Ask HN: Two co-founders, USA and EU. Where should we incorporate? | Hacker News Reader

Ask HN: Two co-founders, USA and EU. Where should we incorporate?

9 pointsbrendanmc68 comments

It seems this project of ours is about to make its first Euro! So we need to incorporate, quick.

Given that we wish to both hire and sell globally-- where should we register our online business?

I am having trouble finding good information on the nuances, especially when it comes to paying foreign employees. Services like Gust and Stripe Atlas look really enticing, as does the Delaware corporate tax rate-- but our initial customers are in the EU and I fear I am overlooking something.

In short, we offer a web platform that makes it easy to run crowd-sourced mapping campaigns. Our initial target market is municipalities, planning departments, and people working in public participation and civic engagement. (if you find these topics interesting in any way, let's connect! brendan@canvis.app)

I'd love to hear from anyone whose considered both options, what you ended up deciding on, and any difficulties or regrets you've had!

I'm from Poland and have Delaware C-Corp registered through Atlas Stripe. There was no other easy option for me to accept recurring online payments (Stripe is not available in Poland). I have one-person company registered in Poland that is invoicing Delaware C-Corp for consulting and development work. I think it is good option if you would like to sell globally.

Do you pay 7-10% taxes in Delaware C-Corp and then pay taxes on the income you earn as the Polish company?

Yes, I'm paying in US and in Poland.

Was it easy to set up C-Corp through Stripe Atlas, by not being in US? How long did it take?

Any particular reason that you didn't go with an Estonian company instead?

How and where you establish your first legal entity (be it a corporation, limited liability company, etc.) in order to do business is not necessarily such an important decision.

Of course, there will be tax, accounting and administrative implications. Also, in some structures and some legal systems, giving equity as compensation to employees is not that easy or could have unexpected consequences.

Unless you have investors lined up, or expect to grow exceptionally fast, you usually have plenty of time to change the legal entity under which you operate. Furthermore, as you grow, it is not unlikely that you will have legal entities in multiple countries, using different legal structures. For example, a Delaware Corporation in the US, if you are doing a lot of business in California, you will need a California legal entity as well (iirc), maybe an Ltd in the UK and one in another EU country. Basically, you should probably have a local legal entity in every country where you will have employees.

It's probably a good idea to get a lawyer to help you out. You should be able to find one wherever you wish to start your business who specializes in doing just that.

I hope this helps.

You definitely are overlooking something. Corporate (tax) law and doing business with governments in the EU.

I would suggest consulting a good accountant / corporate tax advisor before doing anything.

You should incorporate where yo have a strong market.

Be careful with having a US corporation with low income, and EU subsidiaries with high income:you will be taxed when you move the money to the US to keep the US corp alive.

It is much better to have a US subsidiary of a EU corp. Some people say for corporations the US is a tax heaven (compared to the EU).

Second option: Luxemburg, Lichestein, Cyprus.

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