
Why you might not want to incorporate in the USA - nitai
http://thenitai.com/2014/03/12/why-you-might-not-want-to-incorporate-in-the-usa/
======
philiphodgen
I am an international tax lawyer and this stuff is my day job. Consider this
comment an AMA.

For smaller companies, the bureaucratic cost of international tax systems is
insane. For US citizens abroad ... I will just say that my biggest area of
growth is helping people shed their US citizenship and tax paperwork/penalties
is the number 1 reason.

Anyway. If you are in a position like The One and Only Netai -- or don't want
to be -- AMA.

~~~
STRML
It's something I've considered. As a now resident of Hong Kong, I was
surprised - and delighted - with how incredibly easy it was to handle my
taxes. Front-to-back, I could do the whole thing, including payment, in less
than an hour and understand the whole system.

Unfortunately, it is nowhere near so simple in the US, and they have no regard
for expats. The US treats its expats worse than any other country in the
world. The forms are atrocious. And I could go on about being taxed heavily
for services I don't use.

Unfortunately, relinquishing citizenship is just not possible for most,
including me. With family and obligations, it's just not realistic. But it is
appealing.

~~~
philiphodgen
I think it is Clay Shirky who said something to the effect that bureaucracies
have every incentive to not solve problems. Otherwise the reason for the
bureaucrats' existence would cease. We won't see solutions from the US
government. Ever.

Yes the tax stuff is painful but as in your case there are reasons to keep the
citizenship.

~~~
bayesianhorse
Actually bureaucracy was invented to battle corruption. But back then you
really couldn't call it corruption, because without bureaucracy there were no
rules or laws that could be faithfully executed or their faithful execution
monitored. Kleptocracy and outright feudalism was the norm.

So in essence, without bureaucracy there is no corruption just as there is no
shadow without the light.

Whenever bureaucracy has to be simplified, keep in mind that the potential for
abuse usually increases unless the legislators take very much care.

------
workhere-io
As the article states, Denmark, while having high taxes, is very business-
friendly: Very little bureaucracy, almost zero corruption, English-speaking
population, relatively cheap apartments ($1,850 per month for a newly
constructed two-bedroom apartment in central Copenhagen) and very low expenses
of health care and firing people. Also, while wages are generally very high,
they're not high compared to Silicon Valley wages, which is an advantage if
you want to start a business here.

We rank as no. 4 on Forbes' list of Best Countries for Business
([http://www.forbes.com/best-countries-for-
business/list/](http://www.forbes.com/best-countries-for-business/list/)) and
as no. 5 on World Banks' Ease of Doing Business list
([http://www.doingbusiness.org/rankings](http://www.doingbusiness.org/rankings)).

So what's bad about doing business in Denmark? The cloudy weather (think UK)
and the personal income taxes :) The corporate tax isn't particularly high,
though (24%).

~~~
throwaway_yy2Di
How does that translate to software startups? I haven't seen many on HN, for
whatever that means.

~~~
Symmetry
I'd be very cautious about running a software startup in Denmark. If you
succeed great, but Denmark doesn't have the sort of easy bankruptcy laws the
US has and you have to pay your employees 6 months wages if you go under. So
if your startup fails you might be in debt for the rest of your life.

~~~
workhere-io
_Denmark doesn 't have the sort of easy bankruptcy laws the US has_

Lots of Danish companies go bankrupt without it affecting the personal
finances of the owners. It all depends on the kind of company you form.

