15 ms·

First tax year with Stripe Atlas

202 points by jmstfv 6y ago

nicdc 6y ago
Is there a Stripe Atlas equivalent service for Canada?
kevindong 6y ago
So all in and assuming the company gets charged the Silicon Valley Bank monthly account fee, the annual cost of existing is $1,100. Which honestly doesn't seem that substantial to me (someone who's never founded a startup).
bitxbit 6y ago
How’s the initial business formation process compared to Clerky?
- jmstfv 6y ago
  With Atlas, I filed a form and received an email with docs (to sign) a few days later. I got my Certificate of Incorporation and a bank account (got blocked, but that's a different story) the same day I signed docs. Then, they invite you to issue the stock via the web form, and that concludes the process on their end. The only hiccup was with receiving an EIN confirmation later, so I had to call IRS so they could fax it to the third-party designee. Haven't used Clerky, but the biggest perks with Atlas are a bank account (which is generally a pain to open for non-residents) and $5k AWS credits.
  - sah2ed 6y ago
    > I got my Certificate of Incorporation and a bank account (got blocked, but that's a different story) ... Would appreciate the story if you shared it, we are still in a pandemic :)
    - jmstfv 6y ago
      Shortly, the Silicon Valley Bank blocked my account access because their telephony service couldn't reach my foreign number via SMS/Phone call 5 times in a row. Had to make several calls to unblock my account. You'd think that a bank that claims to "work with the brightest minds in technology" would have a better 2FA mechanism than a phone number...
  - thiscatis 6y ago
    You can get a Revolut USD account with no hassle that supports local ACH transfers and 100.000 usd in AWS credits with a compelling startup story. Stripe atlas has become obsolete already if these are your needs.
    - jmstfv 6y ago
      https://www.revolut.com/en-US/help/profile-plan/verifying-identity/what-countries-are-supported https://www.revolut.com/en-US/help/profile-plan/verifying-id... > We are currently only supporting legal residents of the European Economic Area (EEA), Australia, Canada, Singapore, Switzerland, Japan and the United States The problem is that if you're not from the "right country", you're pretty much locked out from the finanical infrastructure needed to process payments on the Internets. I wasn't that gung ho about incorporating a business abroad but didn't have much choice.
an_opabinia 6y ago
Typically you also pay franchise tax to California if you live and work there. Some states like Massachusetts have you pay into an unemployment insurance fund. Usually you will pay for QuickBooks and a payroll processor like Gusto, which is $960/yr together. So for not profitable entities $800 CA FTB + $450 DE FTB + ... C Corps enjoy a 21% flat tax rate. They are a very attractive way to conduct business on that alone, if you are actually profitable. The little taxes and fees may make your effective tax rate compared unfavorably to pass through, however if you’re making that little money what was the point then?
- danielrhodes 6y ago
  The reason to not have a C Corp if you are small is double taxation - if you are small you would be paying payroll taxes, corporate income taxes, and personal income tax all on money that is going to you.
  - jmstfv 6y ago
    That, and LLCs tend to be easier to run.
Digory 6y ago
1. On taxes, a C Corp might be the right choice, but he didn't say enough to reject an LLC that elects to be taxed under Subchapter S. A C Corp taxed under Subchapter C creates the classic "double taxation" problem, where any profit distributions are taxed twice before hitting the founder's pocket. 2. A CMRA (virtual mailbox) is not a good registered agent. The "registered agent" is the place the sheriff or process server delivers a lawsuit to a real person. If your mailbox address doesn't accept hand-delivery, they'll reject service. And if that happens, you may not hear about any lawsuit until the court has already ruled against you and entered a judgment. Most states say that if you don't have a place for hand-delivery, the person suing you can mail it to the Secretary of State, who then mails it to your last known address. You rarely get the suit in time to answer. You can find registered agents cheaper than $100. But don't assume your virtual mailbox is a good solution.
- withinboredom 6y ago
  They did cover 1 quite clearly. At least to me, an American that lives outside America with some US income. You do not want pass through outside the US. Unless you just like paying taxes. Edit: Just to clarify why I said this. The US has a “anti-double taxation” treaty with most countries. Except that it doesn’t really apply fully to businesses. For example, I basically paid almost 50% income tax on income made from the US last year. I’m trying to figure out how to restructure to fix this.
  - eli 6y ago
    I think you're discussing a different problem from the parent post. Depending on how you form your US company, you can end up in a situation where the company pays corporate income taxes on any profits, and then when you distribute those profits to yourself you pay personal income tax on them too -- so the same income is essentially taxed twice. There are separate issues with how the US taxes money made overseas.
