[academia_hack]

It's inordinately difficult and expensive to start an LLC or SA in some EU countries. It's even difficult and expensive to _stop_ an LLC and dissolve it. Huge amount of risk and cost on founders and a huge distraction from running a business.

I think that EU-Inc _could_ be an improvement, but it needs to avoid the committee laundry list of ideas/requirements/form fields that plagues the EU startup ecosystem. My worry is that the end result will require notarized declarations of honour, financial plans stretching decades into the future, 30 page business plan documents, reams of corporate governance documents, and tons of other nonsense to protect against the perceived risk that someone who failed at starting a business once fails a second time.

There needs to be UX requirements on the process from day one against which the end result is judged. (E.g. "a company should be able to register in x days", "a complete application should be no longer than y pages", "application costs should be less than z euros").

[egorfine]

> a company should be able to register in x days

Which EU bureaucrats will fully pass by treating this as "a company should be able to register in x days once the full set of documents has been collected".

[moritzwarhier]

Companies are treated like persons legally and while I'm sure there is too much bureaucracy in many places, I'm also sure that there are important documents that should be required.

For example to make sure that a company can be held responsible when it breaks the law.

There are already enough loopholes to disconnect legal responsibility from profit-taking, and not every company is benign.

Sure, if the documents cannot be acquired in X days for other reasons, that would undermine the tagline.

But I don't think that's the main risk.

Let's not forget that some requirements make sense.

In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved.

But "minor" is important here... great for a small business that applies for a permit to renovate there outdoor seatings or whatever.

I wouldn't want for company foundings to be auto-approved without submitting the legally required documents.

[direwolf20]

> For example to make sure that a company can be held responsible when it breaks the law.

This is the reason Germany hates small companies. Germany wants you to be a sole trader with no liability shield.

Some people hack the system by registering a company in another EU state such as Lithuania.

[erispoe]

That's not a hack, if you operate the entity from Germany, it must be registered in Germany. It's often touted as a tax loophole, but it's not. Tax authorities do not care about you unless you actually make money, then they will come after you.

[jkaplowitz]

Would the liability shield not generally apply to a foreign entity registered in Germany? Sure there may be special rules for non-compliance with specific tax obligations, but I'm talking about for general liability for other purposes, like a contract signed by the entity where no personal guarantee was given, or a harm caused by the corporation where the owner was not personally involved or negligent in causing the harm.

[direwolf20]

Which law says it must be registered in Germany?

[johannes1234321]

It must be seated where the business happens for compliance with tax laws. But you may have a French S.a.r.l. in Germany and thus fall under their company law (with impact on publication responsibilities, company governance etc.)

While for some cases there is room for abuse (like Amazon Kindle eBooks are sold to Germany by a company situated in Luxembourg, while only selling via amazon.de to audience with German residency) However my employer is a Dutch B.V. with headquarters in Germany, thus they avoid having to form a board with works council representatives as a German GmbH (or AG) of comparable size would require.

[ratherbefuddled]

It's not that it must be registered (incorporated) in Germany. It's that for tax purposes if the company is run from Germany it will be considered "permanently established" and treated as resident there. Permanent establishment laws are often quite surprising to people doing business across different territories.

[jmaker]

Piercing the corporate veil is a very common practice across countries, both in civil and statutory cases as well as administrative cases. It’s a very fragile shell.

[egorfine]

There is a huge spectrum between "require impossible documentation" and "require none". Germany and EU are heading towards the former.

[Bewelge]

German here. That's not true. What crazy documentation do you require? An ID, proof of residence, and a business plan? (edit: you don't even need a business plan)

That being said, everything about the process is annoying and you always have the feeling that you're doing something wrong or forgetting something. Together with some ridiculously slow processing times, it's the perfect combination to frustrate you and I'm sure it ultimately reduces innovation.

But in reality, getting all the paperwork together is probably a couple of hours of work. You can buy services that do it for you for a couple of hundred Euros.

[ExoticPearTree]

> ... and a business plan?

Why would the government need a business plan?

It's none of their business what you want to do with your company besides a general description as "software development" or "consulting services" or whatever.

[logifail]

> It's none of their business what you want to do with your company

There are plenty of European member states that want the ability to control very precisely what you do with "your company". You want to call yourself "a software engineer"? Ooops...

In the EU it seems particularly the German-speaking countries are borderline obsessed with a) titles, and b) whom may use those titles. See, for instance, https://news.ycombinator.com/item?id=34096464

[Bewelge]

Actually I think I might be mistaken that you are even required to make a business plan. It's listed as one of the steps on the states portal about founding. But it goes on to say that it's not technically required, just highlights its importance.

https://www.existenzgruendungsportal.de/Navigation/DE/So-geh...

[dpc050505]

Several sectors of economic activities have the potential for atrocious externalities and it's absolutely the government's business to know about these and make sure that you're following regulation to minimize these externalities. When you make your employees the neighbours sick (or straight up kill them) it's an enormous failure on the part of government. It's easy to be oblivious to that when you only think about software.

Exhibit A: https://www.ctvnews.ca/montreal/article/battery-facility-acc...

[jagrsw]

I don't know much about corporations, but why business plans are needed at all? I mean, for EU citizens.

bank (loans), immigration and investors can be interested, but their interests are not covering every corporation out there.

[Xylakant]

There’s absolutely no need to have a business plan to start a company in Germany. You articles of incorporation and they state a company purpose, but this can be something as simple as “do IT consulting”.

Obviously, having a credible plan helps if you try to convince banks to loan you money or any such thing, but the act of registering a company requires no such thing.

[embedding-shape]

It's basically a proof of "most basic effort" that you're serious. You could probably note down some stuff on a single A4 and get it approved, it doesn't have to be a 40 page dossier.

Kind of like fizzbuzz, just something really simple and most basic to get rid of the "easy scams" and so on.

Edit: So "easy scams" are probably the wrong word, I initially wrote "riffraff" because in my mothertoungue that isn't so... disparaging, but what I meant was that it's used as "bare minimum filter" basically.

[petre]

Previous HN discussion about setting up a GmbH.

https://news.ycombinator.com/item?id=39959368

[dcrazy]

> business plan

This is the problem. Let me pivot. Let me fail. Let my investors (including myself) lose time and money in bad ideas.

All the bureaucracy in the world didn’t stop Wirecard, but it sure as heck demotivated people from trying something new in Germany.

[Xylakant]

There is no problem, because no business plan is required.

[embedding-shape]

Literally the whole effort this submission, is about is moving a tiny step towards "require none" but not go all the way, compared to how it is today. You chose the wrong submission to comment that on, in any "new regulation in EU" submission that might have been appropriate, but this move is quite the opposite of what you say is happening.

[egorfine]

> this move

My point is that this move will not happen. I don't believe EU can overcome a huge and extremely motivated army of bureaucrats.

