How does taxation work in this scenario? I'm imagining that all profits(?) will be subject to US taxes.
Would the company that Stripe help register in the US be a subsidiary of my existing company (not registered in the US)?
Would the company that Stripe help register in the US be a subsidiary of my existing company (not registered in the US)?
The corporation we help you setup in the US would be a new entity.
1. It's ridiculous to incorporate in the US, due to ridiculous tax policies; and
2. It's a great way to upset local tax authorities + there are probably a ton of nasty side effects (e.g. some countries have "see through" taxation that taxes certain profits arriving in foreign entities at the shareholder level, or require board meetings to be held in the jurisdiction the company is based in, etc etc)
If you do this, make sure to get advice from local counsel, or it could end up being a very expensive exercise
What are these ridiculous tax policies? I've often heard complaints about US taxes for citizens/residents, but nothing yet for companies... (I realize that many companies choose to incorporate in tax havens to evade taxes; but I'm mainly interested in knowing how is incorporating in the US worse than incorporating in e.g. UK, Switzerland, Japan, Australia, Germany, France)
Second, the US is very aggressive when it comes to withholding taxes (FATCA and all) - if you’re a shareholder living in a country without a decent tax treaty with the US, you’ll lose an extra 30% on any dividend you declare, unless you include intermediary structures such as holding companies etc
Now, some of these might not matter that much to a startup since they aren’t making a profit anyway. But if you build something profitable it will be relevant for an acquirer. If things are set up properly to pay less tax, they will pay more for your company.
To me, this makes sense. Is this different to what other countries do? Although the corporate tax does seem rather high...
The problem is when you want to get money out of that company, to your home country. You'll have to pay taxes in your home country... Unless you take the plane with a suitcase full of cash once in a while.