    - withinboredom 6y ago
      Hmm. Yeah, I see your point. The point I was making though is that pass-through causes /all/ income to be taxed as personal income. When outside the US, you also have to pay income tax in your country (most likely). So now you’re paying income taxes for all revenue (not profits) in both countries. Even with the tax treaty, you’re still looking at an extra ~15% tax on whatever you pay in your own country. With a C Corp, you pay US taxes via the company. You control how much goes to you, personally, which you pay income taxes on. Depending on the amount, you may not have any issues with US income tax.
cperciva 6y ago
For a supposedly business-friendly country, the USA certainly seems to have a bunch of fees. Tarsnap is incorporated in BC, Canada. I pay less than $50 to file an annual report with the government (basically just a "the company still exists and the mailing address and directors haven't changed"); there's no franchise tax; and Tarsnap's corporate income tax is easy enough for me to do by hand (it takes about 2 hours and I usually file in the first week of January). The notion of spending $1000/year just to keep a company in existence seems crazy to me.
- hal9000-tng 6y ago
  It's per state. For example, Texas has zero taxes due until you exceed approximately $1.1M in gross receipts, and then it maxes out at 1%, and no annual fees of any kind (unless you forget to file your usually one-page tax return and information reports, in which case it's $50 each.) Combined with an S-Corp and relatively low U.S. federal taxes, your combined tax bite can be very low indeed.
- irjustin 6y ago
  Way late to the party. US is a business-friendly country because it a large population, which for many products operate as one demographic, with comparably high spending power. It is NOT tax/fee friendly by any means especially for non-US based owners as the author notes. If you go the LLC route is quite cheap to own/operate an empty business for citizens. The tax code alone is beyond any one person's understanding. Even for the individual, it is far from straight forward.
- simonebrunozzi 6y ago
  Hey Colin! Did you write anything about your business recently? I've been following you for a while and would love to read more about Tarsnap. Edit: by the way, I knew your background was good, but didn't realize it was THIS good: [0] > Dr. Colin Percival studied mathematics at Simon Fraser University, entering at age 13 [0]: https://www.tarsnap.com/about.html https://www.tarsnap.com/about.html
  - cperciva 6y ago
deleted 6y ago
[deleted]
aledalgrande 6y ago
SVB account is free for 3 years if you do it directly with them. But Atlas cost is lower than the cost of opening with a good lawyer.
- OkGoDoIt 6y ago
  SVB was a horrible antiquated banking experience. It was heavily recommended for my last startup so I signed up without shopping around. It was literally the worst online banking experience I’ve ever used, straight out of the 90’s. And there were fees for every little thing. Maybe they’ve improved in the last 5 years, but I will never try them again.
  - aledalgrande 6y ago
    What did you transition to? It's true that everyone recommends them.
    - OkGoDoIt 6y ago
      The business didn’t last very long so we never got around to switching banks. But whenever I do my next startup I will shop around more. I would love to hear any recommendations people might have to share.
      - aledalgrande 6y ago
        Question is, would you use their UI/services a lot if you also had a Stripe account connected to it?
        manigandham 6y ago
        Sending wires, depositing checks, transferring between accounts, bill pay, etc. They all require the terrible mobile app or online UI. Banks are all the same until you're a big company, better to go with one with modern tools.
    - 6y ago
kureikain 6y ago
If you lived in California, and do business in California, and you incoporate in Delaware you still have to pay $800 tax per year for California. You cannot escape it.
- AlchemistCamp 6y ago
  Can't you just leave California?
  - thinkloop 6y ago
    That's likely to cost more than $800
    - jjoonathan 6y ago
      It's likely to save you more than $800 too.
- nakedgremlin 6y ago
  Yup. We encountered this exactly on our initial set up for our company. This made us decide to domesticate our company from Delaware to California, with a little bit of money lost for this learning process.
sudhirj 6y ago
How do you close down a Stripe Atlas LLC? Stripe has since opened up in my country and I don’t see the need for the added complexity and expense any more.
crispyporkbites 6y ago
Strip atlas vs a UK Ltd company, assuming you have the choice, what’s best for a SaaS?
- jsmith99 6y ago
  It's very easy to open a UK limited company online and it costs £12 plus £13 a year subsequently. If your business activities are simple you can file accounts through HMRC (tax authority) website without any software or necessarily needing an accountant. https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-filing-software https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-f...
  - juskrey 6y ago
    And even if you require software, there are lots of really good options, from £15 to around £150 per return. All listed on HMRC site.
