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Why you might not want to incorporate in the USA

thenitai.com

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

#91

Post by beagle3 »

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.

Huge, "single culture" market (e.g. speaking single language) with a mostly familiar language and culture (thanks to Hollywood, and the fact that the US and the UK are responsible for the most recent technology revolution).

Capital.

And, everyone is used to doing business with the US, so if you want to grow your business internationally, that's a better base than most.

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

#92

Post by beagle3 »

nitai wrote: post #67
yardie wrote: post #3

* You could have saved yourself a load of headache and incorporate in Delaware. * If you don't have a physical office in each state you don't have a presence there. You shouldn't have needed to pay sales tax. Amazon only pays taxes in states they have a physical presence (warehouse, office, callcenter).

We got a professional CPA and lawyers on this. In the US it is such that when you hire someone (remote work) and he lives in, e.g. Philadelphia, you have to "incorporate" in that state. This is not the case in every state, but in some.

This is a difference in culture between Europe and the US: Most US employers won't notice that, because if they employ people across the US and not in an office, they'd hire than as contractors rather than as employees. In Europe, this form of contracting is much less prevalent.

I'm not sure what the cause and what is the result here, but it explains why Americans don't usually see this problem.

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

#93

Post by josefresco »

dijit wrote: post #75
josefresco wrote: post #64

Earlier quoted context omitted.

Care to fill us in with details to go along with your snark? Which part of 3rd world America did you visit? Anecdotally I enjoy decently fast broadband and mobile data coverage.

I went to NYC/Philly/NJ last summer.. T-Mobile barely exists out of the city itself, and yeah, speeds are abysmal. $50 for a sim card too... Anecdotally I went to the Swedish countryside in january; where I got 16Mb/s over 3g. (and it was free because: EU roaming is free on my carrier)

To be fair, you're talking about a distant 4th place provider that most in the US understand will not work great outside of major population areas. I would understand if you had issues with one of the big two (VZ/ATT). Also to be fair, Sweden is about the size of California.

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

#94

Post by randallsquared »

mjolk wrote: post #66
alexeisadeski3 wrote: post #41

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…

>"than nice nations like Denmark." Qualify what you mean by "nice."

On the next line, he did: "the most free market oriented non-postage-stamp nation on earth".

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

#95

Post by dcc1 »

merrua wrote: post #86
dcc1 wrote: post #48

Earlier quoted context omitted.

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…

Ireland doesnt have sales price, do you mean VAT? Edit. Sorry you have it on brackets on the next line.

Yes sorry VAT (i called it sales tax for US readers to relate)

We have a lowish corporation tax of 12.5% yes paid on company profits, but everything else is very high!

For example out of a ~€39000 salary last year after all taxes i was left with €25000, things get rapidly worse from there if you want to move money from your company to yourself, people can check http://www.deloitte.ie/tc/ for ideas of what income taxes people pay here

As a director one could take a company loan (illegal above certain % but dont think anyone checks) but this would be liable to witholding tax of about 20%

Capital gains is 33% here.

And of course VAT of 23%..

tl.dr: the taxation structure here works great for large corporations who can hire expensive accountants to launder literally billions thru' Ireland to warmer climes BUT for anyone running a normal small business, expect to hand over 20-40% of your earnings

and anything left after you pay income taxes for example, is heavily taxed with loads of stealth taxes (tv license, house tax, soon water tax etc etc) and of course 23% on anything you buy (essentials like food aside, some of these have lower VAT tax rate)

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

#97

Post by levosmetalo »

randallsquared wrote: post #94
mjolk wrote: post #66

Earlier quoted context omitted.

>"than nice nations like Denmark." Qualify what you mean by "nice."

On the next line, he did: "the most free market oriented non-postage-stamp nation on earth".

What is a postage-stamp nation then?

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

#98

Post by merrua »

dcc1 wrote: post #95
merrua wrote: post #86

Earlier quoted context omitted.

Ireland doesnt have sales price, do you mean VAT? Edit. Sorry you have it on brackets on the next line.

Yes sorry VAT (i called it sales tax for US readers to relate) We have a lowish corporation tax of 12.5% yes paid on company profits, but everything else is very high! For example out of a ~€39000 salary last year after all taxes i was left with €25000, things get rapidly worse from there if you want to move money from your company to yourself, people can check http://www.deloitte.ie/tc/ for ideas of what income taxe…

Did you find it difficult to get Incorporated as well? or is was that fast, just everything afterwards tedious and slow? Did you found in Ireland?

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

#99

Post by mattlutze »

nitai wrote: post #76
mjolk wrote: post #18

> All of a sudden, we were forced to figure out, how much we actually sold in each of those states, where we hired people Not to be offensive, but differences in state rules should have been expected, given the name of the country. How hard do you think it would be to get a random sample of 50 people to decide on a movie? Now swap people with territories and movie with governance. This blog post is just ranting and w…

Filling out "a form" is not the issue outlined. Filling in "hundred of forms', taking up to 6 months and not being able to pay employees is. Furthermore, Razuna is successful. All we wanted is to continue on US soil and expanding by hiring US people and thus paying US taxes = bringing money to the US. That's what the blog post is all about. It has been written to show what it takes to incorporate for a European compa…

If I may, it sounds like the hurdles encountered were:

- Paperwork and fees/taxes in each state an employee works in. - Securing a work visa to enter and work in the US.

But, it sounds like, if we were to swap places and Nitai lived in the US, trying to start a business in Europe, he'd be faced with

- Paperwork and fees/taxes paid to each country his employees worked. - Securing a work visa to enter and work in the EU.

Depending on the country American Nitai wanted to live/work in, the visa may be easier/harder than the US visa, I'd imagine. But I'm not sure that the kinds of difficulties would be much different.

You're putting up a lot of strawmen here.

Example: "He will pay his taxes in Denmark, Germany, Switzerland or wherever he freely chooses to live. In Europe, you can live in whichever country you like. Most countries here seem happy to receive taxes."

In the US, you can freely live in whichever state you want. It's rhetorically dishonest to compare the United States to a single country in the EU.

--

I'm sorry that your experience was a poor one. Indeed, US laws are different, and if you went into the experience expecting it not to be different, that would certainly have been a shock. I make no claim our system is better than Denmark's (you shouldn't imply all of the EU is the same as Denmark, by the way). But it's a disingenuous platform to decry the US because you received inadequate counsel on setting up a US business or failed in your due diligence...

I'm sure, however, the pro-European camp of your readership will feel quite satisfied with the tone and subject matter of your post.

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

#100

Post by mjolk »

randallsquared wrote: post #94
mjolk wrote: post #66

Earlier quoted context omitted.

>"than nice nations like Denmark." Qualify what you mean by "nice."

On the next line, he did: "the most free market oriented non-postage-stamp nation on earth".

That doesn't explain what he meant by 'nice,' that's just another statement.
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