4 ms·
Pre-investment, you should basically balance the administrative hassle and financial burden of incorporating in the US - specifically, Delaware with the decreas
by dbuxton 5y ago
Pre-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.