5 ms·

Ask HN: Is there any country that allows foreigner setup their company online?

55 points by alansparrow 12y ago

Hello, I am living in South Korea and I am a foreigner. The procedures to setup a company in SK are quite complicated for me. I just want to have a legal entity to run my online business (SaaS), I would like to ask if there is any country that allows me to register a company online (with simple procedures). Thank you very much! P/s: This question is inspired by this one: https://news.ycombinator.com/item?id=8870593 So thank the author ;) I've heard a lot about some weird countries like: Luxembourg, British Virgin Islands.. where many paper companies are made for different reasons (tax evasion, law...), so I think anyone can register a company there with ease?

mtmail 12y ago
The UK limited allows that. There are many online services (law firms?) will help you for less than $100 USD. One of the first results I found http://www.ltdcompany.co.uk/company-formation/starting-a-ltd-company/ http://www.ltdcompany.co.uk/company-formation/starting-a-ltd...
- mariusandra 12y ago
  You can easily set up a UK company online, but you won't be able to get a UK bank account. However I was able to get my local bank to open an account for us when I presented stamped legal documents sent from the UK.
  - alansparrow 12y ago
    Thank you, this will be helpful.
  - danieltillett 12y ago
    Could you provide more details on what was involved? Was your local bank a branch of a UK bank? Are you located within the EU? What legal documents did you need stamped? Who were they stamped by and how much did it cost?
    - mariusandra 12y ago
      I opened an account with www.lhv.ee - a bank in Estonia (EU), which is my home country. We started a company, then ordered the incorporation documents, and then had them sent back to be apostilled. Then we forwarded them to the bank. I had also been in the bank office before to sign some paperwork and see what was possible. Starting a company was 200£. Apostilling the document was 30£. The cost of opening the bank account was 500€. Add some postage fees. Starting the company: http://www.companiesmadesimple.com/page1512en.html?namesearch=no http://www.companiesmadesimple.com/page1512en.html?namesearc... Getting the certificate of incorporation from them mailed. Apostilling documents: https://www.gov.uk/get-document-legalised https://www.gov.uk/get-document-legalised Bank we used: https://www.lhv.ee/ https://www.lhv.ee/
      - danieltillett 12y ago
        Thanks for all this. I suspect it is impossible to do outside of the eu.
  - abhimir 12y ago
    Would you mind sharing which bank?
    - mariusandra 12y ago
      https://www.lhv.ee/ https://www.lhv.ee/
- ascorbic 12y ago
  No need for that. Just go direct to the Companies House site and do it for £15. You can even pay by paypal. They'll email you the registration documents in about 48 hours. Laughably easy. https://www.gov.uk/register-a-company-online https://www.gov.uk/register-a-company-online
  - alansparrow 12y ago
    Is this only for UK citizen or anyone?
    - hackerboos 12y ago
      Anyone can incorporate in the UK but you need a registered office here which is usually arranged by a third party.
jreimers 12y ago
Estonia is trying to make this possible with their e-Estonia initiative https://e-estonia.com/component/e-business-register/ https://e-estonia.com/component/e-business-register/
- charlesdm 12y ago
  I've heard good things about Estonia as well. Don't forget, merely incorporating a company in a different jurisdiction will NOT mean it is resident there. Establishing companies in different jurisdictions can be a viable way to run (internet) businesses, but care needs to be taken in various areas. If you have limited understanding about business and international structuring, go with a South Korean company. If you want to use a foreign company, you will probably need to register it in SK regardless. Especially if you're the sole director/shareholder and running it from SK. 'Offshore' havens often serve very specific purposes, i.e. holding of assets or stakes in companies, as a tax neutral special purpose vehicle to easily structure a joint venture, etc If you take the foreign route, talk to a (South Korean tax) lawyer! That way, you can get it set up properly. You might get pummeled with fines otherwise.
- xrd 12y ago
  Looks like you need an id card, and it looks like this is something issued to Estonians. If the question is whether anyone (not just Estonians) can easily and quickly setup a company there, the answer looks to be no.
  - jreimers 12y ago
    You can become an "e-Resident" and receive an ID card. I believe this requires you to travel to Estonia once to get the card, however they are working on rolling this out to their embassies in other countries.
- skrebbel 12y ago
  The way it was explained to me is that you need to physically travel to Estonia once, to become an Estonian e-resident. From then on, you can deal with the Estonian government exclusively via the internet. You get access to a very large amount of the services they provide to their real citizens. Not all, of course, but starting a business is on the list.
gabemart 12y ago
I believe you can set up a company in Hong Kong online as a foreigner. Additionally, I believe that there is no corporate tax for Hong Kong companies that have no business presence or operations within Hong Kong.
- alansparrow 12y ago
  Does that mean I don't have to flight to Hong Kong and file application there? All I need to do is submit some documents online? It would be nice if you can give some more information (ex: website, etc..)
  - gabemart 12y ago
    I'm afraid I'm totally unqualified to give any more information than can be found by searching the web. It looks like you can do everything online and most applications are processed within one hour [1]. The minimum cost for a one-year registration looks like it's around 600 USD equivalent. My source for the statement about corporation tax is from PWC [2]. [1] http://www.investhk.gov.hk/setting-up-your-business/hong-kong-company-incorporation.html http://www.investhk.gov.hk/setting-up-your-business/hong-kon... [2] http://www.pwchk.com/home/eng/tax_hk_corptax.html http://www.pwchk.com/home/eng/tax_hk_corptax.html
  - derefr 12y ago
    There's usually no need to fly to any of these countries, no matter their laws. Instead, you pay a lawyer local to the jurisdiction to organize and file the paperwork for you. There are lawyers in Delaware whose whole job is this. For any given jurisdiction, there may even be someone offering to do it "online" (i.e. product model) rather than as a consult, presenting an interface equivalent to that of a government offering the same registration service.