  - nsgf 6y ago
    Any idea if you can continue to sell software to EU residents, given (?) a hard Brexit? edit: Just to clarify, It is not clear if digital goods will remain tariff free.
- matthewheath 6y ago
  I am from the UK, so I am biased. I've also never used Stripe Atlas myself so I am ignorant of how easy or hard it is to wind things up there. -- Stripe Atlas appears to tie you in to a bunch of services(?) and I'm guessing it would be hard to re-incorporate in another state for friendlier tax treatment or whatever, whereas a UK Ltd company doesn't tie you into anything and the regulatory fees are minimal. Most of the expenses are in business banking and accountancy services once you start making money. It only costs £12 ($16) to register a company in the UK, and then £13 ($17) each year for the annual filing. Business banking will cost £5-10 ($7-13) each month. Accountants will cost a lot more, and you may not need them if you're a small company prepared to do all your own bookkeeping, etc. Our tax laws are uniform across the jurisdiction and we have a lot of double-taxation treaties set up with other countries, as well as a culture that accepts foreign ownership of companies. The hardest part would be acquiring a business bank account because of the Know Your Customer anti-money-laundering regulations and checks, but that can be dealt with by most banks and you don't need to visit the UK or live here for that. A UK Ltd would give you a lot of flexibility, and is easy to wind up if things don't pan out. I don't have any experience of Stripe Atlas so can't comment on the ease of winding the company up there, but it seems difficult based on other comments in this topic.
kemitchell 6y ago
What about tax in the home country?
vmception 6y ago
> While Delaware doesn’t have a sales tax, they do impose a Franchise Tax on registered businesses. Whoops, they should have gone with any other state! Delaware's court of chancery is overrated.
danschumann 6y ago
How does it make sense to pay taxes to another state when your business doesn't even operate from there? I would assume your home state doesn't like that very much.
mattferderer 6y ago
I considered the Stripe Atlas route because I wanted someone to handle things for me & make it easy. I ended up finding a friend recommended accountant who could handle my taxes & help me setup everything. An option I didn't know about that seems to work out really well for tiny 1 or 2 person startups not looking to raise money is a LLC taxed as an S-Corp. I would recommend both finding a good accountant (or 2) and having them help you set it all up with you. This way you have a person you can bounce questions off of throughout the year. Another item I learned. Pick your bank wisely. A lot of people were left high & dry for a long time when looking to get the PPP loan this year. You need a bank that's actually going to care about you and doesn't think you're not worth their time. I heard a lot of people who couldn't get a hold of their bank & the bank didn't return their calls. Also don't expect anyone to loan you money for a mortgage or personal reason until after running the business for 2 years. Your income won't be counted, no matter what to most banks. The USA has a lot of hurdles & pains if you want to run a business but once you cross the moat, it can be much better than being a W-2 employee for someone else.
- andrewflnr 6y ago
  How do you tell before the crisis whether your bank is going to care about you?
  - jjeaff 6y ago
    Pretty much any small bank or credit union will work with you. All large banks are complete garbage to all but their wealthiest customers.
ssijak 6y ago
The advantage of Stripe Atlas was that they would open a bank account for you which was a big plus for foreigners because of the KYC rules. But now that Mercury bank is a thing and everyone can open a bank account online, there is no advantage to Stripe Atlas. Especcially now that Atlas does not allow foreigners to open a LLC. Everybody can form Wyoming LLC online for 100 bucks and pay 25$/year for an agent/mail address, or if you want someone else to do it there are reliable services to do that for around 350$.
- dvasdekis 6y ago
  Any recommendation/guides for a service that lets you form a Wyoming LLC online from overseas?
- jmstfv 6y ago
  I know for the fact that Mercury was closing accounts for the residents of Belarus because it was too costly for their partner bank to figure out who's on the sanctioned list. In that case, you will have to travel to the US to open a bank account, which kinda defeats the whole point of remote incorporation. It could happen with any other bank as well.
- mamcx 6y ago
  With a mercury account is possible to setup stripe from abroad? Not in a country listed for stripe?
  - literallycancer 6y ago
    Note that Stripe is quite expensive if you want to accept payments globally rather than just from the US.
  - rtsil 6y ago
    Yes. You can open a Mercury account only if your company is registered in the US, so for Stripe's purposes you are just a US company like all the others.
dzink 6y ago