 _you have to pay your employees 6 months wages if you go under._

Source? AFAIK, as long as your business is alive and well you pay a small
amount of money each month to an organization which will make sure that if you
go bankrupt, your employees will get paid anyway. This means you don't have to
pay anything if you go bankrupt.
[https://lifeindenmark.borger.dk/Pages/Compensation-if-
employ...](https://lifeindenmark.borger.dk/Pages/Compensation-if-employer-is-
bankrupt.aspx)

------
CalRobert
I really don't understand this fetishization of the US for business. If you
want to be sued into utter oblivion and live on the streets with a nonexistent
social safety net I guess it's all right. I'm in Ireland and if you want to
start a real business (not some rinkydink app that mysteriously needs €30
million in funding so you can fail more spectacularly) the climate seems quite
good.

~~~
dcc1
As someone who has been in business here since 2007, i would stop you right
there!

We have our share of a bureaucracy (example: took 6 months to get reply from
Revenue as to what VAT to pay or not on sales of hosting packages, 23% sales
tax (VAT) on customers from EU-28 was the answer eventually)

and you quickly realise there are 3 types of companies here:

1\. Large corporations setting up shops to launder money onto somewhere warmer
in Caribbean, these often dont hire many people or pay much in any tax despite
moving billions (example Apple in Cork)

2\. Small indigenous companies who dont receive much support, run by small
families who never really grow to become large companies EU or worldwide, ask
anyone outside of Ireland to name an Irish company beside Ryanair! And no
Guinness are UK company

3\. Zombie companies still clinging on from the haydays of the last boom,
supported by taxpayers bailing out the banks, surviving thanks to the inbred
gombeenism that is still prevailent despite the largest recession in any of
the developed countries since 2007, see this great lecture
[https://www.youtube.com/watch?v=8LCofepdUzE](https://www.youtube.com/watch?v=8LCofepdUzE)

~~~
luser
Sorry, I have to disagree. I have run a small software consulting business in
Dublin for nearly ten years. The one thing we get right in this country is our
pro business climate. It is easy to set up a company, there is a lot of
support and advice available. I think we do this well...

Two caveats though:

\- You DO need to get a good accountant to get advice on international VAT
charges as they are complex (I suggest bypassing them by using a company like
FastSpring that manages them on your behalf).

\- Small business owners should have the same social welfare security net as
everyone else (I think this might be changing).

I agree with you on the inbred gombeens and cute hoors, but thankfully there
seems to be less of them in the tech sector :)

~~~
dcc1
re: fastsrping

"You have the option to pay either 8.9% flat or 5.9% plus $.95 per
transaction. "

Wowza, thats steep!

edit: Sorry but experience has been different here in west, in another
lifetime I worked on an "innovation partnership" with EI, it was nothing more
than a way to funnel state money to politically connected "friends", the
business idea was crippled from day 1 but that didnt matter the objective was
transfer money, which as as a taxpayer was sickening.

Sorry for being cynical but I have many years of experience in business here,
and seen it all in my interactions with state bodies. Maybe in Dublin they
manage to put on a better show or things changed in last few years.

~~~
dleskov
> re: fastsrping

> "You have the option to pay either 8.9% flat or 5.9% plus $.95 per
> transaction. "

> Wowza, thats steep!

FastSpring customer here.

First, they handle lots of boring and complicated stuff for you, not just
taxes. How much would it cost you to accept all major credit cards, PayPal,
checks and (international) wire transfers, and provide customer service for
all of those transaction types?

Second, if you sell the more expensive B2B stuff like we do, and/or sell lots
of your stuff through them, you can ask for a custom rate.

~~~
dcc1
I see, still thats quite a bit especially when need to hand over a large chunk
on any sale from Irish/EU28 customers in tax!

Currently working with Elavon for credit card payments (cant disclose exact
rates, but much cheaper than Stripe),

completely avoiding Paypal who can go and f&*k themselves,

and getting several of the larger customers to pay via SEPA bank transfer or
bitcoin which have nearly no fees.

~~~
dleskov
> I see, still thats quite a bit especially when need to hand over a large
> chunk on any sale from Irish/EU28 customers in tax!

I am not sure I understand what you are talking about. If we set the price at
$1K, we get from FastSpring $1K minus their commission, whether the customer
has paid the EU VAT or some sales tax on top of that $1K or not. And it is
FastSpring that does EU VAT remittance.

------
alexeisadeski3
Whilst I do not wish the hell that is American business regulation on anyone,
I am at least happy to see some Europeans realizing that America does in fact
have more onerous regulation, all things considered, than nice nations like
Denmark.

