Ask HN: Foreign founders – would you incorporate in the US today? | Hacker News Reader

Ask HN: Foreign founders – would you incorporate in the US today?

8 pointseelliott6 comments

I have been thinking, as an Australian, that were I to found a company today, I would be hesitant to incorporate or headquarter in the US. Obviously it might exclude opportunities such as YC and any investors who only invest into US corporations, but the current political climate US is not exactly stable and I actually think high risk for startups, especially in the following respects:

* The president has undermined the rule of law and has challenged court rulings through twitter. This gives me no confidence that if your US corporation was engaged in litigation, especially against the government, that the court's rulings would be respected or followed.

* Immigration policy - you would find it increasingly difficult to recruit foreign staff and could be stigmatised for hiring from outside the US.

* Pressure to be an 'all American company' - Similar to the above but with respect to outsourcing, there is a risk that if you became successful, the President could at any day tweet negatively about your company.

* Risk of war with the world.

I'm sure there's more but just some thoughts I've been having. What do other foreigners think?

I have pondered this question for a while too.

Obviously it is easier for YC to manage its founders and investments if they all embrace a common legal framework. Being a YC company does not necessarily mean your operations are based in the US, only that you incorporate there.

To respond to some of your questions:

> The president has undermined the rule of law....

My understanding is that the actions of the president or any other official can be successfully challenged in court. He doesn't have the last word

> Immigration policy - you would find it increasingly difficult to recruit foreign staff and could be stigmatised for hiring from outside the US

Not an issue if you operate outside the US. If you operate within the US, you deal with them the same way as your peers.

> Pressure to be an 'all American company' ...

Same answer as stated above

> Risk of war with the world

Nobody is going to war anytime soon. Trump is a fan of theatrics. As recent events have shown, more mature counsel will have its say.

But on a related note, I have always wondered - how do taxes work for YC companies incorporated in the US with operations abroad? Do they pay taxes both countries? This must impact their profitability and chances for survival in their growth stage

Hi Lordrminius,

In respect of the first point, while you say the President doesn't have the "last word", there were for example indications of US Customs officials ignoring court orders presumably on the instruction of the white house during the immigration order debacle.

That was an isolated incident and not by any means the norm. The US government will find ways to 'f' your company over if they so desire, but it will not usually be so crudely executed. (I'm not a fan of US incorporation by the way)

Excellent question. I would recommend the nomadic capitalist.

There is a sheen placed on the US which is waning.

But buying power and corporate freedoms are still better here.

As someone who tried to startup in India and have had success here, the grind may be a bit more currently but still a fan.

We can still have a local branch run by trusted collaborators in the US while keeping HQ elsewhere. Same for UK from Europe after Brexit. Relocating in person is not the only option.

There are many, many disadvantages of incorporating here. For example, if you are an atheist, or have any other ideas that are anti-mainstream (eg. are critical of dogmatic feminism or runaway capitalism) you may be targeted by the surveillance state, which in my case has already happened.

The added stress compounds the existing stress of running a startup.

If YC opened an international branch, I would leave in a heartbeat. I'm also looking into Techstars, which seems to have some international presence. I really hope YC takes some leadership here.

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