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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

#261

Post by workhere-io »

alexeisadeski3 wrote: post #240
workhere-io wrote: post #74

As the article states, Denmark, while having high taxes, is very business-friendly: Very little bureaucracy, almost zero corruption, English-speaking population, relatively cheap apartments ($1,850 per month for a newly constructed two-bedroom apartment in central Copenhagen) and very low expenses of health care and firing people. Also, while wages are generally very high, they're not high compared to Silicon Valley…

Denmark has high taxes for the poor and middle class, relative to the US, but taxes on the rich aren't really much higher.

Denmark has high taxes for the poor and middle class

Ironically, there's virtually no place better to be "poor" than in Denmark, because while poor people pay taxes, too, wages (and welfare) are so high that they end up living a better life than in other countries.

Taxes on the rich are a different story, though, because while the tax rates on the rich may compare to those in the US, it seems to me (and I might be wrong here) that, through tax deductions and various other things, rich Americans often end up paying relatively low taxes. And that would be hard to accomplish in Denmark.

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

#262

Post by alexeisadeski3 »

workhere-io wrote: post #261
alexeisadeski3 wrote: post #240

Earlier quoted context omitted.

Denmark has high taxes for the poor and middle class, relative to the US, but taxes on the rich aren't really much higher.

Denmark has high taxes for the poor and middle class Ironically, there's virtually no place better to be "poor" than in Denmark, because while poor people pay taxes, too, wages (and welfare) are so high that they end up living a better life than in other countries. Taxes on the rich are a different story, though, because while the tax rates on the rich may compare to those in the US, it seems to me (and I might be wr…

Taxes on the rich are a different story, though, because while the tax rates on the rich may compare to those in the US, it seems to me (and I might be wrong here) that, through tax deductions and various other things, rich Americans often end up paying relatively low taxes.

This is a common misconception and is completely incorrect. The "tax loopholes" have been gone for decades.

It is actually far easier for wealthy Danes to avoid high taxes - they can simply move to Monaco or Switzerland or Estonia or Poland, whilst Americans must first gain citizenship of a separate nation then renounce their citizenship and pay an exit tax.

Capital gains taxes tend to be slightly lower in the US, but corporate taxes far higher. Consumption taxes are of course far higher in Denmark, and this will annoy some rich people there but will typically have little impact on the bottom line.

Overall you're likely taxed higher as a rich American than a rich Dane - though individual circumstances will play a huge role.

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

#263

Post by aiiane »

nitai wrote: post #159
gopi wrote: post #153

Earlier quoted context omitted.

What was the problem?

It looked like someone got access through a plugin to the htaccess file and some db entries. This article helped ( http://blog.sucuri.net/2010/07/understanding-and-cleaning-th... ) though I only found one db entry. However fixed the htaccess file.

Unfortunately there's still stuff there when viewed from a Google IP - http://i.imgur.com/59qW1EM.png (Source: I'm currently at my desk, at Google.)

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

#264

Post by sosborn »

philiphodgen wrote: post #229
_delirium wrote: post #226

Earlier quoted context omitted.

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 world. The forms are atrocious. And I could go on about being taxed heavily for services I don't use. As a U.S. expat, I haven't noticed this. The forms aren't as easy as the Danish forms (which are fully automatic and done for you), but not too complex in my situatio…

You are one of the lucky few. :-) Be sure not to invest your savings in mutual funds. Form 8621. Be sure to avoid the local equivalent of an IRA if you want to do retirement savings. The IRS might not think it is a tax-free pension. And they might think that employer contributions are taxable income to you. Don't own stock in a foreign corporation. Don't become an officer with signature power over the corporation's b…

>The real problem is with the paperwork and the penalties for screwing things up.

When I lived abroad I just used a competent CPA. I'm not disagreeing with your statement, I'm just pointing out a viable solution.

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

#265

Post by sosborn »

nitai wrote: post #101
beagle3 wrote: post #84

Earlier quoted context omitted.

I think that's the most ridiculous thing about it: Whether you are an American who moved to a treaty country, or a treaty country resident who moved to the US, it is not likely that you'll have to pay a lot of US taxes if at all. (The treaties I am familiar with are quite reasonable). However, unless you are a tax professional yourself, you are going to be "taxed" by a professional to prepare all those papers that yo…

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...

To be fair, the earned income tax exemption is sufficiently large enough that you will be making six figures before you have to pay a penny in U.S. tax. You still have to file though.

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

#266

Post by tormeh »

cbp wrote: post #197

So if I'm neither american or european. Is it actually easier for me to move to europe, get a visa there and start an european company than an american one?

Probably easier in Europe, is my guess. Few first-world countries are worse than the US. Note that the EU is not a uniform place, so you need to do a bit of research on which country you want. As noted previously, the Scandinavian countries are good places to start. They all speak English as well, knowledge of the relevant Scandinavian language is not required for basically anything.

I would assume the same is true for Switzerland and The Netherlands. Think twice before going for Germany (a popular choice for many good reasons not including bureaucracy) and don't even consider the southern countries.

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

#267

Post by philiphodgen »

quellhorst wrote: post #219
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…

What do you think about an offshore corporation for Bitcoin startups? Considering the regulatory environment in the USA, is it better to incorporate in someplace like Panama or Switzerland?

The intersection of bitcoin and business and tax is an interesting place to be. Governments will, I think, want to reach out and smother Bitcoin with a pillow. How you prepare for that is an interesting question. He said. :-)

In choosing where to form a corporation you have to think about the protection that the country offers you.

My prediction is that after the USA has beaten Swiss banks into a pulp they will start marching through the Carribean. What is a tiny country going to do when Uncle Sam's minions land with a thud?

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

#268

Post by runewell »

Yeah, our tax/employment/visa system sucks, although European rumors of our impending demise are greatly exaggerated. If you're not from the USA it is understandable that you may not be aware of the nightmare that is our state legislation. Our states are like grumpy siblings in the big dysfunctional family we call our nation. They each have their own method of handling taxation and employment and each have their own irrational set of processes. As a nation we could certainly improve the way we handle such matters.

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

#269

Post by arbuge »

_delirium wrote: post #226
STRML wrote: post #137

Earlier quoted context omitted.

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…

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 world. The forms are atrocious. And I could go on about being taxed heavily for services I don't use. As a U.S. expat, I haven't noticed this. The forms aren't as easy as the Danish forms (which are fully automatic and done for you), but not too complex in my situatio…

>> not too complex in my situation of just having a regular salaried job

They are pretty much a nightmare if you're an entrepreneur and own corporations abroad. Look up Form 5471.

Even for non-entrepreneurs, I would say your experience is way better than most. Most US people overseas who say that taxes aren't a problem for them generally are blissfully unaware of their continuing US tax obligations.

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

#270

Post by tricolon »

vibrolax wrote: post #260
tricolon wrote: post #245

Earlier quoted context omitted.

Is that what you have to do if you're a citizen? Or does it apply to permanent residents as well?

Yes. Being a "US person" includes citizens and permanent residents. http://www.irs.gov/Individuals/International-Taxpayers/Class...

Wow, it even applies to resident aliens for tax purposes.
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