Scott Sumner of Bentley University, in Boston, has written on this topic quite
a bit. Sumner, in fact, considers Denmark _the most free market oriented non-
postage-stamp nation on earth_. A sample:

On taxes:
[http://www.themoneyillusion.com/?p=24759](http://www.themoneyillusion.com/?p=24759)

On regulation:
[http://www.themoneyillusion.com/?p=21601](http://www.themoneyillusion.com/?p=21601)

On inequality:
[http://www.themoneyillusion.com/?p=22400](http://www.themoneyillusion.com/?p=22400)

~~~
mjolk
>"than nice nations like Denmark."

Qualify what you mean by "nice."

~~~
randallsquared
On the next line, he did: "the most free market oriented non-postage-stamp
nation on earth".

~~~
levosmetalo
What is a postage-stamp nation then?

~~~
workhere-io
Tiny nations such as Monaco, Liechtenstein, The Vatican, San Marino, Andorra,
etc.

~~~
astrodust
A lot of Americans, having been denied a proper geography education, consider
Europe itself to be a postage stamp.

If challenged they'd probably assert the whole thing was smaller than Texas.

------
beagle3
And ... the article doesn't touch on it, but that goes triple on personal tax
issues -- especially if you do not sever your ties to your previous states of
residence.

The US tax code, as evidenced by FBAR and FATCA, assumes that the only purpose
of any financial transaction or account outside the US, is to hide money from
the IRS. You have to report each and every "account", with contact details at
the institution, every year, on two independent forms (similar yet different),
as well as every transaction in securities (if you can actually do them
anymore - most places won't even let you if they know you are paying taxes in
the US).

If you are not a US taxpayer already and planning to do anything in the US, be
sure to talk to a CPA that specializes in those kinds of things (preferably,
one who is also familiar with the treaties and tax code in the country you are
moving from). You need to do this both on the business front and the personal
front, or you are likely to be seriously and horribly surprised one day.

~~~
CaptainZapp
That's actually a huge problem for US citizens living in Switzerland.

Since the US nowadays puts so much pressure on Swiss banks most - if not all
of them - are extremely reluctant to open bank accounts for US citizens.

~~~
nitai
It is not only an issue for US citizens, also for people who have been with
the same bank for 30+ years and now leaving abroad. You can either pay tones
of fees and at least have $50k in the account or you are forced to take your
money elsewhere.

Luxembourg and Lichtenstein will gladly take you money, though ;-)

------
yardie
* You could have saved yourself a load of headache and incorporate in Delaware.

* If you don't have a physical office in each state you don't have a presence there. You shouldn't have needed to pay sales tax. Amazon only pays taxes in states they have a physical presence (warehouse, office, callcenter).

~~~
clarkevans
Hiring an employee in another state may create a nexus in that state, and this
may require you to file income tax in that state.

For example, if you incorporate in Delaware, and then hire someone for >$50k
in Texas, you may have to file company income taxes in Texas. Not that Texas
income attributed to your company (or partners) will be much, but, computing
and filing is best done by hiring an accountant.

~~~
davidw
I'm not sure about EU law - but if you have a company in Denmark, and want to
hire someone who works in Portugal as a permanent employee, and not a
contractor, what do you need to do?

~~~
Spearchucker
Not sure about Portugal but suspect it's not much different than other
European countries. When I did a freelance job for Nokia in Berlin I
effectively worked for a Swiss company, which sent me off to Berlin. I
registered myself in Switzerland, got a social security number there, and paid
my income tax in Germany. As far as I understand it, Nokia paid the Swiss
company, who paid their tax in Switzerland. Much as you'd expect - you (be it
an organization or an individual) pay tax in the country in which you're
situated.

~~~
davidw
What you've described is kind of complex. I'm asking about where someone lives
and works as a _permanent employee_ (and not a contractor!) in Portugal or
Germany or whatever, for a company that is in Denmark.

