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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

#71

Post by nitai »

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?

If your company is incorporated in Europe, say Denmark, then you have to pay corporate taxes in Denmark. Hiring someone, e.g. in Portugal, Switzerland, etc. Does not force you to incorporate in those countries.

However, the employee will have to pay taxes where he lives, independent for whom he works for.

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

#72

Post by ryankask »

beagle3 wrote: post #58

And ... the article doesn't touch on it, but that goes triple on personal tax issues -- especially if you do not sever your ties to your previous states of residence. The US tax code, as evidenced by FBAR and FATCA, assumes that the only purpose of any financial transaction or account outside the US, is to hide money from the IRS. You have to report each and every "account", with contact details at the institution, e…

I moved to the UK a few years ago and I couldn't agree more that the IRS rules and regulations unfairly penalize "average" US citizens that live and operate abroad.

FBAR, FATCA and if you start a business, form 5471 and friends. I got some quotes from a few accountants and I will likely have to pay thousands of dollars for assistance just to fill out informational forms and pay (maybe) a few hundred dollars in US taxes.

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

#73

Post by nitai »

hackerboos wrote: post #70
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.

Capital. Capital. Capital. The US has investors, angels and funds that are willing to take chances and put money into startups. You simply don't have that here in Europe.

Exactly, one of the (major or even only?) reason to be in the US.

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

#74

Post by workhere-io »

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 wages, which is an advantage if you want to start a business here.

We rank as no. 4 on Forbes' list of Best Countries for Business (http://www.forbes.com/best-countries-for-business/list/) and as no. 5 on World Banks' Ease of Doing Business list (http://www.doingbusiness.org/rankings).

So what's bad about doing business in Denmark? The cloudy weather (think UK) and the personal income taxes :) The corporate tax isn't particularly high, though (24%).

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

#75

Post by dijit »

josefresco wrote: post #64
jdimov wrote: post #2

Spot-on. Also, don't get me started on mobile internet and broadband. Every time I go to America it's like going to a 3rd world country.

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)

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

#76

Post by nitai »

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 company.

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

#77

Post by akumen »

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…

Very good point. We are in a country that's No.33 on business friendliness list and it shows. More hoops to jump through than there are in Northern Europe or the US. So incorporation in the US was an improvement.

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

#78

Post by happyscrappy »

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.

If Europeans spent even half the time they spend complaining about America on building something useful, they wouldn't have to feel insecure in the first place.

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

#79

Post by nitai »

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?
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