Ask HN: What's your freelancing company/business setup? | Hacker News Reader

Ask HN: What's your freelancing company/business setup?

10 pointsMystery-Machine7 comments

Most of my clients are in USA and I have a small SaaS (~$500 MRR) with most of its users from USA.

I'm checking my options to have minimal bureaucracy overhead (for me) and minimum expenses (taxes, lawyers, accountants, etc.).

I'm thinking of opening an LLC in Wyoming or Delaware. As far as I understand, I could pay myself dividend and have zero profits so I'd only pay dividend taxes in my home country - Croatia, which is 10%.

I know this question has been asked several times and I've read almost all of those past threads, but it's still not 100% clear to me that I have it right. I just don't want to end up with something like C-Corp.[0][1][2]

I'm sure there are people with ton of experience here so I'm looking for your help. Did you use Stripe Atlas? Something else? Should I open outside of USA (Canada? Croatia? Estonia? Singapore?)

Thank you!

[0] - https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States

[1] - https://taxsummaries.pwc.com/united-states/corporate/taxes-on-corporate-income

[2] - https://stripe.com/guides/atlas/tax-season

Some past discussions about Stripe Atlas:

https://news.ycombinator.com/item?id=18870886

https://news.ycombinator.com/item?id=24282940

All of the below is no professional advice, I’m just a programmer who looked into this a bit.

The easiest thing in my opinion would be to incorporate in Croatia and then use Paddle https://www.paddle.com/, Gumroad https://gumroad.com/ or FastSpring https://fastspring.com/ for payments. They take care of all your VAT/Sales taxes.

If you want to go with a simple company outside of Croatia, maybe go with a UK Ltd, easy and cheap to set up and run. I used Sleek https://sleek.com/uk/ for that.

But if you live in Croatia, I would go with a local equivalent of a Ltd + Paddle/Gumroad/FastSpring.

IMO the only reason for you to incorporate outside your home country is if you can't accept credit card payments there.

It seems that Stripe is available in Croatia[1], so I don't understand why you want to incorporate elsewhere.

[1] https://stripe.com/en-hr/pricing

There are many reasons to incorporate outside of your home country:

1. Clients paying you - it's easier for USA entities to pay to another USA entity

2. Stripe != Stripe Atlas

3. There are ton of unfavorable laws in Croatia and ton of unnecessary bureaucracy to get your money out of your company bank account. For that amount of bureaucracy, I'd need to pay ~130€ - 200€ /mo for an accounting company even if I only had one invoice per month

The list goes on...

Freshbooks in my experience has been the 90% best tool for my needs, although kind of expensive.

"Accounting Software Built for Business Owners and Accountants" - wtf is this headline? Who else besides business owners and accountants uses accounting software? /sorry I digress

I just chatted with their sales representative, they only provide accounting software, they don't help with incorporation. I'm looking for a all-in-one solution in a way.

Check what Croatian tax authorities think of controlled foreign corporations(cfc's).

Most countries don't allow you to just expatriate income to skip taxes while still living in your local country.

I wrote about it in my blog a few months ago when I redid my research to open an entity for a new business [1].

TL;DR: it depends. Most likely an LLC will suffice.

[1] https://caruizdiaz.com/2022/04/03/the-non-resident-alien-nra...

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