LukeB_UK 12y ago
In the UK you can do it via Companies House for £15: https://ewf.companieshouse.gov.uk/runpage?page=welcome https://ewf.companieshouse.gov.uk/runpage?page=welcome Edit: Not sure about for foreigners though.
- bprieto 12y ago
  Yes, you can, both EU residents and out of EU residents. But you need an official address in UK (registered address) for your company, where Government can send you official mail. There are companies that give you this service, so it's not a big problem.
  - alansparrow 12y ago
    "There are companies that give you this service, so it's not a big problem.", can you list some companies who provide this kind of service?
    - Major_Grooves 12y ago
      I registered my UK company while I was living in Germany. I used these guys for my registered company address: https://www.smallfirmsservices.com/Default.aspx https://www.smallfirmsservices.com/Default.aspx I used their cheapest service (£80/year) for which you get the company address, and they will only forward mail from HMRC and Companies House - anything else gets returned to sender. We still use them, even though we have a trading address now.
      - zzzcpan 12y ago
        How easy it was to get a bank account?
        Major_Grooves 12y ago
        It was ok for me as I already had a UK domestic account and a UK address I could use, but I think from outside the UK this would be very difficult. I suspect your best bet would be HSBC as they operate an "international" model (supposedly).
justincormack 12y ago
You also need to make sure that having a foreign company will meet your requirements for why you want to have a limited company, under local law.
lotsofmangos 12y ago
UK, Isle of Man or Estonia.
comrade1 12y ago
Are you American? Have you tried contacting someone at the u.s. Chamber of commerce in South Korea?
- alansparrow 12y ago
  No, I am not.
rgbrenner 12y ago
I don't know SK law.. but would this really simplify things? Does SK allow foreign corporations to operate in SK without any paperwork? Seems unlikely.
- alansparrow 12y ago
  My business is a SaaS company so basically I can provide service globally, not necessarily just in SK.
  - rgbrenner 12y ago
    Ok.. but _you_ are in SK.. and I assume you'll be doing some amount of work on the service... that would often be enough to qualify as operating in the country. (Again, I don't know anything about SK law.. so I don't know if that's the case.)
  - charlesdm 12y ago
    That does not mean anything. You can transfer capital/IP/shareholdings/operations to lower tax countries and/or companies. However, if you're operating from SK, (simplifying things) you'll probably need to pay SK tax, and register your foreign entity in SK. The 'general' rule is that you pay tax where the people are, in this case you. This is not legal advice, obviously.
    - derefr 12y ago
      But it won't necessarily be corporate tax you're paying. You can set up a foreign corporation, with a foreign board and shareholders (this is a large part of the effect you get from "shell company" creation services), and then keep yourself listed as a mere contractor, rather than a full-time employee.
      - charlesdm 12y ago
        Yes, I know how it all works. Like I said, you can do it. But a proper fiduciary costs you a few grand a year, and at the same time limits what you can do with the company. It takes a whole lot of additional paperwork, and it limits you in certain respects (can’t take direct actions, as a shareholder you need to call for a foreign board meeting, etc). One thing you definitely can’t do is just run a BVI company as if it’s a local company, that will, in most jurisdictions (with a few exceptions, such as the UAE and Monaco), be illegal (fraud charges, etc) No problem if you’re holding shares through a foreign holding company, or you’re routing around millions in dividends to avoid withholding tax. They don't require much 'action' or operating. But, if you make a mistake (and face it, you probably will, especially if you don’t have good counsel), depending on the country you’re resident in, the fines are mind blowing. This all is even worse for Americans, with extensive CFC rules barring you from doing certain things. If this guy is on a student visa, he probably won’t have the resources to do this, and as such, it’s a bad idea to do this. As they say, setting it up is easy, getting away with it much harder. Again, this is not legal advice
danieltillett 12y ago
It is relatively easy to set up a company online in many countries, the difficulty is opening a bank account.
joeyspn 12y ago
I bookmarked this the other day. Check it out... http://www.1click2startacompany.com/ http://www.1click2startacompany.com/
womitt 12y ago
Our UK Ltd was registered in a day by evabookkeeping.co.uk after we've sent the documents, and we don't have anybody in our company living in UK.
silver1 12y ago
Read this fantastic blog ....matches your situation : it gives you info about everything (how to incorporate in USA, Physical address, Opening a bank account, cost etc.) .... GOOD LUCK! http://blog.freshdesk.com/how-to-incorporate-a-us-corporation-from-outs/ http://blog.freshdesk.com/how-to-incorporate-a-us-corporatio...
bikamonki 12y ago
Why do you need the company???
_rahuls 12y ago
Can I register my startup in UK without even going there with just £15. This sounds interesting but are there any complications or hidden stuffs that I should be aware of?
known 12y ago
Ireland does allow https://core.cro.ie/Main/index.jsp https://core.cro.ie/Main/index.jsp
rahimnathwani 12y ago
You are asking about setting up the company, but you will want to consider other factors as well: - Where can you open a bank account for the company? - What are the annual and periodic filing requirements (and fees) in regards to ongoing company registration (e.g. the Company Annual Return in the UK)? - What are the tax filing requirements and tax rates for your situation? - Do you annual company accounts need to be filed? Do these accounts need to be audited by a professional accountancy firm? Are there any exemptions from this requirement? - What are your own country's laws re: determining the domicile of a corporate entity, for the purposes of calculating tax?
mynewcompany 12y ago
Starting the company in the US is actually the easy part; getting a bank account and/or merchant account can add complications. We've created a checklist here: http://www.mynewcompany.com/international.htm http://www.mynewcompany.com/international.htm

