Stripe opens its Atlas program to US-based startups

We ship first and then announce dates because down the other path lies disaster, but LLCs are a great way to incorporate many tech businesses, and Atlas aims to incorporate most tech businesses.

The TCO of a company depends heavily on your situation, which is one reason we find it difficult to have an official answer on that.

As a single data point, my personal tax situation involved US LLCs last year, as an American living in Japan. I spent about ~$10k on accountants to file taxes in both countries plus bookkeeping services. That's towards the high end among my friends; that's nowhere near the high end for "total amount spent on accountants in a year." For comparison, Atlas would have introduced me to an accounting firm offering the US side of that for ~20% of what I ended up spending on it. (This is difficult to do an apples-to-apples comparison even in this case, because C Corp vs LLC, but trust me when I say "I was pleasantly surprised where we got the numbers to.")

We're working on having an even better offering here for next year. We'll have more to say that closer to tax season 2017.

Where are you from? Have you answered the following questions?

a) What is my foreign affiliate reporting requirements? For a Canadian, you must file a T1134 annually. The T1134 for a controlled foreign affiliate (where you exercise control) is very onerous. It is not that bad for a non-controlled foreign affiliate.

b) What is my foreign affiliate taxation requirements, in that foreign jurisdiction? This is an answer that must come from Atlas I guess. But for a foreigner owning a US LLC, where the US LLC will be controlled from a country with which the US has a tax treaty, we get into many complexities.

c) Will I have an income pickup from active business income from owning a foreign affiliate? For Canada, this is a "no."

d) Will I have an income pickup from passive income earned in a foreign affiliate? For Canada, this is a "yes." Canadians should never earn rental income, royalty income, or other such passive income in a US LLC, for example.

e) How will I deal with the "place of central management and control?" Many countries deem a corporation to be resident in that country if you habitually exercise management and control from that country. For example, a Canadian that owns a US LLC will result in the following:

- US LLC is a tax resident of the US by virtue of incorporation, and must file a tax return to report earnings from the USA (no flow through). As the LLC will be a resident of Canada as well (see below), branch profits tax of 30% may apply (IRS 884).

- US LLC is a tax resident of Canada by virtue of being controlled, "mind and management," from Canada by a Canadian, and must therefore file a Canadian corporate tax return.

The situation is different for Canadians owning "C" corporations. However, it brings its own complexities and nuances. The reporting requirements are challenging.

For those seeking to own a foreign company, research your own reporting and disclosure requirements carefully.

Stripe's goal is to increase the GDP of the Internet. We're doing Atlas because we think it is instrumentally useful to achieving that. This isn't purely altruistic; we're increasing the GDP of the Internet both because it is a good thing to do and because we intend to capture a sliver of the value unlocked during this economic transformation.

In terms of what we'll build into Atlas: absolutely anything that is needed by ambitious technically-oriented companies, with a particular focus on things that we feel we have a comparative advantage in shipping. Sometimes we'll be building things ourselves, sometimes we'll be partnering with folks who have part of the puzzle already.

That would be very interesting because it would remove all risk for the founders of being considered "US persons", which has unexpected and unpleasant consequences such as not being accepted as a client by many non-US banks or financial services.

It is not clear to me at the moment if incorporating currently through Atlas makes a foreign, non-US resident founder into a US person, or not.

Have you considered http://startupr.com?

I am not affiliated with them, but are using them currently and they are providing great service.

You should try Adyen https://www.adyen.com/

It's an European company and it's the main competitor to Stripe on our continent. They are actually a bit older and ten times bigger than Stripe, however they don't advertise much.

Disclaimer: I am NOT affiliated with any of these providers.

What you're describing isn't unique to Stripe. Pretty much every payment processor works this way. I've looked into a lot of them have yet to find a mainstream one that will deposit USD to a USD account in Europe, HK, SG, etc. (If Adyen does specifically that without big fees then great, but it's news to me.)

What Stripe support is really telling you is that you need a US bank account to avoid the exchange fees. This is more or less correct. As you say, though, they're misguided is in pushing Atlas. It's probably the simplest way for you to get a US bank account, but in many ways it's the worst long-term option. That's because Stripe Atlas creates a C-Corp, which is liable for US corporation taxes and has to file them every year.

You have two other options: 1) Get a US Bank account for your foreign company directly. This is not easy, many banks won't do it, but some will. E.g. I have a SVB account for a foreign corporation (with an EIN) so I can use Stripe in the US for my subscription app.