[philipallstar]

This isn't an EU move, is it?

[embedding-shape]

> This isn't an EU move, is it?

What, exactly, do you mean with "EU move"?

I guess technically it's a "European Commission" move, but overall it's a European and EU move, unless "move" has some specific meaning to you.

[AnthonyMouse]

> For example to make sure that a company can be held responsible when it breaks the law.

In general this has nothing to do with incorporation documents.

If a company unintentionally causes a large amount of damages, the company is going to get wiped out, but then you're just having the judge order the bank to transfer the company's assets to the victims. The owners of the company aren't particularly relevant except insofar as they now own a company whose value has been zeroed out, and they might be the ones to show up in court to argue against that being what should happen.

If the people at a company intentionally cause a large amount of damages, the corporation is irrelevant. If your "corporation" is in the business of stealing catalytic converters and the police come to arrest you, the person with the sawzall in their hands is going to jail, and if that person was hired to do it they're going to be offered a deal to testify against the person who hired them etc. Pointing to your articles of incorporation at that point isn't going to save you. That isn't what LLCs do, actual criminal enterprises will frequently have not listed the true principals on the documents anyway, and the government is going to try to prosecute the perpetrators rather than the patsies on the documents.

There is no real point in making this a burden for honest people. If they're honest then it doesn't matter. If they're not honest then you'd be a fool to trust what they wrote on a form anyway.

[aaravchen]

Is that actually how corporations work in the EU?

Only having experience in the US, I can tell you conclusively that if the company states it's job is to make and promote poison for untrained people to spray everywhere, let's call it "CircleHeavenward" for example, and they successfully convince enough people to buy and use it, but then it's found they knowingly told people to spray it unsafely and knew it would kill millions of people but his it, and millions of the customers neighbors are now dying, absolutely nothing will be done. Because they're a successful corporation and therefore completely immune to any responsibility for any outright criminal activity. Doubly so it they can successfully claim more than one person was involved in carrying out that criminal activity, and therefore the responsibility for it is distributed.

[AnthonyMouse]

Syngenta got sued over paraquat and has already agreed to pay more than $100M to one set of defendants while still being actively sued by others. Corteva is paying in excess of a billion dollars over PFAS. Bayer/Monsanto is paying in excess of ten billion over glyphosate. That's only what they've already agreed to pay; others can still sue them for more.

A lot of stuff is e.g. you have an old study showing that glyphosate causes cancer in mice in amounts orders of magnitude higher than typical human exposure. Plaintiffs are going to claim that means they knew it was dangerous, and maybe that's even enough to win their lawsuit. But lots of things cause cancer in mice in excessive amounts. Can you prove beyond a reasonable doubt that they knew it would cause cancer in humans in ordinary amounts? If not then you don't have enough to put them in prison. Also, which "them" is it? If you want a person, the actually guilty party is typically not the CEO, it's a middle manager who made the decision three decades ago and is now a retired non-billionaire. If you collected enough evidence then you could potentially put a middle class grandpa in prison for it. The actual reason this doesn't often happen isn't that corporations are rich.

But also, what does this have to do with the bureaucracy involved in entity formation? Is your theory that making it harder to start a small business would somehow have made it more likely for Monsanto to be prosecuted for whatever they did? How?

[nicbou]

> In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved.

I believe it was just a crazy idea that was submitted recently.

The closest real thing is 75 VwGO which requires a decision in 3 months. The immigration office has been failing to meet that requirement for years with few consequences, because enforcing that right is expensive and takes even longer.

[amluto]

In most (all?) US states, you can just start a company. You file a form, usually online, with the state, and you ask the IRS, online, for an ID number called an EIN. Technically you have a valid company after just step 1, but good luck getting any sort of bank account without doing step 2.

If you want to employ people, you need to file gratuitously obnoxious paperwork, but it’s still automatic.

What’s the actual problem? Why should it be harder?

Some states like California dislike small businesses in that they charge $800/year. But that’s pretty much it.

[egorfine]

> Why should it be harder?

Marx won. You should learn how easy it is to fire an employee in a software development company in Germany.

(spoiler: almost impossible)

[danielfoster]

This is admirable but the process in Germany right now is overly burdensome. It probably does weed out some bad actors (and good actors) not because of the documents required or any sort of checks performed, but because it takes months and costs thousands of euros.

[sbacic]

Which in itself wouldn't even be a problem if lack of said documents caused your submission to automatically fail validation right at the start. Instead, a real, live person will need to review your request to verify that it indeed includes a full set of documents, said documents are genuine and "correct" (despite most of them already being issued by the government!) before approving your request.

[egorfine]

And given the founding principles of bureaucracy, no set of documents is ever correct because there are at least two contradictory regulations on any given topic.

[miki123211]

I think what's even more important is that the costs for founding and maintaining such an LLC should scale with revenue, including scaling to 0.

In many EU countries, you still have to pay social security and/or health insurance, even if your company brings in no revenue. This isn't supposed to be a problem, as you're not really supposed to officially start a business unless you cross specific revenue thresholds. However, that doesn't work in practice if you're offering your services online, as many payment gateways in Europe will not deal with non-business accounts.

[Xylakant]

Social security gets paid on wages. Revenue doesn’t play into it.

[adamcharnock]

In Portugal (for example) is is mandatory for an Lda (limited company) to have an employee, and they must be paid minimum monthly amount. In practice this means a few hundred euros a month go to the government in taxes. Then on top of that is another hundred or so in accountancy fees.

[ptsneves]

As someone who had a company in Portugal I do not understand what you meant about requiring an employee to have limited liability company. You may be referring to the need for one of the owners needing to pay social security but it only needs to do so if it does not pay in any other form. It hurts but it is not unreasonable and may provide unemployment benefits.

The accountant requirement I confirm, but also true in Poland for example.

The really big offense is that one must pay taxes for the next year based on the previous tax payments. They give a small grace period but then it’s on. It was supposed to be an emergency measure but of course it was never removed. It is a free loan to the state.

You can open a single person business though and skip the accountant.

[buzer]

Not quite true. In Finland YEL (yrittäjän eläkevakuutus, pension insurance for entrepreneurs) is required and it's based on estimated value of the entrepreneur's work input. Even if you pay yourself 0 euros your YEL income is likely higher. The models that insurance companies use take revenue in account.

[dv_dt]

If they were being pragmatic about it, the more universal healthcare systems offered by many EU nations should be a massive advantage for startups vs nations like the US, but the wrong regulations around company operations negates it or worse.

[glimshe]

I didn't want to start a healthcare discussion but employer costs with healthcare in the US can be lower than Europe labor taxes. EmployEE costs is a different thing but many startups have young employees who don't need a whole lot of healthcare in general.

[dv_dt]

The employee healthcare costs don't count, so we can pretend that healthcare costs doesn't detract from performance or the ability to hire talent?