I’m not an accountant so confirm with one: 1. C Corp with S corp taxation would be ideal, but if you don’t have that, make sure you store all of your legitimate expenses including accounting, taxes, ads, etc. You can save any losses as NOLs and use them to offset future gains for a while. Many SV startups don’t have a profit for a long time but the losses are still worth something (some get acquired for the losses). 2. Small number of initial stock issuing below 5000 helps reduce expenses until you get a valuation that matters. 3. A Delaware CCorp that doesn’t yet make money with founder in California who owns property will spend close to $2000 annually between 800 california FTB tax, delaware minimal tax, turbotax, registered agent, etc.
Andrew_nenakhov 6y ago
We have chosen Estonia E-residence program. Very friendly, filing taxes is easy, and one can hardly beat 0% tax on corporate income.
- sireat 6y ago
  I thought the 0% tax only applied on invested income in Estonia did it not? https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corporate-income https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corp... That is once you want to distribute the income then you do have to pay corporate income tax of 21%.
  - def_true_false 6y ago
    Why would you ever want to distribute income? I mean, why not just reinvest it?
    - juskrey 6y ago
      Eventually you'll have to buy food, and maybe, for some really lucky ones, have kids and house.
      - def_true_false 6y ago
        Companies buy delivery or dining for their employees all the time. Real estate could be owned by the company, same for cars. The feasibility of this probably differs a lot by country, depending on how anal the tax laws and authorities are.
        juskrey 6y ago
        This really does not work anymore in most civilized countries, and most of the time they have explicit limits on that kind of stuff, unless you can REALLY justify that (hospitality industry etc).
      - Andrew_nenakhov 6y ago
vincentmarle 6y ago
When I moved to the US from Europe, I was suprised by how complicated everything is (and I thought the EU was unnecessarily complicated). Yes, you have the same language and the same currency, but other than that you’re pretty much dealing with 50 different countries all with their own laws and taxes. Sales taxes can be different even on the county and city level. Luckily everything has been done and solved before but it means you’re gonna have to rely much more on lawyers and accountants to get things done.
stevehawk 6y ago
As a US Citizen living in the US, I've created ~5 LLCs in the last fifteen years.. 2 with Stripe.. I didnt really see an advantage of Stripe over doing it myself. A decent CPA seemed to be cheaper and more personal. That said, only the Stripe ones were created as Delaware corps which was probably unnecessary for both of them, but made them infinitely more complex.
puranjay 6y ago
I've been considering taking the leap for quite a while. Is there anyone from India here who has used Stripe Atlas? Would love to chat!
martinesko36 6y ago
Is the only reason international founders, who otherwise have lower fees/admin for an entity in their home country, incorporate in Delaware just to become investment-friendly for VCs?
jamesponddotco 6y ago
Slightly off-topic, but is there something similar to Stripe Atlas for other jurisdictions? I run a privacy-focused WordPress hosting company, and while in closed alpha, I registered a personal company in the country where I live to be paid, but I would like to register a proper company before launch, as I do not wish to register it in the country I live in — especially since I want to leave the country once the pandemic is over. The other founders and I have been researching and looking into incorporating in Romania, as the country seems to offer good opportunities for new companies and even make moving there easier if you incorporate, but the amount of shady lawyers we found is worrisome. A service like Stripe Atlas for jurisdictions in Europe would be much appreciated — not necessarily for Romania, as we also looked into Germany and Finland, just something less fishy than random lawyers on the internet.
- sjilo 6y ago
  Have you looked at Estonia? https://e-resident.gov.ee/ https://e-resident.gov.ee/
  - jamesponddotco 6y ago
    I did, although, I cannot remember why it was ruled out. EDIT: Okay, reading past mailing lists inside the company, it seems like key disclosure laws may apply in Estonia, which raised a few eyebrows here. As a hosting company it is obvious that we will deal with bad actors at times, and we already have procedures in place to disclosure the little information we have to authorities if asked. However, I read more than one account on authorities raiding data centers for drives without talking to anyone before doing so, and we want to have the legal right to deny them access to the encryption keys in court.
edoceo 6y ago
For Comparison: I'm a 5yr old WA C-Corp, have lawyer and accountant and nexus in three states - all in I'm at $4k/yr for the fees and the labor to process this.
manigandham 6y ago
Please talk to a finance/tax professional first before doing anything. While you can get a good overview of the various corporate structures online, there are so many complexities and unique details about your business that you just won't know by trying to do it yourself and these formation tools usually default to the lowest-common denominator. Surprise taxes and fees can kill your business before it ever starts.

