4 ms·
> the potential tax savings of incorporating in the US Whether there are tax savings at all also depends on your specific situation. If you're an employee, inc
by mjn 13y ago
> the potential tax savings of incorporating in the US
Whether there are tax savings at all also depends on your specific situation. If you're an employee, income taxes are almost certainly lower in the U.S. than most of the rich countries in Europe. But if you're starting a company or working for yourself, it depends a lot more on which U.S. states and/or European countries you're considering, and what kind of business you're planning to do (sector, number of employees, etc.).
Two places Europe can sometimes end up cheaper:
1. If you're a one-person sole proprietor. American income taxes are relatively high here, and the need to cover your own health insurance, disability insurance, etc. adds some extra expense and paperwork. Here are some numbers I estimated a few months ago for Silicon Valley vs. Copenhagen tax rates: https://news.ycombinator.com/item?id=6192339 https://news.ycombinator.com/item?id=6192339
2. If corporate income taxes are relevant to your business. There are ways to minimize their impact (especially if you're willing to pay for good tax consultants), but the headline rates are generally higher in the U.S. than in Europe, though rates vary widely in Europe so it depends on where you're considering in particular. Ireland generally has the lowest rates; in the U.S., NYC has particularly high rates (and some complex rules for registering businesses).
3. If you want to do your taxes yourself. American business taxation is nearly impossible to figure out correctly without professional assistance, and there are myriads of pitfalls and penalties.
One that varies a lot is "flexibility". My impression is that the French labor market is rather inflexible, and in general the American one is the most flexible. However on specific issues the American one is somewhat inflexible. There is a particularly big difference between "full-time" and "part-time" employment in the U.S., because the employer is expected to provide "benefits" (at least health insurance, often many other things) to full-time employees. In some of Europe the employer doesn't need to worry about these kinds of things at all (which also cuts down on the amount of HR you need to do). In Denmark it's relatively common, at least in tech startups, for people to work part-time schedules, e.g. 2 or 3 days a week.