Ask HN: What is the best jurisdiction for internationally distributed teams?

Based on your description, your goals are predictability and low or outsource-able overhead. For those goals, the US is the clear choice. By far the largest pool of investors and employees are comfortable with US entities as counterparties. Plenty of companies will incorporate, prepare tax returns, and handle other compliance items (unemployment insurance) for relatively small fees.

As far as states, if you don't care, Delaware is probably the most common. Nevada and Wyoming have no state corporate income taxes, so they are also popular. More on that: https://www.forbes.com/sites/forbesnycouncil/2019/03/04/the-... . To incorporate, check out Firstbase (https://www.firstbase.io/) or Stripe Atlas.

Most US companies will hire remote "inside the USA" but not outside the USA due to potential foreign tax and legal liabilities. While the USA might be good for the reasons you listed, hiring remote full-time employees can be a legal minefield. If every employee is a contractor then that introduces its own legal issues in the USA.

> Most US companies will hire remote "inside the USA" but not outside the USA due to potential foreign tax and legal liabilities.

That’s not a unique feature of the USA. It doesn’t matter what country you’re incorporated in. You’re still obligated to follow the local laws and tax codes of any foreign country you hire in. Technically some companies (shady crypto plays especially) will try to incorporate in a weird location and then flaunt laws and pay people “under the table”, but they’re just breaking those laws, not escaping them.

There’s a company called Deel (I’m a customer) that can take a lot of the pain out of this including being the employer of record in many countries. There are others as well.

http://letsdeel.com

Same, have had a good experience with using Velocity Global for employees in other countries (EU and International) https://velocityglobal.com

They could always use an employer of record for the foreign employees like remote.com

The Delaware tax is pretty low. Stick to Delaware as it’s corporate law is well known to everyone. The state of incorporation has nothing to do with where you might operate.

Keep it simple.

Note that I am part of an LLP that a group of us use for investing and consulting projects and it’s a Wyoming corporation with company office in Kentucky and no legal presence in California. These kinds of specialized entities are not worth the hassle except in unusual cases, and almost certainly you aren’t a specialized case. For example this setup doesn’t have much of a benefit for me (though it doesn’t hurt) but it does for a couple of my partners. Also: I don’t mind paying taxes.

There’s nothing specialized about incorporating in Wyoming. And it takes minutes without a lawyer. The amount of paperwork is ridiculously low compared to Delaware. Last I recall Delaware has a minimum $500/year registration fee, more depending on outstanding shares. Not Wyoming.

You'll also need to consider "alien entity" fees/taxes if you want your "Delaware" corporation to operate in another state, e.g. Texas.

Such fees are basically nothing for a company that makes money

High % taxes are where things get way dicier, e.g., some US states have high capital gains / transaction taxes while others are basically 0, which vastly changes how good exits are for employees

"Penny wise, pound foolish" => optimize for low opex overhead on growth. Another example: $1K to setup a new state registration for an employee sucks, but is fine relative to their salary, so not the the # to optimize on.

The annual filing fees and documents required by Delaware is arcane. Things like “annual meeting of the shareholders” for a single-person S-corp.

Are you saying that Wyoming doesn't have those requirements?

On this note, if you're forming a company in the US and some of the owners/founders are not American, be sure to get an accountant and lawyer in the US to confirm your compliance with US foreign ownership laws.

What if you're located outside of the US but a US citizen?

Be careful regarding taxes and "Betriebsstätten". If you are living in Germany and your company management is mainly operating in Germany you are liable still for local taxes ("Hinzurechnungsbesteuerung"). There are also special rules depending on how much of the company stock you own. Also you may have to register a "Gewerbe" in certain cases if you are doing business in Germany (e.g. selling something) from a foreign entity.

So in a bad case as majority owner you will then have to do the taxes and other admin topics in the country of your company AND in Germany and you'll always have a special relationship with a curious tax office.

So the only way to have really a startup in a non-German jurisdiction is to make sure that your management decisions (and usually also some infrastructure) is set up there.