202 points by jmstfv 6y ago

Is there a Stripe Atlas equivalent service for Canada?

So all in and assuming the company gets charged the Silicon Valley Bank monthly account fee, the annual cost of existing is $1,100. Which honestly doesn't seem that substantial to me (someone who's never founded a startup).

bitxbit 6y ago

How’s the initial business formation process compared to Clerky?

jmstfv 6y ago
With Atlas, I filed a form and received an email with docs (to sign) a few days later. I got my Certificate of Incorporation and a bank account (got blocked, but that's a different story) the same day I signed docs. Then, they invite you to issue the stock via the web form, and that concludes the process on their end. The only hiccup was with receiving an EIN confirmation later, so I had to call IRS so they could fax it to the third-party designee. Haven't used Clerky, but the biggest perks with Atlas are a bank account (which is generally a pain to open for non-residents) and $5k AWS credits.
- sah2ed 6y ago
  > I got my Certificate of Incorporation and a bank account (got blocked, but that's a different story) ... Would appreciate the story if you shared it, we are still in a pandemic :)
  - jmstfv 6y ago
    Shortly, the Silicon Valley Bank blocked my account access because their telephony service couldn't reach my foreign number via SMS/Phone call 5 times in a row. Had to make several calls to unblock my account. You'd think that a bank that claims to "work with the brightest minds in technology" would have a better 2FA mechanism than a phone number...
- thiscatis 6y ago
  You can get a Revolut USD account with no hassle that supports local ACH transfers and 100.000 usd in AWS credits with a compelling startup story. Stripe atlas has become obsolete already if these are your needs.
  - jmstfv 6y ago
    https://www.revolut.com/en-US/help/profile-plan/verifying-identity/what-countries-are-supported https://www.revolut.com/en-US/help/profile-plan/verifying-id... > We are currently only supporting legal residents of the European Economic Area (EEA), Australia, Canada, Singapore, Switzerland, Japan and the United States The problem is that if you're not from the "right country", you're pretty much locked out from the finanical infrastructure needed to process payments on the Internets. I wasn't that gung ho about incorporating a business abroad but didn't have much choice.

an_opabinia 6y ago

Typically you also pay franchise tax to California if you live and work there. Some states like Massachusetts have you pay into an unemployment insurance fund. Usually you will pay for QuickBooks and a payroll processor like Gusto, which is $960/yr together. So for not profitable entities $800 CA FTB + $450 DE FTB + ... C Corps enjoy a 21% flat tax rate. They are a very attractive way to conduct business on that alone, if you are actually profitable. The little taxes and fees may make your effective tax rate compared unfavorably to pass through, however if you’re making that little money what was the point then?

danielrhodes 6y ago
The reason to not have a C Corp if you are small is double taxation - if you are small you would be paying payroll taxes, corporate income taxes, and personal income tax all on money that is going to you.
- jmstfv 6y ago
  That, and LLCs tend to be easier to run.

Digory 6y ago

1. On taxes, a C Corp might be the right choice, but he didn't say enough to reject an LLC that elects to be taxed under Subchapter S. A C Corp taxed under Subchapter C creates the classic "double taxation" problem, where any profit distributions are taxed twice before hitting the founder's pocket. 2. A CMRA (virtual mailbox) is not a good registered agent. The "registered agent" is the place the sheriff or process server delivers a lawsuit to a real person. If your mailbox address doesn't accept hand-delivery, they'll reject service. And if that happens, you may not hear about any lawsuit until the court has already ruled against you and entered a judgment. Most states say that if you don't have a place for hand-delivery, the person suing you can mail it to the Secretary of State, who then mails it to your last known address. You rarely get the suit in time to answer. You can find registered agents cheaper than $100. But don't assume your virtual mailbox is a good solution.

withinboredom 6y ago
They did cover 1 quite clearly. At least to me, an American that lives outside America with some US income. You do not want pass through outside the US. Unless you just like paying taxes. Edit: Just to clarify why I said this. The US has a “anti-double taxation” treaty with most countries. Except that it doesn’t really apply fully to businesses. For example, I basically paid almost 50% income tax on income made from the US last year. I’m trying to figure out how to restructure to fix this.
- eli 6y ago
  I think you're discussing a different problem from the parent post. Depending on how you form your US company, you can end up in a situation where the company pays corporate income taxes on any profits, and then when you distribute those profits to yourself you pay personal income tax on them too -- so the same income is essentially taxed twice. There are separate issues with how the US taxes money made overseas.
  - withinboredom 6y ago
    Hmm. Yeah, I see your point. The point I was making though is that pass-through causes /all/ income to be taxed as personal income. When outside the US, you also have to pay income tax in your country (most likely). So now you’re paying income taxes for all revenue (not profits) in both countries. Even with the tax treaty, you’re still looking at an extra ~15% tax on whatever you pay in your own country. With a C Corp, you pay US taxes via the company. You control how much goes to you, personally, which you pay income taxes on. Depending on the amount, you may not have any issues with US income tax.

