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Ask HN: What is the best jurisdiction for internationally distributed teams?

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Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#151

Post by withinboredom »

SkyAndSand wrote: post #127
biztos wrote: post #75

Earlier quoted context omitted.

Commerzbank terminated my contract after 14 years as a loyal customer (and plenty of money in the account) — they refused to say why, but my best guess is they were culling Americans. I think getting a German bank to open a business account for a U.S. startup would be a nightmare at best.

Totally agree, but why would you need a corporate bank account in Germany? You could simply use the US bank accounts?

You usually need a local bank account. For example, in the NL I need an NL bank account for taxation purposes for my NL business.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#152

Post by cascom »

iqkznnft wrote: post #135

Since we're on the subject... Can anyone just incorporate a company in the United States? Even if they don't have permit to work? Separate question, can they be employed by the company they incorporated, remotely, and use the company to bill American customers?

Yes they can

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#153

Post by cascom »

giaour wrote: post #12

With a fully remote setup like you describe, what are the mechanics of hiring a foreign team member? Do you need a subsidiary or some legal entity in the foreign country in order to pay employment taxes? If they're direct employees of the US entity, what's their legal status in the US? Can you avoid all these questions by using foreign contractors rather than hiring foreign employees?

The short version is that the employee’s country of residence will dictate on all of these variables rather than the country of the employer. I don’t think a foreign employee of a U.S. company has any US status

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#154

Post by cascom »

thrill wrote: post #47

There's a reason the Cayman Islands have two-thirds of the world's hedge funds incorporated there. It has a long and stable financial history and has stated that any structural financial changes will be grandfathered where legally possible. That sort of stability is worth the $100/month it takes to keep an international business there.

But to be fair, none of those hedge fund’s employees are employed by the caymans entity, and the only reason they are not in the US (at least for US hedge funds) is to accept non-taxable us investors and foreign investors, U.S. taxable investors typically invest through a Delaware LP.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#155

Post by Scoundreller »

sdrinf wrote: post #122
PragmaticPulp wrote: post #91

Earlier quoted context omitted.

> Most US companies will hire remote "inside the USA" but not outside the USA due to potential foreign tax and legal liabilities. That’s not a unique feature of the USA. It doesn’t matter what country you’re incorporated in. You’re still obligated to follow the local laws and tax codes of any foreign country you hire in. Technically some companies (shady crypto plays especially) will try to incorporate in a weird loc…

Given the number of founders I've seen running into this problem, I think it's worth calling it explicitely out: the problem with US incorporation as a foreign person isn't just your local tax code, but: US LLCs/partnerships (a very common structure for incorporating) require witholding (ie taxes) for foreign holders 30% (which is one of the highest rates) (keywords for googling: Federal Withholding Tax for Foreign N…

30% if there’s no tax treaty. Treaties trump laws (if ratified). So you’ll have to read through each treaty with your employees’ country to see what needs to be withheld.

So for OP, for operational simplificity, a domicile with the least number of treaties would be best (but possibly horrendous for tax efficiency).

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#156

Post by cascom »

jpgvm wrote: post #23

If you want VCs then it's always the US and should always be a Delaware corp. For non-VC funded companies HK is great, allows for tax minimization, minimal headaches, access to international banks and potential access to Chinese market if that is important for your business.

HK is over unfortunately

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#157

Post by __d »

hodgesrm wrote: post #55
SkyAndSand wrote: post #32

Earlier quoted context omitted.

Thanks for the feedback. Did you generally encounter any bigger issues with this setup or would you do it again for the next company? Also, where in the US did you incorporate? Delaware?

Delaware, though we originally incorporated in the UK and then flipped as a condition of receiving investment. (Thanks Accel people!) The flip was the most complicated thing we've done--accounting, lawyers on both sides to avoid the dreaded taxable event, etc. I would absolutely do the same in future. The contract to individual or individual's company is a standard model for remote companies like us that work on open…

Second this: I worked for years as a contractor for US-based companies from US, DE, and AU. No issues tax-wise -- it's just a service agreement between the two companies/legal entities.

Similarly, I often had just a Google (email, calendar, docs, etc) and GitHub account. Legal agreements were like 3 pages total (mostly an NDA).

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#158

Post by winter_blue »

troydavis wrote: post #6

Based on your description, your goals are predictability and low or outsource-able overhead. For those goals, the US is the clear choice. By far the largest pool of investors and employees are comfortable with US entities as counterparties. Plenty of companies will incorporate, prepare tax returns, and handle other compliance items (unemployment insurance) for relatively small fees. As far as states, if you don't car…

Note: Delaware charges LLCs an annual fee of $300. Just something to keep in mind. Wyoming charges $60/year, and Nevada $350/year.

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#159

Post by SkyAndSand »

withinboredom wrote: post #151
SkyAndSand wrote: post #127

Earlier quoted context omitted.

Totally agree, but why would you need a corporate bank account in Germany? You could simply use the US bank accounts?

You usually need a local bank account. For example, in the NL I need an NL bank account for taxation purposes for my NL business.

I understand that. But why would a US company need a NL bank account?

Re: Ask HN: What is the best jurisdiction for internationally distributed teams?

#160

Post by jpgvm »

cascom wrote: post #156
jpgvm wrote: post #23

If you want VCs then it's always the US and should always be a Delaware corp. For non-VC funded companies HK is great, allows for tax minimization, minimal headaches, access to international banks and potential access to Chinese market if that is important for your business.

HK is over unfortunately

Reports of HKs death are greatly exaggerated.

What you see in the media is one thing, the reality on the ground (for business at least) is very much the same as it always has been.

If anything HK is even more like Singapore than it was in the past.

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