While I see some good points, if the US was such an inferior place to start software companies, I think we'd see more US-originated entrepreneurs setting up shop in Canada, Europe, or other places. I don't hear of that too often, but I do hear of the reverse frequently.

The US' corporate taxation policies are an improvement on those in many other countries. We're not Singapore, but we're closer to them than many of these other nations when it comes to heavy taxation.

Most law firms provide a proxy server? I seriously doubt this. And though they don't ask for 5%, they ask for a dollar sign with some numbers to follow. 5% is cheap if you're starting with almost nothing.

Dealing with VC's? Seems like it could happen.

Stripe and Braintree are two among dozens of technology providers who are unavailable, more expensive, and/or more time-consuming if you're overseas. Seems like 5% to save a few months of red tape (and in many cases a few thousand dollars) may not be such a bad deal for a number of startups. Would be really nice to get a foreign entrepreneur's take on this.