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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

#141

Post by ari_ »

nitai wrote: post #79
ari_ wrote: post #37

A lot of this could have been solved by (pick a few): 1. forming a 1099 relationship with your devs if they weren't working full time. 2.Using a Personal Employment Organization. 3. Doing your research before blindly incorporating in Texas. We could debate for ages the merits of the state and federal system, but if you were going down this whole road of opening a company in another country and hiring there, then it w…

Who said we didn't get professional lawyers and CPA's?

if you did then please name them so I know not to use them. Hiring employees in other states should be bread and butter for any tax accountant working with businesses.

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

#142

Post by sergiosgc »

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?

From the worker perspective, he'd have to file his taxes in Portugal. He'd be a resident, because he is in the country for more than 9 months every year. Strangely, however, nothing prevents him being a worker for an entity outside the country (free movement of people, goods and services in the EU market mandate on barriers here).

You'd be in a strange split-brain situation, requiring legal advice. I imagine you could file income taxes in Denmark, and these would be deducted from the worker's Portuguese due taxes under the double taxation prevention agreements.

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

#143

Post by STRML »

brador wrote: post #109
jzwinck wrote: post #96

Earlier quoted context omitted.

It depends on what kind of business, and what languages are understood by the people involved.

How about token startup: all English speakers, cloud based businesses, sass, no inventory, both business owners US citizens?

There are quite a few of those here in Hong Kong - the corporate and personal tax rates are quite friendly, and capital gains/dividends are not taxed at all. There are quite a few ways to keep most of your money here, and the regulations are simple.

That said, while the technical community is growing, it is still very small. Hiring can be quite difficult and you have to prove to the government that you worked hard to find a local before they will let you hire an expat. But it can be done.

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

#144

Post by philiphodgen »

STRML wrote: post #137
philiphodgen wrote: post #134

I am an international tax lawyer and this stuff is my day job. Consider this comment an AMA. For smaller companies, the bureaucratic cost of international tax systems is insane. For US citizens abroad ... I will just say that my biggest area of growth is helping people shed their US citizenship and tax paperwork/penalties is the number 1 reason. Anyway. If you are in a position like The One and Only Netai -- or don't…

It's something I've considered. As a now resident of Hong Kong, I was surprised - and delighted - with how incredibly easy it was to handle my taxes. Front-to-back, I could do the whole thing, including payment, in less than an hour and understand the whole system. Unfortunately, it is nowhere near so simple in the US, and they have no regard for expats. The US treats its expats worse than any other country in the wo…

I think it is Clay Shirky who said something to the effect that bureaucracies have every incentive to not solve problems. Otherwise the reason for the bureaucrats' existence would cease. We won't see solutions from the US government. Ever.

Yes the tax stuff is painful but as in your case there are reasons to keep the citizenship.

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

#145

Post by workhere-io »

levosmetalo wrote: post #97
randallsquared wrote: post #94

Earlier quoted context omitted.

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

What is a postage-stamp nation then?

Tiny nations such as Monaco, Liechtenstein, The Vatican, San Marino, Andorra, etc.

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

#146

Post by slowdown »

Call me stupid, but the only reason why I incorporated an LLC in the States is because I wanted get access to the Stripe API for production (yeah, it's a huge compliment to the Stripe guys ;)

The payment gateways in my country are shit..Also, the US account is only used for the payment gateway, all the IP of my software is owned by the company in my home country. You know, just so someone doesn't sue me for rounded corners and having anchor links on my webpage, stuff like that.

So far so good, I just report EFI (Effectively connected income) to the IRS, which means only the businesses that I do with USA, all signups from other countries aren't taxed by the IRS believe.

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

#147

Post by workhere-io »

Dewie wrote: post #132
digitalengineer wrote: post #12

Earlier quoted context omitted.

America is big and as different as Europe. Even though most Americans speak English, it's not a uniform country as us Europeans think. But don't confuse the people with the state. They're not the same. The Americans I met were generally quite nice and willing to help an (obvious) tourist out. Bureaucrats? They thrive in chaos.

> and as different as Europe. How? I just have a hard time imagining how a place with dozens of languages and cultures (I think that cultures with very different languages are likely to be very different from each other) and all of that can be less varied than a place like the US.

Exactly. The difference between NYC and a rural Mississippian town may seem big, but it's nothing compared to the difference between, say, Copenhagen and a rural Spanish town.

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

#148

Post by nitai »

STRML wrote: post #139
nitai wrote: post #101

Earlier quoted context omitted.

Additionally, the US is one of the few countries that punish their citizens with US tax even when they don't live in the US anymore...

It is, effectively, the only country in the world that does this. It's shameful. http://hodgen.com/does-the-united-states-stand-alone/

Wow... I really like the US, but these draconian laws make it difficult to justify moving there. Of course, if you grow up like this and don't know better...

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

#149

Post by nitai »

slowdown wrote: post #146

Call me stupid, but the only reason why I incorporated an LLC in the States is because I wanted get access to the Stripe API for production (yeah, it's a huge compliment to the Stripe guys ;) The payment gateways in my country are shit..Also, the US account is only used for the payment gateway, all the IP of my software is owned by the company in my home country. You know, just so someone doesn't sue me for rounded c…

I hear you. The payment gateways in DK simply suck. However, Braintree and Stripe are now all over Europe too.

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

#150

Post by dublinben »

brador wrote: post #109
jzwinck wrote: post #96

Earlier quoted context omitted.

It depends on what kind of business, and what languages are understood by the people involved.

How about token startup: all English speakers, cloud based businesses, sass, no inventory, both business owners US citizens?

I'm no expert, but Delaware is likely going to be a strong contender. It's the most popular place to incorporate in the US for a number of reasons.
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