~~~
masklinn
As far as I know/understand the company would pay its own taxes in Denmark
except for employment-related tax, they'd have to abide by portugese laws for
those (e.g. social security schemes and the like) when in comes to the
contract of that specific employee.

------
dan_bk
> In the US, however, it’s like being in the 70’s in Denmark. In a country,
> where the NSA supposedly reads all my email, knows how much money I make,
> what I ate for breakfast and what color underwear I prefer, I cannot report
> electronically to the authorities!

Well, the plan was to keep the incredible advancements in (mass surveillance)
technology secret from the citizens, in order not to be stopped.

~~~
vixen99
'I cannot report electronically to the authorities!' \- I am amazed. In the
UK, individuals and virtually all companies and organisations must file their
Company Tax Returns online.

------
slowdown
Call me stupid, but the only reason why I incorporated an LLC in the States is
because I wanted get access to the Stripe API for production (yeah, it's a
huge compliment to the Stripe guys ;)

The payment gateways in my country are shit..Also, the US account is only used
for the payment gateway, all the IP of my software is owned by the company in
my home country. You know, just so someone doesn't sue me for rounded corners
and having anchor links on my webpage, stuff like that.

So far so good, I just report EFI (Effectively connected income) to the IRS,
which means only the businesses that I do with USA, all signups from other
countries aren't taxed by the IRS believe.

~~~
nitai
I hear you. The payment gateways in DK simply suck. However, Braintree and
Stripe are now all over Europe too.

------
oesmith
Is this a test of whether anyone actually reads these articles? Every 3rd
paragraph has a viagra spam-link inserted in the middle of a sentence.

~~~
darklajid
> Is this a test of whether anyone actually reads these articles? Every 3rd
> paragraph has a viagra spam-link inserted in the middle of a sentence.

Eh.. What? Are you commenting on the wrong article by chance? I don't see any
of that. If you're even remotely serious I'd take a good look at your
machine/system.

~~~
oesmith
I'm reading on an iPad, so the risk of system infection is negligible.

However, I just switched on my home VPN and the links disappeared. Time to
talk to someone in netops, methinks.

~~~
oesmith
Looks like a hacked wordpress install.

[http://wp.smashingmagazine.com/2012/10/09/four-malware-
infec...](http://wp.smashingmagazine.com/2012/10/09/four-malware-infections-
wordpress/#pharma-hack)

------
brador
So where's the optimal location to setup a no-physical-location-required
business?

I've heard Hong Kong, Singapore, Delaware...any thoughts?

~~~
dragonbonheur
Mauritius: the best place to do business in all of Africa. Good connectivity,
great tax rates, no corporate gains tax, awesome beaches.
[http://www.investmauritius.com/](http://www.investmauritius.com/)

~~~
enko
Interesting option. However, the "invest mauritius" website isn't even loading
for me, which perhaps isn't a good sign for this "good" connectivity...

------
hartator
I had a similar experience.

I run a france-based company specialized in online advertising and I wanted to
expand our activities to the US, who does not? Obviously France is way worst
than Denmark and the US for business, tax and work laws, so I can't really
relate for the tax part.

I relate mostly for the visa stuff. What I am getting from the OP post, Nitai
was doing L1-A. I have been doing L1-A too. (I recognized the list of
documents scanned the OP has posted! :) ) Same hassle, same huge amount of
documents needed, we didn't give up though after the first request for
evidences but the requirements are kind of high so we finally didn't get it.

US now sucks for immigration and it seems to worsen. BUT, Europe seems harder
too than before for immigration. It seems a tendency that in the world with
Internet, cheap transportation and desire for better file, people immigrate
more and countries make stronger bureaucratic walls.

That's sad. :'(

~~~
dusanbab
Sorry to hear L-1 was unsuccessful for you. Care to share what the eventual
denial reason was?

------
runewell
Yeah, our tax/employment/visa system sucks, although European rumors of our
impending demise are greatly exaggerated. If you're not from the USA it is
understandable that you may not be aware of the nightmare that is our state
legislation. Our states are like grumpy siblings in the big dysfunctional
family we call our nation. They each have their own method of handling
taxation and employment and each have their own irrational set of processes.
As a nation we could certainly improve the way we handle such matters.