cperciva 6y ago

For a supposedly business-friendly country, the USA certainly seems to have a bunch of fees. Tarsnap is incorporated in BC, Canada. I pay less than $50 to file an annual report with the government (basically just a "the company still exists and the mailing address and directors haven't changed"); there's no franchise tax; and Tarsnap's corporate income tax is easy enough for me to do by hand (it takes about 2 hours and I usually file in the first week of January). The notion of spending $1000/year just to keep a company in existence seems crazy to me.

hal9000-tng 6y ago
It's per state. For example, Texas has zero taxes due until you exceed approximately $1.1M in gross receipts, and then it maxes out at 1%, and no annual fees of any kind (unless you forget to file your usually one-page tax return and information reports, in which case it's $50 each.) Combined with an S-Corp and relatively low U.S. federal taxes, your combined tax bite can be very low indeed.
irjustin 6y ago
Way late to the party. US is a business-friendly country because it a large population, which for many products operate as one demographic, with comparably high spending power. It is NOT tax/fee friendly by any means especially for non-US based owners as the author notes. If you go the LLC route is quite cheap to own/operate an empty business for citizens. The tax code alone is beyond any one person's understanding. Even for the individual, it is far from straight forward.
simonebrunozzi 6y ago
Hey Colin! Did you write anything about your business recently? I've been following you for a while and would love to read more about Tarsnap. Edit: by the way, I knew your background was good, but didn't realize it was THIS good: [0] > Dr. Colin Percival studied mathematics at Simon Fraser University, entering at age 13 [0]: https://www.tarsnap.com/about.html https://www.tarsnap.com/about.html
- cperciva 6y ago

deleted 6y ago

[deleted]

aledalgrande 6y ago

SVB account is free for 3 years if you do it directly with them. But Atlas cost is lower than the cost of opening with a good lawyer.

OkGoDoIt 6y ago
SVB was a horrible antiquated banking experience. It was heavily recommended for my last startup so I signed up without shopping around. It was literally the worst online banking experience I’ve ever used, straight out of the 90’s. And there were fees for every little thing. Maybe they’ve improved in the last 5 years, but I will never try them again.
- aledalgrande 6y ago
  What did you transition to? It's true that everyone recommends them.
  - OkGoDoIt 6y ago
    The business didn’t last very long so we never got around to switching banks. But whenever I do my next startup I will shop around more. I would love to hear any recommendations people might have to share.
    - aledalgrande 6y ago
      Question is, would you use their UI/services a lot if you also had a Stripe account connected to it?
      - manigandham 6y ago
        Sending wires, depositing checks, transferring between accounts, bill pay, etc. They all require the terrible mobile app or online UI. Banks are all the same until you're a big company, better to go with one with modern tools.
  - 6y ago

kureikain 6y ago

If you lived in California, and do business in California, and you incoporate in Delaware you still have to pay $800 tax per year for California. You cannot escape it.

AlchemistCamp 6y ago
Can't you just leave California?
- thinkloop 6y ago
  That's likely to cost more than $800
  - jjoonathan 6y ago
    It's likely to save you more than $800 too.
nakedgremlin 6y ago
Yup. We encountered this exactly on our initial set up for our company. This made us decide to domesticate our company from Delaware to California, with a little bit of money lost for this learning process.

sudhirj 6y ago

How do you close down a Stripe Atlas LLC? Stripe has since opened up in my country and I don’t see the need for the added complexity and expense any more.

crispyporkbites 6y ago

Strip atlas vs a UK Ltd company, assuming you have the choice, what’s best for a SaaS?

