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by alexhektor 2163 days ago
German citizen here.

Q1) What is (/are) the easiest path(s) to start a company in the US and/or seek funding there for Europeans? How costly is it?

Q2) If there's already a company registered in Germany for example, how costly (approximately) is the process to "register a subsidiary" in the US (required for YC), and how would the visas work? (Would spouses be allowed and be able to get a working permit?)

4 comments

Q1) For entrepreneurs/founders, the best visas are E-1s, E-2s, L-1s, and O-1s. Q2) You are alluding to the L-1 intracompany transferee visa but to work, the Germany company must have employees and be doing business and must continue to have employees and do business after the transfer.
Just a quick note that you will also have many tax issues in addition to the VISA difficulties. I recommend also getting one fo the top tax firms to have a look at your situation before you move. (I didn't and it was a very expensive mistake to make)
Hallo! You may want to check Stripe Atlas out: form a C Corp in Delaware for $500 plus some ongoing costs.

Disclaimer: I work at Stripe.

Q1) starting a LLC in Delaware/Nevada <$200, renting a P.O.Box that scans incoming mail <$100/year. You can't start an S-Corp (but you can tax a LLC as S-Corp) and starting a C-Corp can get very expensive (tax based on the number of shares). Most VCs require a C-Corp. Angels might be fine with an LLC.
I've always thought converting an LLC to a C-Corp is either not possible or prohibitively expensive, even for a growing startup. Is that the case?

Also Nevada? That's new to me!

LLC to C-Corp is easy and inexpensive.

There can be huge tax consequences of going the other way around, though.

I've been involved in several startups which enjoyed favorable tax treatment as an LLC, and then converted to a C-Corp upon the first round of outside financing.

It's possible, I once went through that process, but it took ages. But if you want substantial external financing, there is no other option.
Do you have to pay tax in USA though?
Last time I checked, both Delaware and Nevada were tax-free up to $1M revenue. However, franchise tax depended on the amount of C-Corp shares (i.e. instead of paying $250 for an LLC one could end up paying $70k for a C-Corp). And for your personal taxes it depends on the agreement between the US and your home country. In the worst case you'd have to pay both if there is no agreement.
Not a lawyer but AFAIK: - if you've a foreign shareholder you need a C-corp (to be honest, you'd want a C-corp anyway, you can't reinvest profits in a LLC) - you need to account federal taxes @21% - you don't incorporate an S-corp, you need to have an LLC of a C-corp and then you file to become an S-corp, which basically gives you tax free dividends at the expense of not being able to reinvest profits

There are much better tax deals to be had outside the states if you're trying to elude (the legal one, not evade) your country's high taxation.

What type of professional would I need to talk to, to learn more about this? I've been looking at Stripe Atlas and Firstbase.io for options, but I want to talk to someone that can tell me what the best option for incorporating is.