9 ms·
Ask HN: Where would you incorporate in 2021?
Where would you incorporate your company if you not a US-citizen and most of your clients are online?
- psikomanjak 5y agoI am thinking between Estonia with their e-residency program or Portugal with their 0% tax for the first 10 years. (Non-US and Non-EU resident)
- jdmoreira 5y agoCan you point me in the direction of finding more about Portugal's 0% corporate tax for the first 10 years?
- hwbehrens 5y agoThe parent may be referring to the Nonhabitual Resident Status exemption, which provides reduced (potentially to 0%) tax rates for different types of income. However, it appears that this may be changing [0]. "Portugal Golden Visa" is a good search to start. [0]: https://home.kpmg/xx/en/home/insights/2020/04/flash-alert-2020-192.html https://home.kpmg/xx/en/home/insights/2020/04/flash-alert-20...
- lars512 5y agoIt seemed to me that if you’re in fact working from another country, then you could be considered headquartered there, now you have two countries corporate tax systems to deal with.
- isbvhodnvemrwvn 5y agoIt depends on the laws, yes. I do recall someone getting burned by using Estonian 0% CIT while living in another country because it was ruled that they are running a controlled foreign corporation, with effective CIT rate of 0%, and they have to retroactively pay off the difference for the last few years, along with high interest.
- jokethrowaway 5y agoPortugal still requires you to actually have a foreign business, not just setting up a company in a remote country. A popular setup is living in Portugal and setting up a Maltese company and pay 5% corporate tax rate - and several accounting firms are more than happy to setup such structures. If your company doesn't have a reason to be incorporated in Malta (clients, employees, shareholders' meetings), Portugal could argue that's a Portuguese company and that you should pay taxes in Portugal. I haven't heard of Portugal pursuing this people, but it's not unheard of countries cracking down retroactively on businesses evading taxes, especially in times of crisis. Estonia's e-residence is not that attractive for one man operations for similar reasons.
- sdevonoes 5y agoYou incorporate in the country in which you live 183 days per year (or more). It's simple. If you live more than 183 days in country X, but you incorporate in country Y, you'll have a hard time explaning it to the tax authorities.
- sebst 5y agoNot sure why this is downvoted - this is the reality in most tax laws worldwide. https://en.wikipedia.org/wiki/Controlled_foreign_corporation https://en.wikipedia.org/wiki/Controlled_foreign_corporation
- sparkling 5y agoNot every jurisdiction has CFC rules. There are a few countries that simply don't care if you control a foreign corporation abroad. Now if you pay yourself a salary or dividends from that corporation, that might be taxable on a personal level, but that is another story.
- mbreese 5y agoExactly. The question was about where to incorporate a company, not where to run it from. Just also be prepared to deal with the massive headache of a company is one jurisdiction and living (and paying taxes) in another. This can be a headache even if you live in the US if you’re split between states.
- dariusj18 5y ago> be prepared to deal with the massive headache Which I would assume would be part of the calculations for any recommendation.
- texasbigdata 5y agoSo XYZ parent company thats say mature and public, who hires a French CEO who lives primarily in France should be a French company? Why? What if the customers are in the US? Etc
- happyjack 5y agoWyoming, Nevada, South Dakota, or Delaware.
- ryanlol 5y agoDubai is a pretty easy option. Friendly tax regime, convenient location, good infrastructure.
- sdfhbdf 5y agoFor some there might be moral blockers. Especially for women.
- breitling 5y agoYou may have Dubai confused with some of their neighbors. In Dubai Women can drive a car, don't have to wear a veil, and they can move around freely
- staticman2 5y agoIt's a bad country for women's rights. Among other things a woman needs the written permission of a male guardian to enter or leave a marriage. It's only "good" in comparison to their neighbors.
- eloff 5y agoAlso where they can be raped and then sentenced to jail along with the rapists. Happened to an Australian woman working at a hotel there. It's not a woman friendly country.
- ryanlol 5y ago... in 2008. I don’t think you really appreciate how fast things have been changing here. Might as well talk about how things weren’t so great for women in the west a little over 100 years ago. Despite what you might read in the Daily Mail, these countries have been catching up at a very accelerated pace.