I recently had to consider this and was quite surprised to discover that the US was the best place. Compared to most countries the US has been a tax haven for a long time, but the 2017 tax change meant that in most cases the US would be a significantly cheaper place to recognize revenue.* Also the mechanics of getting the boring things done is significantly easier, as noted by the Germany post cited in your question.

Because of the US FATCA law you may have trouble opening a bank account in some countries (smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”, a term which has specific meaning). In practice this just means you have to deal with larger banks.

Note I’ve been a US resident for decades, and started several companies here, but am not a US citizen and have lived and worked on three other continents as well so had no prior bias.

* Note 2: this business is intended to be quite profitable relatively soon, rather than a “focus on user growth and toggle the profit switch later business.

> Because of the US FATCA law you may have trouble opening a bank account in some countries (smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”, a term which has specific meaning). In practice this just means you have to deal with larger banks.

You mean opening a bank account personally or for the company? Because for the company I'd simply use Wise or Mercury and be done with it.

Australian here. When I open a commercial bank account (i.e., company) here the FACTA regs mean I have to jump through a bunch of hopes to prove I’m not a US person, and neither other the other shareholders. And then I have to re-prove it every few years after it’s opened.

Commerzbank terminated my contract after 14 years as a loyal customer (and plenty of money in the account) — they refused to say why, but my best guess is they were culling Americans.

I think getting a German bank to open a business account for a U.S. startup would be a nightmare at best.

Last time I looked it's hard to use something like Wise as your bank for your payroll.

Wise has been great for managing my personal payments, but I still have personal bank accounts in a couple of countries where I hold property because it just makes things easier there.

I believe they are referring to the concept of corporate personhood. FACTA applying to "US persons" means it applies to corporate accounts too.

> smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”

That only counts for companies with operations in the US. My wife is a US citizen, and my bank - a medium-sized Danish bank - did not care, because they don't operate any business in the US, so they do not need to provide any paperwork for her to US authorities.

Not an attorney, not a tax attorney, not your attorney, but US persons are required to report bank accounts they hold globally under both FBAR and FATCA, and signatory authority on business accounts is also a thing. Additionally, controlled foreign corporations are a thing for US people.

I'm also not a lawyer or CPA, but I believe if a US person is a partial owner in a foreign corporation, the company is required to do their accounting by GAAP standards. So, if the company is in a country that follows IFRS standards, it would have to do their books twice.

One thing to note if, as a Dutch person (and possibly even if you're another European), you incorporate in the US:

Many Dutch financial institutions hate people who have the "US person" status. If you own a US-incorporated company then I believe you will gain that status. Banks, lenders, stock brokers, etc will either refuse to do business with you, or will give you a lot of paperwork headache and/or charge you more tax. I think this has to do with the fact that US persons have to comply with FACTA.

For example I have 3 stock brokerage accounts (1 for personal, 1 for pension, 1 for business). They all ask me whether I have the US person status, and 2 of them just flat out tell me that they won't do business with me if I answer yes.

Not sure whether financial institutions in other European companies also come with this caveat. But since it's related to FACTA, I believe they do.

I am indeed another European and I do know about the issues with being a "US person". Many banks and brokers will simply immediately close your existing account or not allow you to open one.

However, are you sure that simply by owning a US company you become a US person? Because according to my understanding if you don't live in the US (and don't spend more than 4 months / year there) you wouldn't actually be tax resident in the US and therefore also not be a "US person".

Wow you’re getting some bad takes here. Having a phone number does not make you a US Person. Having a bank account there does not make you a US Person. I can only assume people are confusing this with the domiciled test that can exist in other tax jurisdictions. It’s mostly the same criteria as the usual tax resident status (so all citizens + those with work visas + if you’re in the country for 183 days).

HSBC had the most succinct summary I’ve seen: https://www.fatca.hsbc.com/-/media/fatca/pdfs/global---commo...

The Australian Tax Office has a reasonable guide on the overall scheme and how it applies: https://www.ato.gov.au/General/International-tax-agreements/...

The US doesn’t care if you live there or not (unlike every other country except China); you still have reporting requirements and technically have to file returns saying you don’t owe taxes.

Even having a US phone number can signal that you are a potential "US person".

