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I have an LLC (US), but this is one of the blunders I've made and I plan on dissolving it soon. There are many reasons to my answer, here are some: The problem

I have an LLC (US), but this is one of the blunders I've made and I plan on dissolving it soon. There are many reasons to my answer, here are some: The problem with a US based LLC is that you open up free access to thousands of patent trolls waiting to eat your hard earned money. This isn't a problem if you can afford a decent Lawyer for $5000-15000, but for businesses like mine, which are bootstrapped, it's totally unaffordable. Well funded startups usually have a separate legal department to resolve these issues, but when you're running a startup totally from your own pocket, it becomes extremely hard and annoying. I was wondering for a solution until a very good friend of mine suggested me something nice. If you set up a company somewhere in India (or some other popular, Start-up friendly developing country), these patent trolls have little access to you in terms of licensing, etc. Usually a patent troll will send you a legal letter threatening you about violation of some kind of absurd technology patent, etc. But, when you start up elsewhere, these become nulled[1]. Meaning, they can't touch you. Worse-case scenario, even if someone DID sue you, the lawyers are really cheap in such developing countries. We're talking about price ranges of $50-1000. And for $500 bucks you can get some really nice lawyers to get the job done. There's also a LOT of start-up friendly exemptions for companies in such developing countries simply because they don't have enough of them and they want more people to start up. So, even though these countries are often referred to as 'third worlds', they are really good places to start up. If you know of anyone wanting to start up from those countries, you should probably team up with them as their co-founder and that should be good enough. Of course, all this assuming that you aren't interested in seeking funding and you want a bootstrapped start up. But then, if you are seeking funding, you'll probably have enough cash to afford a $5000 lawyer anyway. One potential issue you may find running a startup from a developing country is the access to decent payment gateways. But then, if you don't mind sharing an extra 1% with the gateway provider, you can probably use someone like skrill.

rfctr 13y ago
Samsung was in South Korea. Apple blocked Samsung's sales in US based on patent issues. It doesn't matter where you're located. What matters where you want to do business.
- studentrob 13y ago
  Blocking business seems like an unusual step, or at least we rarely hear about it in the news. Is there any precedent for a patent case successfully blocking a business whose service is all on a website? If so, what happened? Did they simply take over the domain? What if a business used a foreign owned domain? I feel like there are options here that may not have been tried. Presumably a patent troll could try to tell your payment service and US based servers not to do business with you, but I haven't heard of that either, aside from credit card companies blocking Wikileaks and the US govt seizing servers suspected of hosting illegal stuff. I forgot why the US govt seized servers in VA a few years back but the point is that is pretty unusual too and I wonder how far a patent troll would go or how difficult it would be for them to get through all that. The only way China blocks Facebook, for example, is through a massive firewall, and their businesses generally don't accept any foreign credit cards. The US seems unlikely to put in a huge firewall or modify DNSs to go after small businesses for patent trolls..
  - rfctr 13y ago
    Wikileaks blockade is a good example of the power that can be used when parties fail to come to an agreement. Most companies though prefer to settle out of court because the court is quite a gambling, that's why we do not hear it more often.
    - studentrob 13y ago
      Wikileaks is based in Sweden and was seen as threatening by the US govt. Companies that settle out of court are, from what I have read, small to medium sized US based companies that can face legal action if they do nothing. What I am talking about is a small company that is foreign based in a place that does not comply with US patents. Has there been one that has ignored US patents and been shut down by having their domain blocked or their US payments disallowed?
      - rfctr 13y ago
        In other words, is being small & poor a good defense against trolls? Yes, it is. Try to get bigger though or get a investment round, and troll will come after you. It is not a coincidence that the company in the article's got trolls about the same time it's got an investment.
lccarrasco 13y ago
Somewhat unrelated, but what other countries have you considered? I wanted to open a US LLC to sell Android/iOS apps (my country is limited to free apps) but given that I can't open a US Bank Account (at this point) I've been looking for other options.
- slowdown 13y ago
  I haven't considered others, since India works well for me. There's not concept of 'class action suit' in India which makes it even more attractive for me. And there is very little capital involved too to start up a company - Somewhere like $50 max (for a proprietorship).
- cpursley 13y ago
  Look into a Nevis LLC or IBC. Pretty cheap to start ($2k USD) modeled after US Delaware LLC and they have a stable British based law system. Anybody who wants to sue you must post a $25k USD bond to the Nevis government before even proceeding. And this doesn't include the money they'd have to spend to fly down, hire a local attorney and then sue your company. http://www.nestmann.com/nevis-llcs/ http://www.nestmann.com/nevis-llcs/ Edit: I see you're from Bolivia. A Panama corporation might be a better choice for you. They'd have to first hire a translator to sue you : )
  - lccarrasco 13y ago
    Thanks for the info, I'll look into it : )
  - rfctr 13y ago
    > Anybody who wants to sue you must post a $25k USD bond to the Nevis government before even proceeding. Why would they do that? o_O They will file at their local US court. You're free to sell to Nevis all that you want -- but do not come with your product into US until the US litigation is won.
    - WildUtah 13y ago
      Right! US Customs will just confiscate your network traffic at the border.