jsmith99 6y ago
It's very easy to open a UK limited company online and it costs £12 plus £13 a year subsequently. If your business activities are simple you can file accounts through HMRC (tax authority) website without any software or necessarily needing an accountant. https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-filing-software https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-f...
- juskrey 6y ago
  And even if you require software, there are lots of really good options, from £15 to around £150 per return. All listed on HMRC site.
- nsgf 6y ago
  Any idea if you can continue to sell software to EU residents, given (?) a hard Brexit? edit: Just to clarify, It is not clear if digital goods will remain tariff free.
matthewheath 6y ago
I am from the UK, so I am biased. I've also never used Stripe Atlas myself so I am ignorant of how easy or hard it is to wind things up there. -- Stripe Atlas appears to tie you in to a bunch of services(?) and I'm guessing it would be hard to re-incorporate in another state for friendlier tax treatment or whatever, whereas a UK Ltd company doesn't tie you into anything and the regulatory fees are minimal. Most of the expenses are in business banking and accountancy services once you start making money. It only costs £12 ($16) to register a company in the UK, and then £13 ($17) each year for the annual filing. Business banking will cost £5-10 ($7-13) each month. Accountants will cost a lot more, and you may not need them if you're a small company prepared to do all your own bookkeeping, etc. Our tax laws are uniform across the jurisdiction and we have a lot of double-taxation treaties set up with other countries, as well as a culture that accepts foreign ownership of companies. The hardest part would be acquiring a business bank account because of the Know Your Customer anti-money-laundering regulations and checks, but that can be dealt with by most banks and you don't need to visit the UK or live here for that. A UK Ltd would give you a lot of flexibility, and is easy to wind up if things don't pan out. I don't have any experience of Stripe Atlas so can't comment on the ease of winding the company up there, but it seems difficult based on other comments in this topic.

kemitchell 6y ago

What about tax in the home country?

vmception 6y ago

> While Delaware doesn’t have a sales tax, they do impose a Franchise Tax on registered businesses. Whoops, they should have gone with any other state! Delaware's court of chancery is overrated.

danschumann 6y ago

How does it make sense to pay taxes to another state when your business doesn't even operate from there? I would assume your home state doesn't like that very much.

mattferderer 6y ago

I considered the Stripe Atlas route because I wanted someone to handle things for me & make it easy. I ended up finding a friend recommended accountant who could handle my taxes & help me setup everything. An option I didn't know about that seems to work out really well for tiny 1 or 2 person startups not looking to raise money is a LLC taxed as an S-Corp. I would recommend both finding a good accountant (or 2) and having them help you set it all up with you. This way you have a person you can bounce questions off of throughout the year. Another item I learned. Pick your bank wisely. A lot of people were left high & dry for a long time when looking to get the PPP loan this year. You need a bank that's actually going to care about you and doesn't think you're not worth their time. I heard a lot of people who couldn't get a hold of their bank & the bank didn't return their calls. Also don't expect anyone to loan you money for a mortgage or personal reason until after running the business for 2 years. Your income won't be counted, no matter what to most banks. The USA has a lot of hurdles & pains if you want to run a business but once you cross the moat, it can be much better than being a W-2 employee for someone else.

andrewflnr 6y ago
How do you tell before the crisis whether your bank is going to care about you?
- jjeaff 6y ago
  Pretty much any small bank or credit union will work with you. All large banks are complete garbage to all but their wealthiest customers.

ssijak 6y ago

The advantage of Stripe Atlas was that they would open a bank account for you which was a big plus for foreigners because of the KYC rules. But now that Mercury bank is a thing and everyone can open a bank account online, there is no advantage to Stripe Atlas. Especcially now that Atlas does not allow foreigners to open a LLC. Everybody can form Wyoming LLC online for 100 bucks and pay 25$/year for an agent/mail address, or if you want someone else to do it there are reliable services to do that for around 350$.

dvasdekis 6y ago
Any recommendation/guides for a service that lets you form a Wyoming LLC online from overseas?
jmstfv 6y ago
I know for the fact that Mercury was closing accounts for the residents of Belarus because it was too costly for their partner bank to figure out who's on the sanctioned list. In that case, you will have to travel to the US to open a bank account, which kinda defeats the whole point of remote incorporation. It could happen with any other bank as well.
mamcx 6y ago
With a mercury account is possible to setup stripe from abroad? Not in a country listed for stripe?
- literallycancer 6y ago
  Note that Stripe is quite expensive if you want to accept payments globally rather than just from the US.
- rtsil 6y ago
  Yes. You can open a Mercury account only if your company is registered in the US, so for Stripe's purposes you are just a US company like all the others.

dzink 6y ago

I’m not an accountant so confirm with one: 1. C Corp with S corp taxation would be ideal, but if you don’t have that, make sure you store all of your legitimate expenses including accounting, taxes, ads, etc. You can save any losses as NOLs and use them to offset future gains for a while. Many SV startups don’t have a profit for a long time but the losses are still worth something (some get acquired for the losses). 2. Small number of initial stock issuing below 5000 helps reduce expenses until you get a valuation that matters. 3. A Delaware CCorp that doesn’t yet make money with founder in California who owns property will spend close to $2000 annually between 800 california FTB tax, delaware minimal tax, turbotax, registered agent, etc.