Serious cancers are on the rise among the young and the type of plans you allude to do not provide good coverage. And why limit startups to the young, or limit their ability to have a family? 40+ founders have a higher business success rate.

I think the US is having so many problems now because it wants to half-a** aspects of living that should be solid for false efficency.

Startups should be a voluntary fiscal risk, not a direct risk of life, limb, or family. That's also how you optimize for the success of the startup - by removing distractions and worries that are not directly in the startup proposition.

[glimshe]

I'm not arguing which system is best. I'm just saying this isn't a big advantage for a lot of startups from a purely financial perspective, which was the original point.

Sure, one startup will go down because the young founder had cancer, but that's not common enough to skew the average case too much.

40+ founders like me often had an opportunity to save for healthcare costs with the high salaries in the US plus Obamacare.

It's a fact that people in the US create lots of startups. Maybe the system could be much better (still not comparing to Europe) but it isn't too bad to be honest.

[trueismywork]

Startups but definition have no revenue.

Its also a chicken and egg problem. Having a revenue means having a company and vice versa. Unless you're in very old fields, which explains lack of new tech companies in Germany

[sib]

>> Startups but definition have no revenue

"Having no revenue" is definitely not the definition of a startup. There are plenty of startups with revenue (and even profit!)

[friendzis]

> Its also a chicken and egg problem. Having a revenue means having a company and vice versa.

How would you pay your employees making the product/service that will eventually bring in the revenue? That's what "own capital" is for.

Typical LLC/JSC will have at the very least one employee -- the CEO -- and that will bring one minimum wage worth of expenses (sort of). There are legal entity types that can function without employees with shareholders sort of self-employing, but those are not universal across the EU.

[jandrewrogers]

In the US, it is common for a small startup company to have no employees. Your role and title with a company is separate from your official employment status. This is where concepts like "sweat equity" come from. You can be an owner and work on a company without being an employee or receiving any compensation. Creating a company in the US comes with no real obligations to do something with it.

This is beneficial. It allows small companies to bootstrap without incurring the complexity and cost of having employees until they have enough revenue or capital to justify that expense.

[stevenally]

In the USA California, Texas, Delaware etc all have different company registration and compliance processes. This has not damaged the business environment.

It should be left to each EU country to decide how to manage their company compliance processes. Those companies can then easily trade all over the EU.

You can easily set up a company in Ireland.

The EU does not to over reach with one-size-fits-all regulations. That will eventually lead to it's dissolution. It needs to concentrate on maintaining a free trade area.

[adamcharnock]

Well yes and no.

Yes you can form a company in Ireland while living in France. But you cannot get an Irish VAT number without a physical presence in Ireland.

And if – for example – France learns that you are running an Irish company from France (i.e. you have a 'permanent establishment' in France), they'll want you to file and pay French corporation tax. Which is likely sufficiently annoying that you may as well have formed a French company in the first place.

[bootsmann]

Its almost impossible for a fund from Germany to invest in a company from France and vice-versa. It is a significant problem!

[roenxi]

That sounds like a significant problem ... for either the Germans or the French to resolve. The only thing stopping foreign investors is law enforcement officers telling them to stop. The Germans can, literally, just not do anything except enforce basic property laws and foreign investment would pour money in.

I'm put in mind of US citizens who seem to be the lepers of international finance, often when I see prospectuses they have a lot of text on the the front saying "don't show this to anyone from the US" because they don't want to deal with the compliance costs of US law. In that case it is the US's problem and the US has an easy solution.

When people talk about larger regulatory frameworks they see the problem as the more permissive side is giving people options and want that shut down immediately. If the US started talking about global regulation to ease investment, for example, that means they don't intend to make it any easier but they do want everyone to adhere to US compliance ideas whether or not they do business in the US. It is a way for people with bad ideas to make the world worse. I'd assume the situation in Europe turns out similarly.

[mmooss]

> That sounds like a significant problem ... for either the Germans or the French to resolve.

If you do the math on the number of pairs of EU countries that need to find bilateral solutions ... it becomes clear why the EU government exists. It's just not efficient otherwise. (Answer: 351)

> When people talk about larger regulatory frameworks they see the problem as the more permissive side is giving people options and want that shut down immediately.

Who are you talking to? People on HN and in US business, and the most popular theme in US government, is anti-regulation. I think both sides are misguided, sort of like being against or for laws - we need the right laws; sometimes we need more, less, or changes.

> US citizens who seem to be the lepers of international finance

> If the US started talking about global regulation to ease investment, for example, that means they don't intend to make it any easier but they do want everyone to adhere to US compliance ideas whether or not they do business in the US ...

Doesn't Wall Street dominate international finance? They don't seem like lepers. Also, when international financial regulation has been discussed, I think it's the US that usually undermines it. But maybe you mean something else than what I understood?

[roenxi]

> If you do the math on the number of pairs of EU countries that need to find bilateral solutions ... it becomes clear why the EU government exists. It's just not efficient otherwise. (Answer: 351)

That logic doesn't hold. If it made sense supermarkets wouldn't work because they have to hold bilateral negotiations with hundreds of thousands of customers. In practice, they just offer a take-it-or-leave-it deal and people either accept it or they don't.

Similarly, countries offer a take-it-or-leave-it set of requirements to foreign investors. If investors aren't taking the deal, countries have the power to unilaterally renegotiate what they offer.

> Doesn't Wall Street dominate international finance? They don't seem like lepers. Also, when international financial regulation has been discussed, I think it's the US that usually undermines it. But maybe you mean something else than what I understood?

I dunno, maybe they operate out of the Caymans or something legally complicated. I'd estimate maybe 20-30% of the stock offers I see have a lot of front matter materials saying something to the effect of "if you come from the US you aren't even allowed to read this, go away". Very US-specific exclusions. Maybe the offers I get are too small time? I dunno, I just report what I see. I always chuckle at it though.

[mmooss]

> I'd estimate maybe 20-30% of the stock offers I see have a lot of front matter materials saying something to the effect of "if you come from the US you aren't even allowed to read this, go away".

That is interesting. I wonder why. It seems like they could offer a combined prospectus that addresses all major sets of requirements. I do know that the US an (much of?) the EU use different accounting standards; maybe the numbers are for one region or the other.

> That logic doesn't hold. If it made sense supermarkets wouldn't work because they have to hold bilateral negotiations with hundreds of thousands of customers. In practice, they just offer a take-it-or-leave-it deal and people either accept it or they don't.

This isn't buying a can of soup at retail.

[lazide]

Each of those places (besides Delaware, kinda) has economies larger than a large chunk of the EU.

[embedding-shape]

Yeah, we've realized that, that's why we keep iterating on the union :)

[tick_tock_tick]

Has it been effective though? The EU used to have a bigger GDP than the USA in 2008 now the USA is over 50% larger. Member nations are still dragging their feet on doing much of anything in the Draghi report and it's unclear if that will ever change.