derefr 12y ago
Hmm. One setup I've seen frequently as a Vancouver resident, is a Delaware shell company that makes all the corporate profits, employing a local Canadian engineering contractor (itself a company) that eats all the costs and gets paid only enough to exactly balance its books after salaries and such are paid out. Somewhat reminiscent of Hollywood movie "vehicles" vs. their studios. Which is to say, if the only thing going out to (or coming in from) the foreign holding company is the revenue—and you still do incorporate locally, but without any expectation of profits to pay taxes on—then it's still complex (even moreso), but less risky.
- charlesdm 12y ago
  You need a proper US board, consisting of mainly US residents, to do this, amongst other things. For example, if you’re a full Canadian company, with a top US holding (no operating income), that is fine. Also, if this is a VC setup, there isn't any money to be made, since you're making losses. Loss making companies aren’t really looked at, unless you're using those losses to offset profits somewhere else. In the end, it’s all about ‘corporate substance’, google it. I can set up a BVI company tomorrow, capitalise it with $5M, and use that to buy a boat - no one will care (in most cases). You can’t just have a ‘shell’ create operating income out of thin air (in most cases). Who is operating the business then? IP holdings, internal corporate banks, etc, all that stuff is much easier to do without significant substance. But running a SaaS company, completely out of Canada, without paying some tax in Canada, will be hard to do I think. You could have a US company own all the IP rights, customers, and everything related to the business, and then appoint an ‘agent’ in Canada to operate the SaaS business, and pay them a fee for it, for example. It's better for the agent to at least pay some tax as well. But you still need proper US substance to that. But you can bet, if you’re booking millions through a Delaware company that you’re just running from Canada, with no proper board etc, there is a real chance this gets challenged. That is, if they find out about it. Delaware might not be the best example, but if you replace it by a low tax jurisdiction (i.e. Cayman Islands, Jersey, Cyprus, etc), that gives you a better idea. Because, face it, why wouldn't we all have a Cayman company then? :) Also, different countries have different anti avoidance measures in place to combat this.
  - derefr 12y ago
    The times I've seen it done, it isn't that the Canadian company is actively running the business, but rather that it is in a position of doing work-for-hire contracted software development of a SaaS product which is then owned and "run" by the Delaware company (but, insofar as it is possible, runs itself and outsources things like customer support to third-party services.) The Delaware company may indeed need local agents, but those can be the same agents (i.e. lawyers) that run twelve other Delaware shells in a particular VC's portfolio. Effectively, the investors make up the Delaware company's board, while the founders of the venture (and the Delaware company itself) make up the Canadian company's board. You could think of it as the investors founding the company and simply outsourcing development to another country—which is, I'm sure, the argument that would be used to defend the practice in a suit. The important bit is that income flows into the Delaware company, not from nowhere, but from what are in all practicality customers of the Delaware company. The founders—although undertaking 99% of the company's day-to-day operations—are nowhere to be seen from a customer perspective.
    - charlesdm 12y ago
      Yes, that sounds reasonable. Well, in this specific case, you can probably argue that business (and not tax) reasons are at the heart of the decision. After all, the US corporate tax rate is higher than the Canadian one. But, the OECD is trying to combat some of these practices. Tax authorities in certain jurisdictions are now also disregarding directors who are sitting on 10-20-50 boards for substance purposes. Some countries also want them to have relevant skill sets, for example: can an ex real estate developer really be much added value for a pharmaceutical subsidiary company doing Ebola research? He might be, but many western countries are running an extreme deficit, so they are looking for all sorts of ways to increase revenue collection