I recall that some of the questions mention that having US income is problematic, and that even having a US phone number is problematic.

But I'm not 100% sure.

Having certain ties to the US (such as a US phone number or regular transfers to or from a US account) are considered "US indicia". Having them triggers a requirement (thanks to FATCA) for the bank to verify your status as a non-US person. Usually this means furnishing a W-8BEN to the bank. This applies even if you're not a US citizen and never set foot in the US.

On top of that, even after you lose your "US person" status, some financial institutions may just claim that "you have been found in a US registry" without any specification which registry, and now either you prove that you are no longer in the unspecified US registry, or they just deny business with you. Not fun, and a fight that you cannot win.

I’ve founded companies in the UK, US and EU. I’d recommend the UK.

The cost of a limited company is £12. It’s formed in a day. Use https://www.ukpostbox.com if you need an address.

The legal system is well known and entrepreneur friendly. Accountancy and company admin are simple and relaxed. HMRC is supportive. You can pay dividends on a flexible schedule.

There’s a very large ecosystem of financial support, innovation grants, incubators, accelerators, angel networks and VC firms.

Flip to the US for later stage funding. Nice problem to have.

Needless to say, IANAL, this is not financial advice, crayons, etc.

I would have seconded that up to the botched implementation of Brexit, now there are many areas of increased risk because (a) certain things are not yet sorted out (increased uncertainty) and (b) the process is antagonistic and politicized instead of cooperative, so the issues are unlikely to be resolved anytime soon.

The UK is still a relative good countries for starting up, just not as good as it used to be.

if you're selling services it's been sorted since Jan 2020: there is no deal

(if you're selling beef, cars or washing machines then yes there's potential uncertainty)

also you get into double trouble with VAT-MOSS system

I've looked into the UK multiple times and it definitely sounds very attractive. It seems that OnlyFans and Hopin (https://hopin.com/) were both started as UK LTDs. Downsides (as you mention) are probably access to US investors and potentially issues with VAT because of Brexit.

Just out of curiosity - did you experience any issues selling to EU customers because of Brexit?

As someone who tried UK, opening a bank account not being a UK resident and without proof of existing UK customers was extremely challenging.

Delaware company and then all team members get set up as contractors in their country of residence. If they are in the EU they can contract from where they are from but live within the EU - more flexibility. But putting people on payroll has a huge overhead - better compensate employees to pay a local book keeper to invoice and process their payroll. Encourage people who have not contracted to research what contractor fee covers their salary. It will be tricky to compare apples to oranges when it comes to salaries, not just because of different rates in different places, but because salaries are quoted differently and have different insurances. Where I'm from there's a compulsory payment from employer to the employees pension fund of choice. Salaries are quoted to include this payment. And on and on ... very different across countries. Contractor fee "normalizes" this and places some burden on employees to research what their USD contractor fee is. Ask people to invoice a week ahead of international transfer and transfer 1-2 business days before month's end. This will result in monthly salaries being paid out on time.

I'm pretty sure this would be illegal for employees in Germany because of the "Scheinselbstständigkeit" (False self-employment?)

Does this also hold if your employer (i.e. your client) is outside Germany?

This will require research on each countries laws, some countries have very rigid definitions of what qualifies as employment and will not allow those payments to be classified as contract income, dividends, or anything else.

The way I do it, I set up a limited liability company that is just my own name. I then charge for services rendered and income goes into a company in my sole ownership. I then pay salary to the only employee (me). This is common and completely legal.

> I set up a limited liability company that is just my own name. I then charge for services rendered and income goes into a company in my sole ownership. I then pay salary to the only employee (me). This is common and completely legal

This approach exploded fairly spectacularly in the UK for many of those deemed by the tax office (HMRC) to be using it purely as a device to attempt to avoid being "on payroll"

https://www.gov.uk/guidance/understanding-off-payroll-workin...

Even BBC presenters were setting up "personal service companies" to try and avoid taxes (allegedly at the urging of the BBC) and ended up owing the tax office a bunch of back taxes.

I highly doubt this is completely legal, maybe unless you are not expensing the company anything (and transferring all of the revenue as salary).