[embedding-shape]

> Has it been effective though?

At what specifically?

At preventing another European war? Up until very recently, pretty good. No more world wars as of yet, but 80 years has past since the last, everyone with memories of how horrible it was, are almost gone, so I guess we're building up to another one. I'm hoping that at least Europe sticks together if it gets down to it.

I'm not sure why GDP is such an important indicator to you, it's just the value of goods and services, what purpose is that supposed to serve?

USA keeps getting a larger GDP you say, yet the population at large seems to be getting poorer, education and health care gets worse, and people finding it harder and harder to find somewhere to live. So what good does a high GDP actually give you in the world today?

[jandrewrogers]

> USA keeps getting a larger GDP you say, yet the population at large seems to be getting poorer

People in the US may be many things but poor is not one of them. The median household income is ~$85k and the median household lives somewhere pretty inexpensive. The amount of money Americans can afford to waste on things they don't need is unmatched.

[bootsmann]

This is a commonly cited stat but it is mostly an exchange rate phenomenon that disappears when you adjust for purchase power. If you go by comparing GDP in dollars the EU recovered almost half this gap last year simply from the dollar dropping in value.

[ethbr1]

I was about to say... give dedollarization spurred by the current administration a couple more years and then compare GDP.

Being the world reserve and trade currency artificially props up the value of that currency (beyond what it would otherwise be), which has the result of artificially boosting GDP to GDP comparisons.

[lazide]

My point is rather than almost anything can be made smooth if you have enough $$ pointed at making it so. One of the biggest issues with small economies is that they don’t have the capital spent to make it easy to do things yet; which is friction that helps keep them small.

[yencabulator]

This is so ridiculously contrary to a Northern European existence that it's just funny. US is ridiculously more bureaucratic with lots of back office papers shuffled around by humans. US tax filing is hard to even describe to someone who never lived there.

Official procedures can be made smooth by valuing them being smooth.

[lazide]

You just pay. All the problems are known and have workarounds, it just involves money.

That’s my point.

It doesn’t have to be nice or clean or smooth, if there is a known solution which someone can just throw money at, at scale.

The harder problem with these smaller countries and economies, is people haven’t figured out how to do that yet. So you end up having to track down x or y random lawyer, then hope they don’t screw you, etc.

[egorfine]

> My worry is that the end result will require

Yes it will.

The vast army of bureaucrats in any country does whatever is in their power to make sure their specific requirements are included into the process. What do you mean they would like to open a 3D printing workshop with no Environmental Impact Study done?!

[whynotmaybe]

You know that EU bureaucrats do what each country want them to do right?

Each time the Commission comes with a new rule, most countries agree with it. And if its an "unpopular", the game for each gov is to blame the EU.

https://en.wikipedia.org/wiki/Euromyth

http://news.bbc.co.uk/2/hi/europe/6481969.stm

[egorfine]

> You know that EU bureaucrats do what each country want them to do right?

I'n not entirely sure about that.

The vast majority of entrepreneurs are complaining about unrealistic requirements and inconceivable burdens in Germany. Certainly no one wants any of this. Yet somehow the rules pile up.

[hvb2]

You said

> In Germany

And then

> Yet somehow the rules pile up.

Which is just German culture as much as food is Italian. If you want rules for everything I'm hard pressed to think of a more regulated country than Germany. And the populace, in general, might scoff at how long things take but absolutely want to understand what the process is... So yeah, you can't have it both ways

[egorfine]

> hard pressed to think of a more regulated country than Germany.

Unfortunately the influence of Germany over other EU countries is quite strong in terms of regulations.

Absolutely no one wants more regulations, yet they slowly pile up in the whole EU. I live in Poland, where regulations are incomparably more sane than those of Germany, but even here it slowly grows.

[yownie]

>Which is just German culture as much as food is Italian.

https://www.bbc.com/travel/article/20250227-is-there-no-such...

[p0pularopinion]

> Certainly no one wants any of this. Yet somehow the rules pile up.

Haha. May I introduce you to https://en.wikipedia.org/wiki/Prussian_Reform_Movement

German precision was not only about engineering, it has always also been about having a precisely defined bureaucratic process for everything.

Also, people never explicitly say they do want more bureaucracy. More often, the bureaucracy is more often a result of what people don't want to. They may want more roads, but they don't want them near *their* home, thus they fight for something to prevent construction there. They may want this subsidy, but they most certainly do not want person X to get it as well.

[egorfine]

> precisely defined bureaucratic process for everything

Which is extremely similar to communism. As in: perfect in theory, impossible in real life.

[kakacik]

Bureaucracy is a beast with its own life, it doesn't care what regular people want. In fact most folks' requirements go directly against objectives of this beast, since people want it as small and as weak as possible, while beast need to be fed and feels internally it needs to be strong. Anything not related to gaining or maintaining strength is antagonist.

[bombcar]

And even if that's not the case, the group of "entrepreneurs" is so small compared to the voting population at large, that they won't even notice if they crush it entirely into paste.

[egorfine]

Exactly this. Common folks like "tough on crime" postures of politicians and never consider nuance, which is everything. Yeah, crush them, those white-collared fraudsters.

[whynotmaybe]

It's the same in Belgium where it takes weeks to start a business, but as a French said to me some time ago, it's better than in France.

[jandrewrogers]

> It's even difficult and expensive to _stop_ an LLC and dissolve it.

In my experience this is at least as important. Everyone focuses on the process of creating companies, which is now relatively streamlined in many European countries.

The real, massive difference between the US and EU is how hard it is to shutdown a company and the legal implications of that. I was shocked at how unreasonably slow and painful it can be to shutdown a company in Europe the first time I did it. Many countries effectively treat it as a criminal proceeding. Sometimes startups just fail, that is the nature of startups.

In the US shutting down a company is almost as easy as creating one.

[jan_Inkepa]

I've been told by a lawyer that a common sensible step in closing companies in Germany is to first...reseat the company in the UK ... (at least pre-brexit - not sure if things have changed). Think of how bad and expensive the process has to be for this extra step to be worthwhile.

[anonzzzies]

I have been trying to close a UK company for the past 2 years (created post brexit).

And reseat, as others say, is not as easy; the gravity of decision making has to be in the country of incorporation; if your main shareholders and directors are physically in Germany and you reseat the company to where-ever, Germany is going to see and act like this is a de-facto German company. Hence you gain nothing, you get more paper work.

[jan_Inkepa]

>Hence you gain nothing

You're saying you get nothing, but you perhaps underestimate how time-consuming and expensive even the easiest company shut down in the Germany is. (I had a very smooth process winding down my company in the UK - you have my very sincere sympathies that things are a bit rockier for you).

>if your main shareholders and directors are physically in Germany and you reseat the company to where-ever, Germany is going to see and act like this is a de-facto German company. Hence you gain nothing, you get more paper work.