------
ari_
A lot of this could have been solved by (pick a few):

1\. forming a 1099 relationship with your devs if they weren't working full
time.

2.Using a Personal Employment Organization.

3\. Doing your research before blindly incorporating in Texas. We could debate
for ages the merits of the state and federal system, but if you were going
down this whole road of opening a company in another country and hiring there,
then it would have been useful to talk to a tax lawyer and an accountant who
are familiar with the issues involved.

TLDR;Europeans whining about things they didn't research, again.

~~~
nitai
Who said we didn't get professional lawyers and CPA's?

~~~
ari_
if you did then please name them so I know not to use them. Hiring employees
in other states should be bread and butter for any tax accountant working with
businesses.

~~~
scott_karana
As I read the article, hiring the employees wasn't the issue at all.

Nitai was just aghast that the laws were so strange.

------
dusanbab
I think the frustration with the various state differences is less
interesting, to be honest. That's part of what makes the US great IMO - states
have to compete with each other as people and businesses can vote with their
feet.

The difficulty you encountered during what I would have thought should be a
routine L-1 is most concerning & perplexing. I really never understand this
point - more than a million new green cards were issued in 2012 [1] but you
can't even easily get a temporary work visa.

To make matters worse every year 50K new green cards are issued to completely
random people, I mean it's a lottery after all [2]. Why does the US want to
hand out residency en masse and then stop people who can create jobs and grow
the economy? As an outsider looking in I would think you're getting the worst
of both outcomes.

I don't believe there is a good answer. Regrettably decision making has become
so paralyzed in the US Congress and Senate and the whole machine only exists
to serve itself.

[1] - [http://www.voanews.com/content/us-issues-million-green-
cards...](http://www.voanews.com/content/us-issues-million-green-cards-and-
naturalizes-757000-in-2012/1627155.html) [2] -
[http://en.wikipedia.org/wiki/Diversity_Immigrant_Visa](http://en.wikipedia.org/wiki/Diversity_Immigrant_Visa)

Edit: references

------
EGreg
"In Europe, you can live in whichever country you like. Most countries here
seem happy to receive taxes."

I think the analogy is the same for states in the US - yo can live in any of
the states and they'd be happy to collect your taxes. When your business has a
substantial business presence in a particular state, it expects you to start
reporting there.

States in the USA are like countries in the EU, except they all have the same
language and restaurant chains.

------
a3n
> We sent endless amounts of documents, translated documents, notarized
> documents and copies of this and that. ... a detailed list of all
> transactions from our Danish bank accounts for the past 3 years. ... our
> lease agreement for the office. ... pictures of the office from the outside.
> in Denmark and the USA. ... pictures of the inside – and we needed to make
> sure that the pictures had employees in them. We had to get the main lease
> agreement from our lessor to prove that they could actually sublease to us.

> ... We needed to explain, why we needed the space. We needed to explain, why
> we didn’t need more. Then why we didn’t need less. Then we had to send
> copies of all Nitai’s diplomas. Then we had to explain, why nobody else
> could run the operation in the USA for us.

I've read that we do this shit to make sure that people don't come here and
take advantage of the business and benefit paradise that we've created.

I have this picture of the US as a 1970s asshole dressed in a leisure suit,
wide collars and bell bottoms and a vest, who think's he's God's gift to
women, where actually everyone is laughing at him for the clown that he his.
And he rarely gets laid, despite bragging to the contrary.

------
bayesianhorse
Here in the EU the EU has a reputation for being extremely bureaucratic and
hard to fathom. As the writer points out, you ain't seen nothing. Just imagine
28 members plus privileged partners agreeing on regulations for international
trade through bilateral agreements.

And probably every policy that is less bureaucratic is either quite small or
has bigger problems with corruption.

------
gopi
Hmm, Seems the Google Cache version of this article is full of viagara links?
-
[http://webcache.googleusercontent.com/search?q=cache:xBaBObi...](http://webcache.googleusercontent.com/search?q=cache:xBaBObiy8FMJ:thenitai.com/2014/03/12/why-
you-might-not-want-to-incorporate-in-the-usa/+&cd=1&hl=en&ct=clnk&gl=us)

~~~
nitai
Cleaned it up. Should be fine by now. But still working on it.

~~~
gopi
What was the problem?