Estonia is also a really good choice within EU. With their digital residency card, everything can be managed online with digital signatures only.

I've heard lots of people talking about Estonia but can you name any international remote-first startup that became successful and raised money with an Estonian entity? I don't and this makes me somewhat suspicious :)

I don't know of remote-first companies, but I know of many Estonian companies that have raised a lot of money and been incredibly successful.

To name a few:

    - Bolt
    - Wise (TransferWise)
    - Pipedrive

I have a long history with e-Residency and know many e-Residents (e-Resident since 2015, 3 companies, member of EERICA.ee). Happy to chat about it. Email in bio.

I was e-resident too but had to become resident in Estonia. Cause if you are abroad and distribute yourself dividend (as a sole entrepreneur) your host country would consider your Estonian company local and thus it constitutes a permanent establishment and that becomes extremely complicated

Of course--but this is the case for almost all jurisdictions of record vs jurisdictions of taxation. Few countries want to allow a company to operate 100% in their borders without extracting some degree of taxation. (In fact, this is basic OECD taxation doctrine.)

My situation is complex, but, generally, the advantages of Estonian registration are found in drastically simplified and lower-cost business registration and processing (vs say a GmbH in Germany or Switzerland with high share capital and accounting costs) or ease of operation for digital nomads or fully remote companies. A OÜ isn't for everyone in every life situation, but when it fits, it tends to work really well.

A LLC or C Corp in the US could work just as well (or better), depending on the situation.

I second that. There are growing number of startups and increasing capital pouring into Estonia (hence the largest inflation rate in Europe) Wise and Bolt are good examples.

Wise is incorporated in the UK. Founders are Estonian.

Skype, maybe not remote first, but I think Skype have sort of paved the way/accellerated these efforts in Estonia. But it’s all just a guess…

Ireland seems like an obvious one to look into. English language. Simplified relationship with the EU as a market and source of employees. Used to dealing with US paperwork but not going to cause anyone to get the viral US person disease.

Pretty low corporate rates too (12.5%) but dividend withholding taxes are high.

Wherever the CEO/founder lives. You can always move the company, better to just get something formed and worry about optimizing for taxes later. Pay folks as contractors and you don't have to worry about having a presence in their country.

I am actually not trying to optimize for taxes but rather for low overhead and not spending too much time managing the company but rather building a great product.

In my experience, things aren't that simple. For example, if you start a company in Country A but you are the main decision maker and live in Country B, then Country B may try to claim primary taxation of the company based on the fact that they consider the company being 'effectively run' from inside their borders despite your incorporation. And you aren't going to read about this kind of stuff on forums because it is very situation specific.

Multi-country taxation is very complicated. You can get a general idea from asking online, but then you REALLY need to talk to an expert in those specific countries unless your business is just so small that the governments involved would never care.

If you don't want to do that, the best/simplest situation is almost certainly incorporating in the place where the founders actually live permanently.

As the post states, the idea is to hire / contract a number of people around the world. I don't think it would be easy to argue that that the company effectively operates from country A if most of the work is done by people in countries B..Z.

IANAL, of course.

Needing to argue about that, possibly in a lawsuit, with the tax office, would certainly negate any benefit of incorporating abroad to avoid some unspecified overhead.

Well, wouldn’t a company like GitLab run into the same issues if most of their employees are not in the US?

Gitlab is a publicly traded company and has a department of people working on solving that issue (continuously, as laws are constantly changing). You don't. Go create your local LLC equivalent and move on for now.

unfortunately, this is bad maths.

Open the company anywhere the founder(s) is/are. Just pick a reasonable location if you have many options.

The reasons being that you should never run a business without accounting and legal advice, so you will have someone take care of it for you, and the cost will always cover the risk of doing it yourself poorly.

And when you’re successful, you can always hire more legal/accounting or relocate.

I’ll conclude a bit more harshly: If you’re somehow relying on the costs of operations to balance the success of your company, you might as well just reconsider.

Reading this thread (and remembering past pains) I posit that things are too complex almost everywhere.

Some innovation-minded billionaire should buy an island - a white spot on the map (not this one: https://en.wikipedia.org/wiki/Principality_of_Sealand) - and create a new jurisdiction optimized for incubating remote startups.

