Comment by the-anarchist | Hacker News Reader

Comment by the-anarchist | Hacker News Reader

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Precisely because the average participant of this platform has as much in-depth experience in actually incorporating and running a company in different parts of the world as the average person on the street.

Netherlands, and the EU in general, are cumbersome to deal with regardless of all the "startup incentives" they've been pushing in the past few years. Compare the incorporation, maintenance and closure processes of a Delaware/Wyoming/New Mexico/Florida LLC with anything even remotely comparable in Europe (e.g. a BV/NV/SRL in the Netherlands) and you will quickly see why the US has become the world's center-stage for doing business.

For SourceHut Estonia and Romania would have probably been a better choices, as from my understanding, they are not investor-driven and do not seem to head that way, they are fully digital/remote, and they require disproportionally more infrastructure than office workers to operate.

However, when living in the EU one has to take into account various (frankly absurd) taxation laws that might ultimately prevent founders from incorporating their company in any of the neighboring countries. Hence it would be necessary to look at the details of the founder's circumstances to evaluate if incoporation in a different country would have made sense to begin with.

That said, I agree with the top rated comment [1] as for the broader topic of where to incorporate.

[1] https://news.ycombinator.com/item?id=44366032

> For SourceHut Estonia and Romania would have probably been a better choices

Doesn't the ease of incorporation get erroded by the ongoing burden of filing taxes in multiple places? I remember looking at this years ago as an alternative to a GmbH and thinking it wasn't worth it. Maybe for this type of company it is.

This depends on many details and there's no general answer to your question. Also, Estonia and Romania do not only offer easier incorporation, but are an overall better fit for businesses like the one presented here (at least from the limited information that I was able to gather on it) due a higher flexibility, more favorable taxes, and fewer regulations in general.

Since you're mentioning a GmbH I'm assuming you're based in either Switzerland, Germany or Austria. Generally speaking, regulation and tax codes in these countries have made it very unfavorable to operate any foreign entity, unless there's a fair amount of substance and structure in the target jurisdiction that make it worthwhile.

However, it is important to mention that while it is often the "natural" thing to do, operating a business in the same country that the founder is based in is almost never ideal from a regulatory and tax perspective. Unforunately, though, proper planning and execution of advanced structures is usually not something the average startup founder is a) primarily interested in and b) able to afford.

Given the other comments in this thread mentioning the founder's rather left-leaning political views, I assume that regulatory and, specifically, tax optimization were none of the founder's main goals to begin with.

This is what I gathered too. Why then do you think he chose to move to Netherlands?

The benefits and practicality of living in a country are different than those of running a company in it, right? And he kept the company in the us for some time after the move from the sounds of it.

Yes but moving to Netherlands was ideological. What follows is obviously practical.

From the limited information that appears to be available I would assume that the reasons to move operations from the US to NL were largely personal. Reading through the other comments in this thread and some of the content on the founder's own website gives some clues.

My theory is that they are eyeing to get rid of their US citizenship and naturalize in the Netherlands, which is possible after 5 years when certain criteria is met. Having economic ties to the country you're trying to get citizenship in helps immensely. The logical next step for them would be to open a physical location and employ Dutch citizens to further solidify their case.

You have to remember: As long as the founder is still citizen of the United States, they will inevitably support the country and its policy with the taxes on their world income. After all, the US is one of only three countries in the world that taxes based on citizenship rather than residency.

Having that said, there have been various attempts across Europe to change from residency-based taxation to citizenship-based taxation in the past decades. All of which have been unsuccessful so far.

> After all, the US is one of only three countries in the world that taxes based on citizenship rather than residency.

This is true, but only on taxable income over $130,000. Drew is probably not making over that from Sourcehut, so he’s not going to be paying any taxes to the US anyway.

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