Looking online, here's a german tax-advisor who talks about the strategy of liquidating your company by first merging it with a uk company, saying you can close a company in 4-6 weeks by this process (though they recommend against it after brexit for liability reasons, but mention Ireland and malta as options). In germany you have a year of waiting, and lots of additional notary/accounts work. (OTOH, I don't know how you get it down to 4-6 weeks and avoid the uk's company house gazette notification period - they must pick a different kind of company - if your fees for closing down a company in germany are going into the thousands (or tens of thousands) for notaries, liquidators fees, and the like).

https://www.stmatthew.de/brexit-gmbh-sitzverlegung

Once again, not my specialty area, I just...wanted you to know that it does happen, is a specialty area of work for some companies, and it's presumably not irrational behaviour.

[melenaboija]

I am a European living in the US and my god I am tired of hearing this over and over again. If your biggest hurdle to start a company is the paperwork you’ll have to do for one week, you better think of something else.

And yes, there are other way bigger issues in my opinion, such as financing and even social support.

[nickff]

If the paperwork ended after one week, it wouldn’t be so bad, but it’s just the tip of the iceberg.

[melenaboija]

I don’t understand why people pretend there’s no paperwork to do in the US. Not only that, but different states have different processes.

I think there are some misconceptions about the US and tend to over idealize, especially around paperwork and taxes. And I think it’s precisely that misconception that makes it appealing to foreigners and makes it an attractive place to be an entrepreneur.

And again, yes, objectively it’s easier, but I don’t think that’s the main reason the country is successful in this aspect.

[nickff]

I agree that paperwork requirements exist on a spectrum, and I am only familiar with the requirements in a few different jurisdictions (though I've read a few comparisons with a wider variety).

The USA's success is definitely not entirely due to a lack of paperwork requirements, though I believe the paperwork requirements are something of a microcosm of other issues in each jurisdiction.

[baby]

Having a startup in the US is a huge mess due to all the states and taxes, if Europe can make everything digital AND easier, it's a no brainer for us to move our company there.

[zdragnar]

Why would moving to the EU mean you don't have to deal with states and taxes? Would you abandon the US market completely?

[baby]

We have clients all over the world

[glimshe]

There are many companies that deal with this complexity for you. Online payment processors and e-store services for instance. Source: I have an US company, sell products to all states and don't deal with this.

I think you're the first person I've ever seen in my life saying "I moved my company from the US to the EU and now my business owner life is so much easier"...

[ExoticPearTree]

> Having a startup in the US is a huge mess due to all the states and taxes

Not really, there are services like Avalara that give you the exact tax amount you need to collect from your customers once they fill in the shipping address.

[tick_tock_tick]

> Having a startup in the US is a huge mess due to all the states and taxes

Not really there are literally companies as a service that take care of everything for next to nothing. It's actually kinda crazy how you can be up and running in under a week in the USA.

[bluecalm]

>>Having a startup in the US is a huge mess due to all the states and taxes,

In EU you will need to deal with VAT basically from day one (10k EUR of revenue). In US you will not deal with it until you can afford it as thresholds are very generous.

[embedding-shape]

If dealing with VAT is a large problem for your business today, running a business might just not be for you, it's very trivial today to get it right and there are even platforms who basically does all the "hard" work for you. But even without those 3rd party solutions, I think the complexity is vastly oversold, it's relatively easy to get right compared to other regulations. Maybe I'm just EU-damaged already though, YMMV.

[bluecalm]

>>If dealing with VAT is a large problem for your business today

It's not a problem for me today. It was a big problem when I had no revenue, needed to do all the paperwork, meet ridiculous local accounting requirements connected to selling software in a different currency than my local one, write code, setup licensing, shipping the software to the clients etc.

It was a major source of stress and sleepless nights for me.

>>But even without those 3rd party solutions, I think the complexity is vastly oversold, it's relatively easy to get right compared to other regulations. Maybe I'm just EU-damaged already though, YMMV.

It's easy when you have done it once and know the process. It's not so easy when you need to understand if your product meets a definition of an electronic service or something else, when accountants you are meeting don't know how to setup VAT-MOSS thing because it's still rare or when you need to add your tax authority about something and their reply is that they don't know so you need to write an official inquire (that requires a lawyer) so you can get your answer in a few months.

When I was setting a new company in another country it was easier for me because I already knew how the process work and I could hire a competent accountant before the new company had any revenue. It wasn't so simple when I had 0 capital and just wanted to ship software to see if people want to buy it.

[embedding-shape]

> It's not a problem for me today. It was a big problem when I had no revenue, needed to do all the paperwork, meet ridiculous local accounting requirements connected to selling software in a different currency than my local one, write code, setup licensing, shipping the software to the clients etc.

Since this depends mostly on what country you are in/you are setting up the country in, what specific country was this? Because it's not the same everywhere, and by the sounds of it, is a lot more complicated than most other EU countries. Germany is famously bureaucratic, as just one example, and differs wildly from the type of experience you'll have in Sweden.

> It wasn't so simple when I had 0 capital and just wanted to ship software to see if people want to buy it.

Most people, accountants or not, won't tell you this, but you're usually fine starting to charge people and running a business "unofficially" for a couple of months without having to pay any fines or anything when you finally "regularize" your situation. Many accountants have dealt with this sort of setup countless of times too. But again, people won't advice you to take this route, but it is one option if you just wanna ship software and see if people want to buy it. If no one buys it, just don't tell anyone :) Unless you're doing five figures or more in revenue, no one will mind.

[bluecalm]

For me it's very stressful to not comply with the regulation on purpose hoping I am too small to not get punished by the authority. It would be easier to just ignore the regulation. I get this makes me not well predisposed to do business in EU. Thank you for your advice.

[philipallstar]

Dealing with anything from day 1 is harder than doing it later when you have predictable money and growth.

[embedding-shape]

Hence most countries has a threshold for when you need to charge the country-specific VAT and let you use the local one until you reach there. It differs by the country as far as I know.

[niemandhier]

At least in Germany, this is not correct. You do not have to pay that unless: You earned more than €100,000 this year or more than €25,000 last year.

[alibarber]

But there is no threshold for cross-border selling in the EU.

Fine if you're selling widgets at a market in Germany - but if you sell software abroad, make sure you're following [each] one of the 27 VAT codes correctly.

(From what I understand - would love this to be wrong)

[yujzgzc]

Following US sales tax has way more complexity. In my county alone there are many different rates depending on the city in which the sale is made. Even just finding out authoritatively which jurisdiction to pay taxes to is nontrivial, practically impossible to solve without dedicated software.

[friendzis]

> Fine if you're selling widgets at a market in Germany - but if you sell software abroad, make sure you're following [each] one of the 27 VAT codes correctly.

Yes.