From a litigation standpoint, if you stay in Europe, consider Switzerland as a neutral jurisdiction (Rechtswahl). This is independent from where your company will be registered. Else the US, as mentioned already, is a good place. Generally to keep in mind is, that apart from the tax standpoint consider also questions regarding labor regulations and civil damages (Schadensersatz).

With a fully remote setup like you describe, what are the mechanics of hiring a foreign team member?

Do you need a subsidiary or some legal entity in the foreign country in order to pay employment taxes? If they're direct employees of the US entity, what's their legal status in the US? Can you avoid all these questions by using foreign contractors rather than hiring foreign employees?

These are all really good questions. I am not sure. I think that you could work around these issues by either "hiring" people as contractors or using something like https://remote.com/ or https://www.letsdeel.com/. But I'd definitely be interested in hearing how other companies solved this problem (which is partially why I created the post).

We are US incorporated with staff in 14 countries. We use contracts for non-US staff and recently implemented letsdeel. So it looks good. You do not need a legal entity in most countries and in fact there can be significant disadvantages. The accounting management alone is a nightmare if you do it yourself.

Ps most people set up their own company and we contract with that.

Edit: add ps

Thanks for the feedback. Did you generally encounter any bigger issues with this setup or would you do it again for the next company?

Also, where in the US did you incorporate? Delaware?

Delaware, though we originally incorporated in the UK and then flipped as a condition of receiving investment. (Thanks Accel people!) The flip was the most complicated thing we've done--accounting, lawyers on both sides to avoid the dreaded taxable event, etc.

I would absolutely do the same in future. The contract to individual or individual's company is a standard model for remote companies like us that work on open source software. Some of our staff just have email & github access and that's it.

My email is in my profile. Send me email if you want to discuss. I'm happy to share details directly.

1. I'm not a lawyer.

2. If you want to hire someone abroad (outside of the business' country) then contractor.

3. If you hire enough contractors, you may be forced to set up an entity or use a PEO. Local governments see that as skirting employment law.

(I work at an all-remote company that is pretty transparent, and people lambast us all the time because they are upset we don't hire in $a_country_they_think_we_should and it's almost always "tax and labor law is complex, we can't hire there until we understand the implications better.")

Depends on the country :)

I've used Velocity Global to handle local laws, compensation (401K in USA but Pension Plan in UK/Ireland etc.), currency, and hiring requirements. There are others recommended elsewhere in the comments.

We are US based and used them for almost 8 countries so far (UK, Mexico, Hong Kong, Germany...)

https://velocityglobal.com

Just went through this. I ended up setting up as a contractor sending invoices quoted in the contract USD monthly number. I had to be careful to ensure I was covering all fees, including my coworking space rent and book keeper. They agreed to cover any future travel expenses though, which makes sense but better clarify it up front.

If you want VCs then it's always the US and should always be a Delaware corp.

For non-VC funded companies HK is great, allows for tax minimization, minimal headaches, access to international banks and potential access to Chinese market if that is important for your business.

It’s virtual impossible to operate a HK or Singapore LTD these days as a “US person”.

I don't see Malta mentioned. They speak English, are in the EU, use Euros, and have low tax.

Nice weather too.

Similarly to Estonia I've heard lots of people recommending Malta but can't really name any international remote-first startup that became successful and raised money with an Maltese entity..

If you look into the egaming and adult sectors you'll find a lot of success stories. But these guys actively try to stay out of the media.

>raised money

If you want to raise VC funds with no revenue there really is no better option than Delaware. Malta/Isle of Man/Jersey are meant for businesses that generate so much cash you don't know what to do with it.

The jurisdiction where banking and accepting payments will be easiest for you. Probably the US (Delaware, Nevada, Wyoming, as mentioned) or EU. Be careful of common offshore places, accepting credit cards will either be difficult or expensive or both.

There's a reason the Cayman Islands have two-thirds of the world's hedge funds incorporated there. It has a long and stable financial history and has stated that any structural financial changes will be grandfathered where legally possible. That sort of stability is worth the $100/month it takes to keep an international business there.

