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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

#351

Post by Terr_ »

philiphodgen wrote: post #144
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…

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.

That's like saying that programmers have no incentive to solve buggy systems, because otherwise their reason to exist would disappear.

Sure, there are probably a nonzero number of folks making their own job-security out there, but in both cases you'll find plenty of people who would be happy to have the system work better and who have some professional pride in it.

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

#352

Post by apa-sl »

philiphodgen wrote: post #213
apa-sl wrote: post #207

Earlier quoted context omitted.

We're running a startup incorporated in European Union and planning to incorporate c-corp in Delaware as our mother company. C-corp will simply buy-out 100% shares in our European company which will be still hiring our employees (located and working in Europe). From what we've checked we shouldn't have any hassle (event the c-corp bank account will be opened in European bank) or are we missing something?

Do not transfer IP to the US mother ship before you have thought it out. You can transfer IP into the USA but once you have done that all of the profit generated from that IP worldwide will be subject to US tax. And if you ever want to transfer the IP out of the USA it will be treated as a sale. The worst I ever saw was one of those online poker sites. To move out of the USA they had to move their IP to a new foreign…

Thank you for the comment. We are doing this US mothership thing in anticipation of next round of funding from US investor and according to what we know and have heard, US incorporated mothership is the only realistic way to go, right?

So I presume that it would be the best to only delay the IP transfer from Europe to US just before the investment and formal links (US company owning 100% of European company) might be already in place?

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

#353

Post by apa-sl »

warrenm wrote: post #342
philiphodgen wrote: post #213

Earlier quoted context omitted.

Do not transfer IP to the US mother ship before you have thought it out. You can transfer IP into the USA but once you have done that all of the profit generated from that IP worldwide will be subject to US tax. And if you ever want to transfer the IP out of the USA it will be treated as a sale. The worst I ever saw was one of those online poker sites. To move out of the USA they had to move their IP to a new foreign…

by "IP", do you mean "Internet Protocol" or "Intellectual Property"?

I would say, that by "IP" he meant "Intellectural Property" ;-)

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

#355

Post by rurban »

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 heard Germany and Italy had many double taxation issues also, besides Australia, but they have at least treaties to avoid such. They only other state which goes after their people living abroad is Ethiopia, but they have double taxation treaties with at least Israel, Italy and South Africa. So yes, US tax laws are the worst.

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

#356

Post by astrodust »

workhere-io wrote: post #145
levosmetalo wrote: post #97

Earlier quoted context omitted.

What is a postage-stamp nation then?

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

A lot of Americans, having been denied a proper geography education, consider Europe itself to be a postage stamp.

If challenged they'd probably assert the whole thing was smaller than Texas.

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

#357

Post by hueving »

girvo wrote: post #296
hueving wrote: post #154

Earlier quoted context omitted.

>I really don't understand this fetishization of the US for business. You don't understand because of the following idiotic strawman. "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." Rather than whining about your impression of the US on HN, maybe you could do some research on your own to find out why it's such a strongly preferred place…

His post is filled with hyperbole, yes, but as someone who has spent 18 months looking to move to the US from Australia, I've personally come to the conclusion that for me it's simply not worth it. The risks are too high, and those risks come from things like your legal environment, the health care situation, and the Byzantine labyrinth that is your tax code. Moving would have opportunity, yeah! And a lot of it. But…

>Now, you can deal with all those things. There are ways to manage, mitigate or avoid them. I'm well aware of that. But frankly, I shouldn't have to...

This is very common with a mismatch in entitlements. People don't know how to handle the things they are used to getting for free.

Realistically though, you can just pay to have someone do your taxes and you will never have to worry about penalties and you will likely get extra deductions that you didn't know were available. Yes, it would be nice if the government provided this service already, but they don't and even including this in a reason not to move to the US is sad because the cost of having a professional do it is so negligible.

The legal environment depends on what you would be doing here. If you are just working for a company, you will effectively never have to deal with it. If you are starting your own company, then yes, it's a pain but I haven't gone down that path so I can't elaborate on that further.

Finally, for health care it depends again your situation. If you are working for a good company, you will get good health care and it won't be a concern. You might have to pay small fees on visits to the doctor, but these are usually <$50. When looking from your perspective, keep in mind that the US health care debate is always going to bring up worst possible case scenarios that aren't representative of the norm, especially if you are a skilled migrant worker good enough for a company to get you an H1B.

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

#358

Post by chris_wot »

davidw wrote: post #47
tomelders wrote: post #42

Earlier quoted context omitted.

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.

Sort of like this:

https://www.youtube.com/watch?v=JD9d0ZrBnLE

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