> But there is no threshold for cross-border selling in the EU.

Kinda, but misinterprets the VAT itself.

Basically, VAT is paid at the point of sale and local thresholds apply.

[bluecalm]

>>Kinda, but misinterprets the VAT itself.

>>Basically, VAT is paid at the point of sale and local thresholds apply.

The threshold is 10k EUR (total sales to EU). The point of sale in case of software/electronic services is the country of residence of your customer. You need to collect two pieces evidence of that location, usually billing address and IP. If those don't match (your customer has used a VPN for example) you need a 3rd piece.

One Stop Shop helps with it (when I was starting my company it didn't exist and predecessor VAT MOSS was just being introduced and no one knew how to comply with it) but you still need to charge local VAT rates and report quarterly.

[manuelmoreale]

I think they're referring to this https://europa.eu/youreurope/citizens/consumers/shopping/vat...

[anonzzzies]

You can just use a service for that if you find that too much work to do yourself. There are MoR services that do that for you for EU, AU, US states where it is required etc. It is more that most people outside the EU find it bullshit and just don't do it and complain about it anyway.

[seec]

They won't be able to solve the problem. The only reason all those roadblocks exist is to control/regulate everything in a way to ensure the maximum possible taxation. At the same time, bureaucrats get to justify their existence, pretending to do meaningful work while they only take from productive people.

You can't even say they manage to regulate actual problems; they only reinforce the big players. The cookie consent banner nonsense and ongoing legal fight with Apple (and GAFAM in general) didn't bring anything of value to end consumers.

Cookies haven't disappeared; they have just become a major annoyance that you have to spend a lot of time clicking on and tracking hasn't been reduced, quite the contrary. The iPhone is still a locked-down device, with Apple maintaining a monopoly on software access as well as repairability (their repair program is such a joke that they should be tried for contempt if the EU actually had any power).

Bureaucracy is just cancer, and the EU is fully metastasized; there is not much that can improve until a major failure happens.

If you want to create a business, you have to pay the bureaucracy before you even make a single cent. Business has become more profitable to the government than the actual business owners; those thriving are the big ones who can afford to play the lobbying game and engage in regulatory capture and offload most of the cost on the taxpayers while profiting overseas.

[lossolo]

> There needs to be UX requirements on the process from day one against which the end result is judged. (E.g. "a company should be able to register in x days", "a complete application should be no longer than y pages", "application costs should be less than z euros").

It was announced you will be able to create company fully online and will have it ready in max 48h.

[adamcharnock]

Agreed. The one bastion of sanity in all this is (/was) the UK. I formed my first company there, 18 years ago, online, in 30 minutes, for around £20.

I then moved to Portugal and started not one but two companies there. The whole process is so clearly setup to discourage people from actually forming companies. Everything from the attitude of all involved ("are you sure?!"), to the practical bureaucracy and costs involved.

I thought perhaps Portugal was just an outlier. But then I moved to Germany. And just wow. Definitely worse. Rounds of paperwork, notary offices, and fees. A process taking weeks. And for a GmbH a minimum investment of €25k. Sure you can form a UG. company for €1, but that effectively just announces "don't trust us, we're tiny" (IMHO).

It is something that really saddens and frustrates me with the EU.

Edit: And sure, you can form an Estonian company. But then you have to try and fly under the radar with regards to the 'permanent establishment' rules.

[notpushkin]

> And sure, you can form an Estonian company. But then you have to try and fly under the radar with regards to the 'permanent establishment' rules.

It depends on what you’re trying to achieve. If you want to do some tax optimization shenanigans, then yeah, don’t think it’ll work for you (if you’re in the EU, at least). But if you just want to set up a small to mid-sized company without dealing with German bureaucracy, I think Estonia is your best bet right now. I don’t think (IANAL) you would get into trouble for having a permanent establishment – you’ll just have to still deal with the DE tax office. But if EU-INC really can unify the processes for all countries, I’m all for it!

> The whole process is so clearly setup to discourage people from actually forming companies.

By the way, it’s really backwards in Estonia. I’ve seen zero sole proprietors when I was living there – everybody just opens an LLC.

[torginus]

Is this a true problem in EU (or indeed anywhere)? I don't think starting a company is the bottleneck, it's mostly the inordinate amount of regulations one has to comply with, as well as the strenuous laws around letting workers go, while making people work as contractors being also frowned upon.

I'm not sure how any one these is going to change.

[wolvoleo]

Those things are as designed. This is good. We don't want "at-will" employment like in the US. We want to have rights as employees. We want to have social welfare. We want our free healthcare.

It's not a bug it's a feature. We don't want an American-style society. Current developments should be enough reason to understand why (and the understanding that Trump's backers are part of a huge group of people on the low side of the wealth gap). If anything we have too much of that already hence the rise of extreme right here too. It's a result of the austerity movements after the 2007 crash.

But this new regulation doesn't invalidate employee rights no. It's just about registration and incorporation.

[galangalalgol]

Free healthcare and social welfare I'm in agreement on. But why does at will employment need to conflict with that? The problems of wage values, food and shelter, and healthcare can be handled completely independently of employment. If someone feels it is too easy to do nothing without requiring employment to gain some of those benefits, you can have the government as an employer of last resort. But making it easy for anyone and everyone to start and maintain a business is a societal good. We are asking why doesn't a person have guaranteed employment, when we should ask why do they need it. If a person was let go and could with empty pockets be assured of food shelter and healthcare, and also be able to start their own company on the way home from being let go, that is the society I'd want to live in.

[wolvoleo]

At will employment is something we'll never accept here. We don't need the threat of having nothing from one day to the next.

It's good for billionaires but not for actual people that matter.

Running a business is not something everyone should have to do anyway. It's good if it's hard. That keeps the cowboys at bay.

I would never ever want to own a business. I don't need that uncertainty. I just want a stable wage.

The prevailing idea here is that the US is best at everything and its model will always win. But in reality it's been in decline for a long time and it's become a pretty toxic society I don't want to see here in Europe. Trump is only a symptom of that but not the cause. The real cause is a top layer (which many HN commenters are part of) that is getting ever richer and a huge disadvantaged mass that is stagnant or declining. Their anger is what drives MAGA. Also called late stage capitalism. Going even more capitalist is not the way to fix or prevent that.

[galangalalgol]

I agree with everything you said except for the cowboys bit. I don't think business owners should be a separate class of people. It shouldn't be unusual to meet people that own their business. I don't want to do it, it would stress me. But we can let random people try random ideas without having to start out wealthy, and we shouldn't have the failure of that business and the loss of those employees' jobs, risk the health and well-being of those let go. If getting fired just meant you had to do with fewer luxuries until you found another, we wouldn't need to protect those jobs to the detriment of a business. By tying employment to safety and well-being, we complicate the whole matter.