~~~
nitai
It looked like someone got access through a plugin to the htaccess file and
some db entries.

This article helped ([http://blog.sucuri.net/2010/07/understanding-and-
cleaning-th...](http://blog.sucuri.net/2010/07/understanding-and-cleaning-the-
pharma-hack-on-wordpress.html)) though I only found one db entry. However
fixed the htaccess file.

~~~
aiiane
Unfortunately there's still stuff there when viewed from a Google IP -
[http://i.imgur.com/59qW1EM.png](http://i.imgur.com/59qW1EM.png) (Source: I'm
currently at my desk, at Google.)

~~~
nitai
Done just about everything and can't get get it out. Funny is that it only
exists in this one article. Rest of the site is ok.

------
dleskov
Solely from the taxation perspective, my home country now looks surprisingly
friendly for small IT businesses.

We have a so called Simplified Taxation System for small businesses (not just
IT.) Basically, as a company we can choose to pay either 6% of annual revenue,
or the bigger of 15% of profit and 1% of revenue. That's it, no VAT or
anything.

As far as wage taxes go, there is a 20% Unified Social Tax charged on the wage
amount before income tax. Moreover, there is an annual cap on that tax, which
a senior developer in a big city is likely to hit as early as mid-year.
Otherwise, small IT businesses can qualify to lower that tax to 14%. All
that's left after that is the income tax - 13% flat.

Which country you would ask? Russia. That's why I wrote "Solely from the
taxation perspective" in the opening statement...

------
mjolk
> All of a sudden, we were forced to figure out, how much we actually sold in
> each of those states, where we hired people

Not to be offensive, but differences in state rules should have been expected,
given the name of the country. How hard do you think it would be to get a
random sample of 50 people to decide on a movie? Now swap people with
territories and movie with governance.

This blog post is just ranting and whinging that some paperwork had to be done
when starting a business on foreign soil.

I worry about the quality of Razuna as a product if attention to filling out a
form is a huge ask.

~~~
tankenmate
After having done business in many other countries you begin to realise that
certain countries have a love affair with needless bureaucracy; the US and
it's fragmented federation being one of them. Take Australia for example; even
though it is a federation of states (and territories) like the US it has one
uniform goods and sales tax that is consistent across the country. In fact
states regularly come together to share best practice between legislation and
administration in order to increase efficiencies within the country. Even road
laws (which are a state matter in Australia) have been deliberately
homogenised between states. Even countries like the UK with it's constituent
nations and territories work hard at having a uniform and efficient system for
businesses to do what they need to do.

Saying "Just deal with it" is a cop out that will end up consigning your
country to a worsening economic future. Tourists are already turned off from
coming to the US because of the TSA issues. Having a "Just deal with it"
attitude will also drive away business. This will lead to a worsening trade
imbalance and the joys that come forthwith.

~~~
mjolk
While this thread is bound to fill with anecdotes...

> Tourists are already turned off from coming to the US because of the TSA
> issues.

I'd love to agree with you, but there's that pesky reality that disagrees with
your claim:

[http://cityroom.blogs.nytimes.com/2012/12/31/a-record-
year-f...](http://cityroom.blogs.nytimes.com/2012/12/31/a-record-year-for-new-
york-tourism/?_php=true&_type=blogs&_r=0)

>Even countries like the UK with it's constituent nations and territories work
hard at having a uniform and efficient system for businesses to do what they
need to do.

Population UK: 63mm Population USA 310mm

and support your claim that the territories work hard at having an efficient
system for businesses.

> Having a "Just deal with it" attitude will also drive away business.