Do you have more info about the $100/month to keep a business there? Is that a third-party service or is it an official fee to keep a company on the register?

I see your point, but do you actually know any big, international startups that are incorporated there? I only know if Brave (the browser).

What I keep finding non obvious is equity. And especially ideally keeping US side a Delaware C. How to issue international options and shares?

Is there something stopping a US company from issuing equity to foreign citizens?

Good point, added that to the list of requirements in the original post. I am asking myself the same question.

Also: hiring (PEO?) & firing (at-will).

We do global remote contractors for those reasons + unclear equity, but would like to do more. Per-state US registrations / benefits / payroll are getting easy enough so minor overhead, equity is clear, and all states at-will. But getting that international is unclear.

That's a pretty complex question with a lot to unpack. (Except: Minimize your contact surface vis-a-vis Germany. That part seems easy.)

First off: There is no such thing as a "remote friendly" jurisdiction. Estonia is trying to market this, but don't drink the Kool Aid. Someone is going to have to make a trip to the bank or the notary every now and then. They'll have to show their faces. They'll have to affix their signature to things. With ink on paper. You will have to deal with business partners who will think this way: "This guy is based where I am based. He knows that if he tries to defraud me, the police will come knocking. So he's probably not trying to defraud me, so it should be safe to do business with them." Versus "This guy is just someone on the other side of the planet sending e-mails. He knows that if he successfully defrauds me, I won't be able to do anything about it. Therefore I don't want to take the risk."

A lot depends on trust and interpersonal dynamics between founders.

If there is a lot of trust between the founders, I'd pick one of the jurisdictions where a founder is actually based. Say you pick the U.S. for ease of access to capital. This means that the person who is physically in the U.S. would probably end up having to liaise, frequently in person, with banks, accountants, government offices, etc. This puts a huge admin burden on that person, and also requires a lot of trust from the founders in the other jurisdictions that this person won't abuse their privileged position. If that founder drops out and there isn't yet any physical presences in the U.S. except for that founder, the others will be in a difficult position, because their own jurisdictions might not recognize that this is legitimately a U.S.-entity if there is no actual person in the U.S. who is connected with this entity. So that's why it requires a lot of trust.

An alternative might be: Set up 4 sole traderships and a "placeholder entity" in a zero tax jurisdiction that kicks into gear when real money starts getting to the table. So:

* Frank Deutschmann registers with German authorities as a German sole tradership.

* John Smith registers with U.S. authorities as a U.S. sole tradership.

* Aussie Australian registers in Australia as an Australian sole tradership.

* Sing Singapore registers in Singapore as a Singapore sole tradership.

* Startup Inc registers in Bermuda, with each of the four holding a 25% ownership stake.

Startup Inc passes the following resolution, and correspondingly makes a contract with each of the other four entities:

Revenues: We intend to sell an API to clients at $1 per 100 calls. To achieve that, Startup Inc will subcontract Deutschmann to run one server, Smith to run one server, Austrialian to run one server, Singapore to run one server. When a request hits a server, the server should use a random number generator: With a 25% probability it will handle the request itself. With a probability of 25% for each of the other three servers, respectively, it will redirect the client to one of the other three servers. Every partner has to pay the costs for their own server (AWS bills etc). Every partner gets to keep revenue of up to $100k per year for requests their server serves. Revenue in excess of that goes to Startup Inc. Intellectual Property: All IP belongs to Startup Inc.

The thing about the API was just an example, but you can think of analogous ways of e.g. splitting sales of widgets. The load balancing algorithm is obviously stupid, this was just for simplicity of exposition.

The great thing about this arrangement:

* As long as your api makes below $400k, Startup Inc doesn't handle any money. The German authorities only deal with a German sole tradership and tax it on its small profits, and don't care about the rest. The U.S. authorities only deal with a U.S. sole tradership and tax it on its small profits, etc.

* The Bermuda entity is the key to the whole thing and yet no jurisdiction would have a reason to scrutinize it or try to poke holes in it or attach any real significance to their respective citizens holding shares that are legally worthless in a company that is legally not really doing anything.

