Comment by gumby | Hacker News Reader

Comment by gumby | Hacker News Reader

I recently had to consider this and was quite surprised to discover that the US was the best place. Compared to most countries the US has been a tax haven for a long time, but the 2017 tax change meant that in most cases the US would be a significantly cheaper place to recognize revenue.* Also the mechanics of getting the boring things done is significantly easier, as noted by the Germany post cited in your question.

Because of the US FATCA law you may have trouble opening a bank account in some countries (smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”, a term which has specific meaning). In practice this just means you have to deal with larger banks.

Note I’ve been a US resident for decades, and started several companies here, but am not a US citizen and have lived and worked on three other continents as well so had no prior bias.

* Note 2: this business is intended to be quite profitable relatively soon, rather than a “focus on user growth and toggle the profit switch later business.

> Because of the US FATCA law you may have trouble opening a bank account in some countries (smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”, a term which has specific meaning). In practice this just means you have to deal with larger banks.

You mean opening a bank account personally or for the company? Because for the company I'd simply use Wise or Mercury and be done with it.

I believe they are referring to the concept of corporate personhood. FACTA applying to "US persons" means it applies to corporate accounts too.

Last time I looked it's hard to use something like Wise as your bank for your payroll.

Wise has been great for managing my personal payments, but I still have personal bank accounts in a couple of countries where I hold property because it just makes things easier there.

Wise is not very business friendly yet (they're probably busy planning their next rename), better to use Airwallex

Commerzbank terminated my contract after 14 years as a loyal customer (and plenty of money in the account) — they refused to say why, but my best guess is they were culling Americans.

I think getting a German bank to open a business account for a U.S. startup would be a nightmare at best.

Totally agree, but why would you need a corporate bank account in Germany? You could simply use the US bank accounts?

You usually need a local bank account. For example, in the NL I need an NL bank account for taxation purposes for my NL business.

I understand that. But why would a US company need a NL bank account?

Because it had a subsidiary in NL, perhaps because it had employees to pay, or otherwise did business there.

> subsidiary

which would be a local company registered in the Netherlands?

Owned by a US person?

Australian here. When I open a commercial bank account (i.e., company) here the FACTA regs mean I have to jump through a bunch of hopes to prove I’m not a US person, and neither other the other shareholders. And then I have to re-prove it every few years after it’s opened.

> smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”

That only counts for companies with operations in the US. My wife is a US citizen, and my bank - a medium-sized Danish bank - did not care, because they don't operate any business in the US, so they do not need to provide any paperwork for her to US authorities.

Not an attorney, not a tax attorney, not your attorney, but US persons are required to report bank accounts they hold globally under both FBAR and FATCA, and signatory authority on business accounts is also a thing. Additionally, controlled foreign corporations are a thing for US people.

I'm also not a lawyer or CPA, but I believe if a US person is a partial owner in a foreign corporation, the company is required to do their accounting by GAAP standards. So, if the company is in a country that follows IFRS standards, it would have to do their books twice.

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