2) Form a US LLC that's fully owned by your EU corp. A single member LLC can elect to be tax transparent in the US. That means you don't have to pay US corporate taxes as long as you don't have business operations (employees, basically) in the US. With a US LLC it's relatively easy to open a US bank account, though you may need to travel to the US. If you want some expert tax advice for the US component of this setup here's a good guy to ask: http://ustax.bz/

Once you have a US bank account sorted you may need to migrate your Stripe subscriptions. This is not something that Stripe officially supports or will do for you, but after lots of digging with their support I was told that it's possible to do without requiring any re-opt-in from your subscribers. It's just that you need to do the migration yourself by transferring the subscription data. (Details escape me. Please confirm this with them yourself.)

What's the benefit of all this, other than adding a few percent to your gross profits? Well, the market for online business buyers is much stronger in the US than anywhere else. I'm betting on the fact that it'll be significantly easier to sell a business with a US Stripe account than a business with a German / Irish / Hong Kong / Singapore / whatever stripe account.

Of course we're talking a few percent here and a few percent here. Before diving into this rabbit hole I would ask yourself if marketing & sales for a few percent increase might not be less effort than all of the above.

Right, that was a bit long-winded. I don't monitor my replies here much, but feel free to ping me if you have questions.

public @ my_hn_username . org

I'm going to look into this for you and will follow up by email. (If I find something which is useful for similarly situated companies, I will post what I learn here.)

Agreed. When I needed a letter of credit BofA refused to issue one to a new company, despite us having ample cash to cover our commercial lease. We switched to SVB, they issued one quickly, and we've been happy ever since. Their technology stack may be a little antiquated, but they are very startup-friendly in their policies. They offer lots, especially to well-funded startups, that you just won't find elsewhere.

You have to acknowledge a bank named Silicon Valley and having absolutely terrible technology and only recently a mobile app that is not even native is somewhat of an oxymoron. They also nickel and dime fees.

While I am sure SVB does assist with loans, investors, legal, most small businesses and startups just need a checking account and going with SVB is a mistake.

For AR, cash management facilities and even backing a bond for a long-term commercial lease, they are pretty startup friendly -- at the beginning. I had a company in the 90s that got caught in a couple of unexpected ripples (unrelated to our core business), and a couple of unexpected contracts that failed to close at the same time (completely related to our business), a cancelled IPO (because, Y2000's NASDAQ plunge) and then the private equity guys hiding under their desks, and ... yet more nonsense that ended up hitting a wall that had materialized out of nothing faster than we had planned for. Whatever - it happens. We found two buyers that, between them, would pick up >95% of our employees and get the investors 85% back on their ~$100m invested. Not great - but it sure beats a sharp stick in the eye. Silicon Valley would not budge on their first leinholder position on some cash we wanted to move to get liquidated to get everyone (including them!) paid. I think they held up an $85M million transaction over a $2M deposit we had in their bank (but they froze) for almost 3 weeks. Almost queered the deal twice over. At this point I don't remember the details, but I remember being frustrated (and very very surprised!) that they had changed from friendly/flexible to "nope! not gonna do it!" in a heart beat, and they almost lost out on getting paid their piece (which was bigger than the $2M note they were holding us up over). Weird.

"Does Capital One work with foreign startups? That's really the main question here."

Since when is that the main question? The title of the post is Atlas opens to US-based startups. Give Spark business checking a call and ask about foreign accounts 1-844-88-SPARK

I opened a Capital One 360 account a few weeks back. Approved instantly, and got my debit card 2 days later! Great experience honestly.

> mobile camera deposit

What is this?

Does Schwab have business checking accounts? Their page at http://www.schwab.com/public/schwab/investing/accounts_produ... lists brokerage accounts but nothing about checking accounts. I use Schwab for my primary personal checking account but it seems to me that they don't offer that service to businesses.

Well not sure about saving you money. Wire transfers I believe across the board are cheaper using Capital One Spark $25 flat.

Additionally you can transfer in and out of Spark for free using linked accounts not even within Capital One. Something not even possible with SVB.

Could you elaborate on why they are better for VC-backed companies? In what material way?

Yes they did. For what it worths I had established clientele and cashflow.

Their rates are also bad.

Use USForex instead.

Thanks, but:

1) If the HN community is so noisy then why are you here? :P

2) I deliberately used my university email address to create trust, and if someone wanted to do due diligence I use the same handle everywhere else.

3) I've been following this project for longer than 2 minutes and applied previously.

You sound like a fucking jackass.

Got it, thanks for clarifying Patrick. That sounds like a fairly clear ethical line in the sand so kudos for taking that position.

Good luck with the US launch :)

1. Yes, we sell a back-house automation subscription service for restaurants.

2. From the US! Grateful to have been able to be a part of the beta, even in the US.

3. Nope. You don't need to be generating revenue to work with Stripe Atlas. Companies decide, on their own, when they need to incorporate.

Hey lkki, I'm based in the US and we got access to the beta!

It works, it just uses a heck of a lot of CPU. Using Chrome in El Capitan if that makes a difference.