* No founder enjoys a privileged position that requires almost unlimited trust. If any founder drops out at this stage, the other three continue to operate almost as if nothing had happened.

* While it makes a lot of sense for the four to take advantage of economies of scale by sharing heavily, there is also potential for some autonomy which reduces the potential friction if there's something that founders can't agree on (e.g. every one goes to their favourite bank and hosting provider, picks an accountant they personally trust, etc.)

* If they end up making a loss, everybody gets a loss on their personal income tax which they can each offset against future earnings.

* In this stage the whole thing legally just looks like four people coordinating their efforts on a joint venture of sorts. But the main thing is each of the persons. Which is the actual reality of the thing at this stage.

* For each additional dollar that the API makes beyond the $400k per year, the whole thing starts gradually to look more and more like a corporation, both legally and in terms of the real life circumstance that the legal structure represents. Increasingly, what matters is no longer the four people, but the IP and money held by the Bermuda Inc with every individual being pretty replaceable. And the legal structure actually reflects that, automagically turning from joint venture-like to corporate-like.

imho this decicions also heavily depends on the topic of your startup.

afaik for example for blockchain related stuff switzerland, especially the canton/city of zug is a very good choice - for legal reasons etc.

I'd say New Zealand. Purely because the labour is cheap. But if you're remote first that doesn't really matter.

Lol I wouldn't, I'd head for the hills. If choice of where to incorporate is being made to align with mitigating tax liabilities. I wouldn't work for that company as it doesn't align with my ideals.

Gross business is gross.

Other than that probs EU. Gdpr is good, murica has crap like HIPAA, straya well we're basically the wild west rife with white collar crime. Which I mean is ok if you understand from the get go the playing fields aren't even. Dice roll between those three.

Germany obviously has a high overhead. If you own more than 50%, CFC rules might apply and will make things very complicated.

One of the "tax heavens".

This is the actual reason why multinationals move headquarters there.

You’re likely going to have to establish “business entities” in each county - but if you’re working with VC/other firms I’d say defaulting to US - California would be the most known.

Really, you'd think VCs would prefer California over Delaware? At least YC specifically prefers Delaware:

> Why is it that we try to advise all companies, no matter who or where, that Delaware C Corp is the right thing to do?

src: https://www.ycombinator.com/library/5C-tips-on-company-forma...

You'd only think that if you haven't compared the burdens associated with each.

Delaware has long-specialized in making themselves an attractive place to incorporate. California... has a different mix of priorities, let's say.

This is terrible advice. All of it, not just the California part.

Tax shelters would be my initial guess.

I should clarify that the goal is not tax optimization but rather being able to focus on getting product market fit instead of spending time "managing" the company.

Typically low “managing” overheads is an additional perk of the tax havens.

Yes, but besides Cayman I don’t think investors would really be happy to invest in tax havens. Also you normally run into issues with substance requirements, opening bank accounts, bad reputation of the jurisdictions and of course tax authorities that will immediately question and investigate your setup.

From doing a lot of research I get that the general recommendation is to avoid tax havens (at least the obvious, shady ones - US, Ireland, Netherlands etc. are of course fine).

If you want investors then incorporate in the US, as the cheapest money by far is in the US and they prefer to invest locally. If that’s how your funding the company then it’s probably the dominate concern.

It really depends on how you want to grow. If you’re bootstrapping on profits then tax implications can become very important. You can have a subsidiary in ‘non shady’ jurisdictions for any squeamish customers.

There are plenty of good suggestions about jurisdictions, but I'd say that's not the only thing you should pay attention to

What you should check is what's the best way for each person to own their share in the company. Straight ownership might have some issues. Having each one have a company that then owns the parent company might be a way. Or having a company own your company then the founders own the parent company.

My friends and I have a seed-investment fund that we needed to be low overhead since we're all running companies. The Delaware process was fairly low-overhead. Some things needed to be notarized and it was a pretty easy process to get a virtual mailbox and everything (notarize.com was in the loop and they're neat!)

Sorry it isn't directly against your constraints but we are foreigners in the US so I thought I'd mention it. More information is always better :)

Good luck! Eager to hear how it goes.