[tick_tock_tick]

Most people in the US own stocks the USA is "fixing" this by making everyone part of the owner class. Especially now with childhood investment accounts by the federal government (the "trump accounts").

[wolvoleo]

By cowboys I mean the people starting businesses left right and center and just collapsing them when they don't get the desired result straight away. E.g. US venture capitalism. I think it's a really good thing that we don't have that here in Europe. Sure it prevents the googles and metas but those would never have made it that big here anyway because we regulate big businesses before they become uncontrollable. And now that we are breaking off ties with the US we will have to build our own anyway, just with sustainable and fair business models.

Sure we can get society to pick up the tab but the problem is that those cowboys are even more incentivised to be risky then. There should be a penalty for them when it goes wrong.

[ragall]

Various places in Europe already have what amounts to at-will employment. There are exemptions for companies under a certain number of employees (e.g. 25 in Italy). There's a wide use of fixed-term contracts (6/12 months). Many work through agencies, which means they can be "fired" with a few weeks' notice.

[embedding-shape]

Depends a lot on what country, but I think you'll find that the ratio of full-time employee vs contractor/at-will employee in most European countries will look very different from how that ratio looks like in the US (or other similar countries).

[wolvoleo]

Not really. Fixed-term contracts can not be used indefinitely. A worker must be permanently hired after the first extension. Agencies can not be used indefinitely, and also, the agency is required to support the employee after the client lets them go. So the company just pays to shift that responsibility but the responsibility towards the employee is there. A company is also not allowed to make an employee 'self-employed' by making them start their own company. They must always have multiple clients, if they have just one the government will consider it permanent employment with all strings attached and will apply all relevant restrictions and taxation retroactively.

I'm just talking about holland here but all over europe the conditions are similar.

All the exceptions you mention were just sly ways the companies have tried to circumvent their responsibilities and the law has caught up with regulations to make those impossible or at least impractical.

And there are some exceptions yes. But those are mostly for in-between gig jobs. Not for stuff people make a career out of.

Of course there are also exceptions with easy firing for things like gross negligence. Though the employee always has the ability to countersue.

[tick_tock_tick]

> The prevailing idea here is that the US is best at everything and its model will always win. But in reality it's been in decline for a long time and it's become a pretty toxic society I don't want to see here in Europe.

If the USA is in decline you must consider Europe a failed state at this point then? Nearly every wealth inequality issue is worse in Europe then the USA. Youth unemployment has become a permanent fixture of society, your housing affordability crisis makes the USA look really good, most of your nations can't afford to keep social services at current levels and will be cutting them over the next decade, and you need to actually spend on military now that's just going to happen faster.

It's kinda funny by trying to avoid "late stage capitalism" the EU is going to force themselves into it as quality of life and global relevance continue to fade.

[wolvoleo]

The EU is not a state.

And no, wealth inequality is much higher in the US: https://worldpopulationreview.com/country-rankings/wealth-in... . And those are averages, we don't have people making 100.000x more than others.

We also have wayyy less violent crime: https://worldpopulationreview.com/country-rankings/violent-c... , and much less people in prison per capita

LGBTQ+ rights are way better covered here (with the exception of a couple countries that should really be booted out of the EU). Also really important for me.

We're doing pretty good, we will have some challenges going forward but that's always the case. Military equipment is something that we're now buying a lot from the US where prices are really high, and once we move that to European vendors we can get a lot more for the same money (this is similar to how Russia manages to have so much military power on a country with a GDP similar to Italy: they make it themselves with their own purchasing power).

The one challenge to the EU is not to fall into the austerity trap as they did in 2007 though. And we don't need so much. I don't need or want a car, a big TV, daily takeaway coffees etc. Less consumerism is also a good thing.

[WarmWash]

The EU has a borderline stagnant economy, couldn't defend itself from Russia, facing population collapse, totally whiffed on the tech scene explosion in the last 25 years, now also missing out on AI. European social obligations are expensive, yet nobody seems to really want to stress about creating new sources of wealth.

At some point Europeans need to look in the mirror, and understand that the last 30 years has been a vacation, and even worse, there is now a whole generation who was born on vacation and thinks it's the norm.

[wolvoleo]

We can defend ourselves, it's just that the US didn't want a too-powerful Europe until trump. In particular nuclear. They heavily pushed against that.

We'll have to scale this up now but it is not a big problem.

Population collapse is a good thing. We already have too many people in this world, causing environmental and housing issues. We can't keep ever growing as humanity, stabilisation or even a reduction is very good. It'll cause some short term cash flow and elderly care issues but we'll deal with that.

And AI so far is more of a hollow promise and hype. It's not a race, the way America is approaching it it's inevitably going to lead to a bubble collapse.

[codingcodingboy]

"In particular nuclear. They heavily pushed against that."

Saw this yesterday related to nuclear deterrence in Italy.

https://x.com/NichoConcu/status/2012882747434426605

[sbacic]

> Population collapse is a good thing.

Unless your welfare state depends on a growing population. Which is the case in many EU states.

I'd also argue that overpopulation is not a problem in Europe.

[pbhjpbhj]

We should definitely go all in on a perpetually growing population, what could possibly go wrong.

It's going to hurt, but that's what happens when people don't look to the future and do everything out of greed. The sooner we stop population growth the better.

[WarmWash]

Europe didn't want a too powerful Europe until Trump.

Are you going to look me in the eyes and say that you, and your general Euro brethren, have been pushing for a greater defense budget at the expense of greater social program spending for the last 30 years.

Please, please make that statement. C'mon...

This is the same Europe that thought it would be a good idea to buy gas from Russia, the same Europe that thought it would be a good idea to have a fully American tech stack, and the same Europe (whose largest company is an automotive one) that is importing cheap Chinese cars.

Anything to avoid having to leave their 30 year vacation.

[wolvoleo]

No, but back then the US was a trusted partner. They wanted to provide military protection in return for geopolitical influence. Both are gone now of course.

However I don't think we need a huge military in terms of boots on the ground. We just need a nuclear umbrella to avoid the likes of Putin to roll into europe. Most of our foreign military adventures were requested by the US and only about oil, not safety related. Even the nato article 5 afghanistan trip was completely useless (bin laden wasn't even there, afghanistan had nothing to do with the attacks and since everyone pulled out things are 100% back the way they were).

And yeah we bought too much American tech and chinese manufacturing (but so does America obviously). Cars aren't that important to single out, a lot of us don't even have one.

And Europe was a lot more socialist > 30 years ago. It's the last decades that the neoliberalists (including the EU itself which has strong neoliberal underpinnings) have been hollowing out social protections in favour of business.

This is what I mean when I say the US model isn't necessarily the best. Americans are often completely convinced of that, that there is no other way than ultracapitalism and heartless social policies. I absolutely don't agree there. The US is best at making some people insane amounts of money but it's not great for social cohesion and a decent life for everyone.