The paperwork really isn't hard. What makes you think that filling out some
tax forms is keeping people from opening up shop in America?

~~~
beagle3
> The paperwork really isn't hard.

Yes, it is. Many of my friends are business owners, most of them have some
international business. I've been in touch with a variety of tax professionals
in different countries through the years.

In the last 10 years or so, I've seen more than one business or partnership
outside the US state in its charter that "shareholder may not be a US tax
payer, and may not sell his shares to one, and will sell his shares to someone
who is not if he becomes one", because of how complicated it makes things.

If you think US paperwork is sane or is not hard, it is probably because you
did not have enough exposure to it, or alternatively, not had exposure to a
saner system.

Objectively: US Federal Tax code is >71,000 pages (as of 2009 when I checked -
probably longer now). And it applies to every american. NYS tax code is some
15,000 more pages; if you are doing significant business in NYS, that's about
10 times as many details to be aware of than in any other country that I'm
aware of.

~~~
nitai
Spot on ;-)

------
cbp
So if I'm neither american or european. Is it actually easier for me to move
to europe, get a visa there and start an european company than an american
one?

~~~
tormeh
Probably easier in Europe, is my guess. Few first-world countries are worse
than the US. Note that the EU is not a uniform place, so you need to do a bit
of research on which country you want. As noted previously, the Scandinavian
countries are good places to start. They all speak English as well, knowledge
of the relevant Scandinavian language is not required for basically anything.

I would assume the same is true for Switzerland and The Netherlands. Think
twice before going for Germany (a popular choice for many good reasons not
including bureaucracy) and don't even consider the southern countries.

------
wathars
So seeing all these problems, how are YC companies solving them or better yet
how do they handle the whole process to avoid this? PG said they are
incorporating in Delaware but their offices most probably are in CA. Shouldn't
this be a problem being in different states? Or it applies only to foreign
related companies? Thanks.

~~~
ghaff
It's pretty common to incorporate in Delaware even if you have little or no
physical nexus there, for a variety of reasons:
[http://www.newsworks.org/index.php/local/brandywine-to-
broad...](http://www.newsworks.org/index.php/local/brandywine-to-
broad/18206-why-do-so-many-corporations-choose-to-incorporate-in-delaware).
This probably applies more to large companies though. I imagine there's some
overhead relative to incorporating locally if you're a small business.

What constitutes a physical nexus can be a bit hard to define at the margins.
(See e.g. Amazon's fights with a number of states.) But it usually means
you're selling something there as opposed to just having employees. A physical
nexus usually just relates to collecting sales taxes though. I've never heard
of having to incorporate in additional states although maybe that's sometimes
the case.

(I know that the small NH company I used to work for certainly didn't
incorporate in additional states when they hired non-NH residents. They DID
have to handle state withholding on payroll but that sort of thing is handled
pretty transparently by payroll processing companies like ADP.)

------
esbranson
Riiiight. Because you can do the same in the European Union and get less
paperwork, in one language? How do you comply with Spanish and Italian
employment requirements, by registering and filing paperwork with Danish
employment authorities, in Danish? That's hogwash.

------
chetanahuja
As a US based startup founder, this was an illuminating read. And this part in
particualar is brilliant:

"I immediately sent an email, to nobody in particular, asking the NSA to get
those tax figures themselves and pass them on to the IRS"

------
dude3
Denmark's defense budget is really small 3.2 % of government spending vs 18.2%
for the United States. Therefore, Denmark has much more cash to spend and is a
richer nation relying on US for defense.

~~~
vacri
The US gets considerable economic and political advantages from that defence
outlay. It's quite normal to park a fleet outside someone's capital (in
international waters) as a show of political force. It's still a ridiculously
high percentage, but the concept of the World Cop needs to be put to rest.
It's more like World Vigilante Strongman.

------
davidw
It's indubitable that the nordic countries are well-run places. Occasionally
though, the amount of "smug" they export is a bit on the high side.

