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Can anyone comment on the taxation situation? I mean, it may not be very interesting in the beginning when the earnings are not very far from zero, but as the

Can anyone comment on the taxation situation? I mean, it may not be very interesting in the beginning when the earnings are not very far from zero, but as the startup grows, and the stock incentives become more tangible, it's becoming relevant. I was personally looking at Barcelona once but the moment I looked at how much taxes they pay, I dropped the idea.

pjc50 9y ago
For the UK, the magic words are "EMI scheme" https://www.magma.co.uk/enterprise-management-incentive-schemes-basics/ https://www.magma.co.uk/enterprise-management-incentive-sche... Options received under an EMI scheme are tax-free, although you may eventually have to pay capital gains tax at time of exercise.
hackbinary 9y ago
You'll pay more in taxes, but there is universal healthcare available free at the point of delivery. So taxes might be higher here, but you and your employees will access to some of the best healthcare in the world. I do not think taxation should get singled out as a deciding factor where to setup a business, but could be considered in the round with all the other operational costs. Low taxes might seem good, but if the key services are non-existent or corrupt, then your costs of operation will be significantly higher than in a place that has high(er) taxes, but civil society is run efficiently.
- vadimberman 9y ago
  > I do not think taxation should get singled out as a deciding factor where to setup a business, but could be considered in the round with all the other operational costs. Simple math. Say, if your venture succeeds, you net a lump sum of, say, $300K - $500K? Plus, in the advanced stages, you'll be paying yourself around $80K - $100K p.a., which falls in the high tax bracket everywhere. The difference between high taxes and low taxes may make a difference between you being able to buy a new home for cash or not. If you're planning to spend a few years to have fun and immerse in a different culture and believe your venture is likely to fail, sure. If you are there to make money, think again. Of course, it's not the primary consideration. The primary consideration should be whether there is a market for your products and services. > Low taxes might seem good, but if the key services are non-existent or corrupt, then your costs of operation will be significantly higher than in a place that has high(er) taxes, but civil society is run efficiently. That's not necessarily how things work. I live in Singapore now, where the income tax is in single digits and the foreign sources of income are not even taxed, so if you're not an American, you can have your passive income tax-free. The key services are anything but non-existent or corrupt.
crispyporkbites 9y ago
I don't think taxes in the US are much lower than in Europe, as most people seem to assume e.g. here's a comparison which puts them close to the same, but note that it excludes property tax, which is pretty high in the US: https://www.theguardian.com/money/2017/may/27/tax-britons-pay-europe-australia-us https://www.theguardian.com/money/2017/may/27/tax-britons-pa...
- vadimberman 9y ago
  A weird comparison. I wonder where he took the numbers from. I can tell from experience that the Australian taxation authorities make the US taxation authorities look like a gift-giving Santa. I also dealt extensively with Europe, and Europe is by far worse than Australia in that respect. (A note to the dear Americans, I am not an American who went to Australia, it's the other way around.) And then they mix in mandatory pension contributions for some, which makes the comparison even weirder. Also note that this comparison is for long-term residents, not for expats or entrepreneurs that are there for a few years and may not be as interested in the social programs.
mistb0rn- 9y ago
I also had a look on what Barcelona has to offer, before their little rebellion. But I would have had to accept 50% less money than in Germany according to Glassdoor. And renting there is almost as expensive as here.

pjc50 9y ago

For the UK, the magic words are "EMI scheme" https://www.magma.co.uk/enterprise-management-incentive-schemes-basics/ https://www.magma.co.uk/enterprise-management-incentive-sche... Options received under an EMI scheme are tax-free, although you may eventually have to pay capital gains tax at time of exercise.

hackbinary 9y ago

You'll pay more in taxes, but there is universal healthcare available free at the point of delivery. So taxes might be higher here, but you and your employees will access to some of the best healthcare in the world. I do not think taxation should get singled out as a deciding factor where to setup a business, but could be considered in the round with all the other operational costs. Low taxes might seem good, but if the key services are non-existent or corrupt, then your costs of operation will be significantly higher than in a place that has high(er) taxes, but civil society is run efficiently.

vadimberman 9y ago
> I do not think taxation should get singled out as a deciding factor where to setup a business, but could be considered in the round with all the other operational costs. Simple math. Say, if your venture succeeds, you net a lump sum of, say, $300K - $500K? Plus, in the advanced stages, you'll be paying yourself around $80K - $100K p.a., which falls in the high tax bracket everywhere. The difference between high taxes and low taxes may make a difference between you being able to buy a new home for cash or not. If you're planning to spend a few years to have fun and immerse in a different culture and believe your venture is likely to fail, sure. If you are there to make money, think again. Of course, it's not the primary consideration. The primary consideration should be whether there is a market for your products and services. > Low taxes might seem good, but if the key services are non-existent or corrupt, then your costs of operation will be significantly higher than in a place that has high(er) taxes, but civil society is run efficiently. That's not necessarily how things work. I live in Singapore now, where the income tax is in single digits and the foreign sources of income are not even taxed, so if you're not an American, you can have your passive income tax-free. The key services are anything but non-existent or corrupt.

crispyporkbites 9y ago

I don't think taxes in the US are much lower than in Europe, as most people seem to assume e.g. here's a comparison which puts them close to the same, but note that it excludes property tax, which is pretty high in the US: https://www.theguardian.com/money/2017/may/27/tax-britons-pay-europe-australia-us https://www.theguardian.com/money/2017/may/27/tax-britons-pa...

vadimberman 9y ago
A weird comparison. I wonder where he took the numbers from. I can tell from experience that the Australian taxation authorities make the US taxation authorities look like a gift-giving Santa. I also dealt extensively with Europe, and Europe is by far worse than Australia in that respect. (A note to the dear Americans, I am not an American who went to Australia, it's the other way around.) And then they mix in mandatory pension contributions for some, which makes the comparison even weirder. Also note that this comparison is for long-term residents, not for expats or entrepreneurs that are there for a few years and may not be as interested in the social programs.

mistb0rn- 9y ago

I also had a look on what Barcelona has to offer, before their little rebellion. But I would have had to accept 50% less money than in Germany according to Glassdoor. And renting there is almost as expensive as here.