside Ryanair! And no Guinness are UK company

3. Zombie companies still clinging on from the haydays of the last boom, supported by taxpayers bailing out the banks, surviving thanks to the inbred gombeenism that is still prevailent despite the largest recession in any of the developed countries since 2007, see this great lecture https://www.youtube.com/watch?v=8LCofepdUzE

Re: Why you might not want to incorporate in the USA

#49

Post by ronaldx »

davidw wrote: post #32
clarkevans wrote: post #28

Earlier quoted context omitted.

Hiring an employee in another state may create a nexus in that state, and this may require you to file income tax in that state. For example, if you incorporate in Delaware, and then hire someone for >$50k in Texas, you may have to file company income taxes in Texas. Not that Texas income attributed to your company (or partners) will be much, but, computing and filing is best done by hiring an accountant.

I'm not sure about EU law - but if you have a company in Denmark, and want to hire someone who works in Portugal as a permanent employee, and not a contractor, what do you need to do?

You would need further advice, but I believe you would be subject to Portuguese employment law.

At least, you would pay Portuguese taxes for that employee and you would likely need to register with Portugal as an employer.

UK advice: http://www.hmrc.gov.uk/nic/work/new-rules.htm#5

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