~~~
tomelders
Is being frustrated and correct the same as being smug?

~~~
davidw
Smug doesn't mean _wrong_ , it means being a bit loud proud about being right.

~~~
chris_wot
Sort of like this:

[https://www.youtube.com/watch?v=JD9d0ZrBnLE](https://www.youtube.com/watch?v=JD9d0ZrBnLE)

------
mamcx
My biggest hurle is payments processors. Everything good work in USA (think
stripe).

So, if not USA, when? That make possible to be in latinamerica but be
incorporate elsewhere?

~~~
workhere-io
[https://www.braintreepayments.com](https://www.braintreepayments.com) is just
as easy as Stripe to use, and can be used in Denmark and other European
countries right now. Stripe is coming to Denmark soon and is already in
several other European countries. I don't see the problem?

~~~
mamcx
"to be in latinamerica"

I'm in a dark corner on the planet on this...

~~~
workhere-io
[http://adyen.com](http://adyen.com) might work for you.

~~~
mamcx
The website look truly dated, and they not answer the emails.

------
tempodox
The requested URL /2014/03/12/why-you-might-not-want-to-incorporate-in-the-
usa/ was not found on this server.

------
yashg
How big a threat are patent trolls while incorporating in the US? Companies
get sued for scanning and emailing documents!

~~~
teachingaway
Its not incorporation itself that attracts patent trolls. They go after the
scent of money. Like, after you announce a round of funding, a troll will
suddenly realize you are 'infringing' on their patents.

------
karangoeluw
Any ideas on how it would work if I inc in India, but operate in the US (I'm
in the US on F1 visa)

------
darksim905
This article is funny. Makes it sound like the USA is all complex, in the
stone age, etc. I lost it at the green card part/to work in the USA was
hilarious as the USA grants so many of those it isn't even funny. That's the
whole point of people in this country complaining that foreigners take our
jobs.

------
jdimov
Spot-on. Also, don't get me started on mobile internet and broadband. Every
time I go to America it's like going to a 3rd world country.

~~~
kartikkumar
By definition the US can't be like a 3rd world country (hint: 3rd world
country is not what I think you mean to say [1])

[1]
[http://en.wikipedia.org/wiki/Third_World](http://en.wikipedia.org/wiki/Third_World)

~~~
Orangeair
Since we're smugly throwing around Wikipedia articles:
[https://en.wikipedia.org/wiki/Simile](https://en.wikipedia.org/wiki/Simile)

~~~
kartikkumar
Had you seen my body language when I posted the comment, you might not have
decided that it was made out of any sense of smugness.

NOTE:

Since my comments in this thread were downvoted, implying that they were not
taken in the spirit they were intended, my contribution to this thread should
be considered obsolete. I'll leave my original comments in place to serve as a
reminder to myself to be careful about what I say around here in future.

[OBSOLETE]

~~~
arjie
No need to play the martyr. It's a tangential issue. If you brought it up in
conversation people would say something like "ha ha yeah, you know what I
mean" and continue discussing the original topic.

There it quickly dissipates because voice is quickly damped but here it is
just noise that takes time to be damped out.

~~~
kartikkumar
I absolutely am not playing the martyr. I raised an issue that I felt was of
importance. The fact that others disagree is something I'm willing to live
with, but it by no means sways me.

------
clouds
You can't just buy 'Murica with money!

------
elf25
why are there a lot of links in this article referencing cialis? Site been
hacked?

------
xvirk
whenever someone is boasting about how the scandinavia is a paradise I'd
suggest reading this article in Guardian

[http://www.theguardian.com/world/2014/jan/27/scandinavian-
mi...](http://www.theguardian.com/world/2014/jan/27/scandinavian-miracle-
brutal-truth-denmark-norway-sweden)

~~~
a_bonobo
There's a good follow-up to your article, where 5 writers answer:

[http://www.theguardian.com/world/2014/feb/05/scandinavian-
mi...](http://www.theguardian.com/world/2014/feb/05/scandinavian-miracle-
denmark-finland-iceland-norway-sweden)