rfctr 13y ago

Samsung was in South Korea. Apple blocked Samsung's sales in US based on patent issues. It doesn't matter where you're located. What matters where you want to do business.

studentrob 13y ago
Blocking business seems like an unusual step, or at least we rarely hear about it in the news. Is there any precedent for a patent case successfully blocking a business whose service is all on a website? If so, what happened? Did they simply take over the domain? What if a business used a foreign owned domain? I feel like there are options here that may not have been tried. Presumably a patent troll could try to tell your payment service and US based servers not to do business with you, but I haven't heard of that either, aside from credit card companies blocking Wikileaks and the US govt seizing servers suspected of hosting illegal stuff. I forgot why the US govt seized servers in VA a few years back but the point is that is pretty unusual too and I wonder how far a patent troll would go or how difficult it would be for them to get through all that. The only way China blocks Facebook, for example, is through a massive firewall, and their businesses generally don't accept any foreign credit cards. The US seems unlikely to put in a huge firewall or modify DNSs to go after small businesses for patent trolls..
- rfctr 13y ago
  Wikileaks blockade is a good example of the power that can be used when parties fail to come to an agreement. Most companies though prefer to settle out of court because the court is quite a gambling, that's why we do not hear it more often.
  - studentrob 13y ago
    Wikileaks is based in Sweden and was seen as threatening by the US govt. Companies that settle out of court are, from what I have read, small to medium sized US based companies that can face legal action if they do nothing. What I am talking about is a small company that is foreign based in a place that does not comply with US patents. Has there been one that has ignored US patents and been shut down by having their domain blocked or their US payments disallowed?
    - rfctr 13y ago
      In other words, is being small & poor a good defense against trolls? Yes, it is. Try to get bigger though or get a investment round, and troll will come after you. It is not a coincidence that the company in the article's got trolls about the same time it's got an investment.

lccarrasco 13y ago

Somewhat unrelated, but what other countries have you considered? I wanted to open a US LLC to sell Android/iOS apps (my country is limited to free apps) but given that I can't open a US Bank Account (at this point) I've been looking for other options.

slowdown 13y ago
I haven't considered others, since India works well for me. There's not concept of 'class action suit' in India which makes it even more attractive for me. And there is very little capital involved too to start up a company - Somewhere like $50 max (for a proprietorship).
cpursley 13y ago
Look into a Nevis LLC or IBC. Pretty cheap to start ($2k USD) modeled after US Delaware LLC and they have a stable British based law system. Anybody who wants to sue you must post a $25k USD bond to the Nevis government before even proceeding. And this doesn't include the money they'd have to spend to fly down, hire a local attorney and then sue your company. http://www.nestmann.com/nevis-llcs/ http://www.nestmann.com/nevis-llcs/ Edit: I see you're from Bolivia. A Panama corporation might be a better choice for you. They'd have to first hire a translator to sue you : )
- lccarrasco 13y ago
  Thanks for the info, I'll look into it : )
- rfctr 13y ago
  > Anybody who wants to sue you must post a $25k USD bond to the Nevis government before even proceeding. Why would they do that? o_O They will file at their local US court. You're free to sell to Nevis all that you want -- but do not come with your product into US until the US litigation is won.
  - WildUtah 13y ago
    Right! US Customs will just confiscate your network traffic at the border.