Comments on: What state should I incorporate in? http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/ Venture capital, seed financings, convertible note bridge debt, M&A, option vesting and other matters explained for founders and entrepreneurs Fri, 19 Mar 2010 08:24:58 +0000 http://wordpress.org/?v=2.9 hourly 1 By: danstuart http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-3020 danstuart Wed, 30 Dec 2009 17:45:57 +0000 http://www.startupcompanylawyer.com/?p=298#comment-3020 Thank you.<br><br>Trying to setup an online business outside the US but that which can use modern, secure payment gateways, yet remain free from US tax is next to impossible. You can setup offshore, but the payment/merchant account options are poor. You can register in the US, but then you are paying tax. The trade-offs seem simple but are complex.<br><br>If anyone has experience/success here please let me know. Thank you.

Trying to setup an online business outside the US but that which can use modern, secure payment gateways, yet remain free from US tax is next to impossible. You can setup offshore, but the payment/merchant account options are poor. You can register in the US, but then you are paying tax. The trade-offs seem simple but are complex.

If anyone has experience/success here please let me know.

]]> By: Yokum http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-3017 Yokum Tue, 29 Dec 2009 11:48:32 +0000 http://www.startupcompanylawyer.com/?p=298#comment-3017 @Dan - you should consult with a tax advisor. If you are incorporated in DE, the company will be exposed to US taxes. If a company intends to derive most of its revenue from non-US sources, then considering an offshore jurisdiction may make sense. @Dan – you should consult with a tax advisor. If you are incorporated in DE, the company will be exposed to US taxes. If a company intends to derive most of its revenue from non-US sources, then considering an offshore jurisdiction may make sense.

]]> By: danstuart http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-3014 danstuart Sun, 27 Dec 2009 17:56:55 +0000 http://www.startupcompanylawyer.com/?p=298#comment-3014 Great article. Quick follow-up: if I incorporate a foreign company in Delaware and take online payments into this company but then remit them overseas, does this then negate the tax benefits of Delaware? Cayman Islands would seem to be preferred in this case, but only if similar merchant account facilities were available. Correct? Great article. Quick follow-up: if I incorporate a foreign company in Delaware and take online payments into this company but then remit them overseas, does this then negate the tax benefits of Delaware? Cayman Islands would seem to be preferred in this case, but only if similar merchant account facilities were available. Correct?

]]> By: Yokum http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-2972 Yokum Wed, 09 Dec 2009 05:32:05 +0000 http://www.startupcompanylawyer.com/?p=298#comment-2972 @Will - Qualifying to do business in CA is independent of angel financing. A company operating in CA must qualify to do business in CA. @Will – Qualifying to do business in CA is independent of angel financing. A company operating in CA must qualify to do business in CA.

]]> By: Will Chow http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-2971 Will Chow Wed, 09 Dec 2009 03:40:55 +0000 http://www.startupcompanylawyer.com/?p=298#comment-2971 You mention that a DE corp operating in CA must file in CA as a foreign corp to raise VC. Is this also necessary to raise angel or F&F funds? You mention that a DE corp operating in CA must file in CA as a foreign corp to raise VC. Is this also necessary to raise angel or F&F funds?

]]> By: Yokum http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-2938 Yokum Tue, 08 Dec 2009 22:32:05 +0000 http://www.startupcompanylawyer.com/?p=298#comment-2938 @Will - Qualifying to do business in CA is independent of angel financing. A company operating in CA must qualify to do business in CA. @Will – Qualifying to do business in CA is independent of angel financing. A company operating in CA must qualify to do business in CA.

]]> By: Will Chow http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-2937 Will Chow Tue, 08 Dec 2009 20:40:55 +0000 http://www.startupcompanylawyer.com/?p=298#comment-2937 You mention that a DE corp operating in CA must file in CA as a foreign corp to raise VC. Is this also necessary to raise angel or F&F funds? You mention that a DE corp operating in CA must file in CA as a foreign corp to raise VC. Is this also necessary to raise angel or F&F funds?

]]> By: Yokum http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-2853 Yokum Fri, 07 Aug 2009 01:45:01 +0000 http://www.startupcompanylawyer.com/?p=298#comment-2853 U.S. companies typically don't migrate off shore because it triggers U.S. anti-inversion laws, which may result in adverse tax consequences. There are various mechanisms (share exchange, merger, etc.) to put an off-shore parent company (Cayman) or otherwise on top of an existing California company). There isn't a law per se that enables it. U.S. companies typically don't migrate off shore because it triggers U.S. anti-inversion laws, which may result in adverse tax consequences. There are various mechanisms (share exchange, merger, etc.) to put an off-shore parent company (Cayman) or otherwise on top of an existing California company). There isn't a law per se that enables it.

]]> By: ladylaw http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-2829 ladylaw Thu, 23 Jul 2009 13:39:26 +0000 http://www.startupcompanylawyer.com/?p=298#comment-2829 Very interesting post. I was wondering about the difficulty in migrating to the Cayman Islands. To do so, the Cayman Islands Companies Law requires that the state the company is incorporated in does not prohibit such a transfer. It seems many California companies transfer to the Cayman Islands, but I wasn't sure what law enables them to do so. Any thoughts? Very interesting post. I was wondering about the difficulty in migrating to the Cayman Islands. To do so, the Cayman Islands Companies Law requires that the state the company is incorporated in does not prohibit such a transfer. It seems many California companies transfer to the Cayman Islands, but I wasn't sure what law enables them to do so. Any thoughts?

]]> By: Yokum http://www.startupcompanylawyer.com/2009/03/03/what-state-should-i-incorporate-in/comment-page-1/#comment-2807 Yokum Mon, 22 Jun 2009 03:58:58 +0000 http://www.startupcompanylawyer.com/?p=298#comment-2807 @Sonja - Plenty of companies with no physical presence in DE are incorporated there. You simply need an agent for service of process in DE, which may cost somewhere between $100 and $250/year. @Sonja – Plenty of companies with no physical presence in DE are incorporated there. You simply need an agent for service of process in DE, which may cost somewhere between $100 and $250/year.

]]>