- dbuxton 5y agoPre-investment, you should basically balance the administrative hassle and financial burden of incorporating in the US - specifically, Delaware with the decreased friction of fundraising for a US topco. Cons of DE: - US lawyers are the worst both in terms of quality and cost - You may need local sub to employ you - If you're not in the US you may struggle to open a bank account etc in your local jurisdiction Pros of DE: - Everyone knows how to invest in a DE C-Corp no matter how early stage - Many tax advantages for investors can be maintained (e.g. EIS for UK taxpayers) - Lots of nice tooling for doing company secretarial stuff (e.g. Carta) Once you have enough cash not to worry too much about the odd moderately expensive and opaque advisory bill for something you never knew you needed, the US looks more and more attractive strategically. To the extent that some people think there shouldn't even be a debate (e.g. https://medium.com/angularventures/us-incorporation-just-do-it-f2ae062d4eec https://medium.com/angularventures/us-incorporation-just-do-...) (Source: founder of UK startup with US sub, acquired by US company)
- jawns 5y ago> US lawyers are the worst both in terms of quality and cost That's not really a downside of incorporating in Delaware. It's more like a downside of incorporating in the US.
- nowherebeen 5y agoI am actively debating between Singapore or Delaware. The US tax system is unnecessarily complex compared to Singapore. On the other hand, my customers will be in both Singapore and US, so it might make sense to incorporate in Delaware.
- ValentineC 5y agoI don't see why you wouldn't be able to do business in the US with a Singapore company, but some customers might require a W8-BEN.
- digianarchist 5y agoThere's a thread on Reddit where a guy flew to Singapore to open a bank account for his corp after they confirmed on a call that everything is good. They didn't open his account citing reporting requirements for US citizens. If you're a US citizen you will have a hard time operating in Singapore without residency.
- ehnto 5y agoWhere I live, so that I can be a part of and give back to the community that hosts me. Hopefully that doesn't come off snarky, but I mean it sincerely. Most of my clients are also online, in fact most are from the US and I am not. Our countries have a fair tax treaty, so that's never been an issue. Exceptions I am sure exist where your home doesn't play very nicely and so taking your business elsewhere is fair.
- tengbretson 5y agoWherever you want to see your tax dollars converted into public works.
- anotherman554 5y agoThis question is so vague I can't imagine there is a reasonable answer to it. If you are a one person shop I imagine I'd incorporate in my own country under the assumption it would make the paperwork easier.
- second--shift 5y agoI've seen this exact thread before, with the same comments (from different users) a day or two ago. Possible bot/spam/GPT-3?
- mattvv 5y agoFor US Citizens, it's hard to argue against Puerto Rico. Great tax benefits for product companies and service companies. Catch is you have to move to PR, but it's a beautiful island so why not.
- eloff 5y agoIf you want venture financing. Delaware C Corp. Don't even think of anything else. Use Stripe Atlas. But that's not most businesses. If you don't live in a country with CFC rules (not the US) why not Panama? Uses the US dollar and has no taxes on foreign source income. Dividends from companies that earned foreign source income are taxed at 5%. Strong financial services sector that can wire and receive money anywhere in USD. If you optionally put the company inside a personal foundation you get incredibly strong protection from lawsuits, inheritance taxes, and even divorce. There is no support from major US payment companies like stripe. So you'll need to handle payments through a foreign company or through a local bank which offers the service (expect to pay more than stripe). I setup an integration over a decade ago (with Multibank), it wasn't too bad, and I'm sure it has improved since then.
- benjaminjosephw 5y agoIt's insightful to see how many comments are about avoiding tax. Companies with an anti-society, screw-the-poor, not-my-problem attitude are exactly the kind of companies that make the world a worse place for everyone - except shareholders and (sometimes) paying customers. Tax is part of participation in democratic societies, intentionally avoiding it is immoral if you also enjoy the benefits of the same democratic system.
- wyager 5y agoIf a region has hostile or uncompetitive tax laws, people should be free to take their business elsewhere (literally). It has nothing to do with “participating in democracy” or whatever other moral window dressing you want to put on it.
- elric 5y agoPardon the ad hominem, but I would argue that your reply is moral window dressing instead. If you don't like your tax laws, you have two realistic options: voting against them, or moving. Reaping the benefits of the "uncompetitive tax laws" (e.g. good public infrastructure, or maybe good socialised healthcare, etc) while deliberately not contributing seems highly immoral.
- wyager 5y agoCorporate tax law taxes corporations, not individuals. Obviously I would still pay whatever individual tax was required where I live, but if I home a corporation elsewhere why would I pay for that where I happen to live physically? I’m paying taxes there because I’m using the corporate infrastructure, not for the dog parks or whatever.
- benjaminjosephw 5y agoExpecting "freedom" without anticipating any kind of societal responsibility is exactly what I'm talking about. Participating in society is about mutual responsibility, not just choice. Anti-social individualism permits this kind of thinking but I can't see a moral justification beyond self-interest.