Andrew_nenakhov 6y ago

We have chosen Estonia E-residence program. Very friendly, filing taxes is easy, and one can hardly beat 0% tax on corporate income.

sireat 6y ago
I thought the 0% tax only applied on invested income in Estonia did it not? https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corporate-income https://taxsummaries.pwc.com/estonia/corporate/taxes-on-corp... That is once you want to distribute the income then you do have to pay corporate income tax of 21%.
- def_true_false 6y ago
  Why would you ever want to distribute income? I mean, why not just reinvest it?
  - juskrey 6y ago
    Eventually you'll have to buy food, and maybe, for some really lucky ones, have kids and house.
    - def_true_false 6y ago
      Companies buy delivery or dining for their employees all the time. Real estate could be owned by the company, same for cars. The feasibility of this probably differs a lot by country, depending on how anal the tax laws and authorities are.
      - juskrey 6y ago
        This really does not work anymore in most civilized countries, and most of the time they have explicit limits on that kind of stuff, unless you can REALLY justify that (hospitality industry etc).
    - Andrew_nenakhov 6y ago

vincentmarle 6y ago

When I moved to the US from Europe, I was suprised by how complicated everything is (and I thought the EU was unnecessarily complicated). Yes, you have the same language and the same currency, but other than that you’re pretty much dealing with 50 different countries all with their own laws and taxes. Sales taxes can be different even on the county and city level. Luckily everything has been done and solved before but it means you’re gonna have to rely much more on lawyers and accountants to get things done.

stevehawk 6y ago

As a US Citizen living in the US, I've created ~5 LLCs in the last fifteen years.. 2 with Stripe.. I didnt really see an advantage of Stripe over doing it myself. A decent CPA seemed to be cheaper and more personal. That said, only the Stripe ones were created as Delaware corps which was probably unnecessary for both of them, but made them infinitely more complex.

puranjay 6y ago

I've been considering taking the leap for quite a while. Is there anyone from India here who has used Stripe Atlas? Would love to chat!

martinesko36 6y ago

Is the only reason international founders, who otherwise have lower fees/admin for an entity in their home country, incorporate in Delaware just to become investment-friendly for VCs?

jamesponddotco 6y ago

Slightly off-topic, but is there something similar to Stripe Atlas for other jurisdictions? I run a privacy-focused WordPress hosting company, and while in closed alpha, I registered a personal company in the country where I live to be paid, but I would like to register a proper company before launch, as I do not wish to register it in the country I live in — especially since I want to leave the country once the pandemic is over. The other founders and I have been researching and looking into incorporating in Romania, as the country seems to offer good opportunities for new companies and even make moving there easier if you incorporate, but the amount of shady lawyers we found is worrisome. A service like Stripe Atlas for jurisdictions in Europe would be much appreciated — not necessarily for Romania, as we also looked into Germany and Finland, just something less fishy than random lawyers on the internet.

sjilo 6y ago
Have you looked at Estonia? https://e-resident.gov.ee/ https://e-resident.gov.ee/
- jamesponddotco 6y ago
  I did, although, I cannot remember why it was ruled out. EDIT: Okay, reading past mailing lists inside the company, it seems like key disclosure laws may apply in Estonia, which raised a few eyebrows here. As a hosting company it is obvious that we will deal with bad actors at times, and we already have procedures in place to disclosure the little information we have to authorities if asked. However, I read more than one account on authorities raiding data centers for drives without talking to anyone before doing so, and we want to have the legal right to deny them access to the encryption keys in court.

edoceo 6y ago

For Comparison: I'm a 5yr old WA C-Corp, have lawyer and accountant and nexus in three states - all in I'm at $4k/yr for the fees and the labor to process this.

manigandham 6y ago

Please talk to a finance/tax professional first before doing anything. While you can get a good overview of the various corporate structures online, there are so many complexities and unique details about your business that you just won't know by trying to do it yourself and these formation tools usually default to the lowest-common denominator. Surprise taxes and fees can kill your business before it ever starts.