[usrnm]

Refusal to learn and change, even if it means learning from people you disagree with, is simply arrogant and stupid. The US is the biggest economy in the world with the strongest tech sector in the world, they are obviously doing something right. And many personal accounts from people doing business in the EU in this thread show that the EU is doing at least some things wrong.

[wolvoleo]

We don't care only about money. We're doing pretty great, we have some issues like housing cost but the US has those too. I'm happy with my life and I don't feel like there's something missing that having more money would fix. Less employment and welfare rights would cause a lot of worry and uncertainty though.

It's not all about economy and getting ever more more more like the US. I'm pretty happy living here and I would never move to the US. In fact right now I wouldn't even visit it but hopefully the status quo doesn't last forever.

And it's not all about business. But about people, the employees.

[thewebguyd]

> And it's not all about business. But about people, the employees.

Everyone here is missing this critical point.

The USA does not value human life as having value itself outside of what someone can contribute economically. Everyone talking about GDP, and "missing out" on AI, tech, etc.

Life has value outside of economic contributions. It's not a matter of "missing out" it's different priorities and philosophies of how to structure a human society.

Endless growth is not sustainable, and the late stage capitalism happening in the US right now is not sustainable. Why would anyone want to model themselves after it, seeing all of its failures and the enormous wealth gap it has created?

[ExoticPearTree]

> We don't want "at-will" employment like in the US.

Only lazy people want to be employed for life somewhere. All the benefits, no responsibility.

[wolvoleo]

No, we still work. Just want some continuity. Not working for a company without direction chasing the latest fad and dumping everyone if it doesn't work out, but a good company with a decent business plan.

[cowl]

Is someone forcing you to work at a company chasing the latest fad? You go and choose the type of company you want. The keyword here being "Choice".

There are plenty of workers that would not mind carring a little more risk in those companies for better pay, and those companies could offer better pay if not made to jump through loops.

Classic Example is the "Consultant" contracts.

Companies are paying through their nose to hire "consultants" because it's the easiest way they can try a new idea that might not work.

Company A pays Company B 1k/day for that "consultant", Company B does not have enough capacity so gets that "Consultant" from Company C for 700/day. Company C does the same and gets the consultant from Company D for 500/Day. Company D actually employs the consultant and pays him 200/Day. In this whole useless chain build to avoid the "can not fire even if your projects doesn't work" Both Company A and the actual Employee are losing big, Both would be much better having a direct contract for 500/day with the understading that this might not work after all.

Notice that for that Employee, stability is not there even now. yes he continues to be employed by Company D When Company A stops the contract but he is effectivly moved to another Contract with Company X. he is effectivly changing Jobs, new reposnsabilities, new collegues, new rules etc. only in the eyes of the state he is not changing jobs.

[mlunar]

You are thinking of the continuity of work, colleagues, and responsibilities. Those are of course good to have, especially from the perspective of the company.

But from the perspective of the individual worker, a much more important continuity is the one of salary, insurance, and pension. This is the stability that the employee continues getting at Company D.

[ExoticPearTree]

Then go be an entrepreneur and create a company with no risk of failing. And let us know how that works out for you.

[wolvoleo]

I don't want to be an entrepreneur. And it doesn't have to be riskless. Just to have a good business (plan).

But this is the status quo in Europe. Companies are forced to take failure into account before they dive in deep, because it will cost them. Provide benefits for their employees, etc. This is good. Companies exist to provide jobs. Not only to make money for the owner and externalise all the negative effects on society.

I just don't understand the desire to turn the EU into the US. If you like how business in the US works, just start your business there, not here. Meanwhile I as a worker would never consider moving there. This way we can both get what we want.

[socksy]

Good thing then that there's a range of options between being let go immediately for no reason and companies being forced to employ bad employees for life.

[wolvoleo]

Yes and that's basically what we have in most of Europe.

Only France really has a bit of the latter.

You can get rid of employees. You just have to show to the court that is necessary. Circumstances depend on whether it's individual performance or business need etc.

But the at will is very harsh and we don't want this here.

[anonzzzies]

In NL I guess that is similar to France; in our case we always started a binder on a new employee so after their trial period/temp contract, we continue collecting info. If that person just waited for the trial to be over to just do nothing, we go to the court with the binder and get them out. We stopped after a certain period depending on what we collected so far: most binders are empty anyway. Also, you can fire someone without that if you have economic cause (which should be the reason for firing someone good) or you can fire them without that by paying them some months in the future.

The most annoying people, which we didnt have many but still a few, are the ones who, right after the trial period, or when they smell a rat, will go 'oh no, i feel something behind my eye and in my wrist, your work made me ill' and then go home. you would have to pay them and be nice about it (not threaten them with a beating).

[joe_mamba]

AUstria (and especially Switzerland) has virtually at-will employment. No need to show anything to any court, just the notice period. Job security is virtually non existent.

[xattt]

> a complete application should be no longer than y pages

The monkey’s finger curls. All contract text is now sized at 2 points.

[mytailorisrich]

There really is no reason for it to be longer, more expensive, and more complicated than what exists today in, say, the UK where you can do it all online for about £20 (or is it £50 now?) and complete in a matter of hours.

This is really down to individual countries' red tape and suspicion.

The risk element is also not at all attached to forming a company (hence why it can be so simple and quick), it is with funding and finance. So banks will want to see a business plan but the company registration office does not, or should not, care.

[te_chris]

Truly, this is one of the greatest losses of the UK leaving. For both parties. Advising EU startups on where to incorporate that isn’t London could be so much simpler.

[whateverboat]

What about Luxembourg?

[embedding-shape]

If you have to setup a company today, and want the easiest path to EU-wide SaaS, probably Estonia is the way to go, very easy for EU citizens (don't know how the experience would be from outside, if it's even possible).

[Tangurena2]

It seems easy enough for US residents as well: https://www.e-resident.gov.ee/nomadvisa/

Checking the requirements, it seems to me that any "first world" citizen would encounter a low barrier for entry, with exceptions for Russians ("second world" citizens).

[psychoslave]

Interesting https://eurosaasedge.substack.com/p/the-estonian-saas-formul...

[MrJobbo]

Too bad that Estonia won't exist after 2027...Russia will gobble it up alongside Latvia and Lithuania.

[embedding-shape]

Yeah, such a shame Estonia isn't in NATO nor the defense clauses of the EU, so they're sitting there all alone at the border...

[belter]

Avoid Luxembourg like the plague unless you are a company like Amazon. And even them are making a massive mistake form a governance and risk management point of view of being based there. But they have their tax deal...

[codingcodingboy]

Can you explain why?

[belter]

Where should I start... :-)

- They are optimized for Big funds, Holding structures and Multinationals If you are a bootstrapper, or small company or any early stage startup, the ecosystem works against you.

- Setup costs are absurdly high if you include Notary around plus possibly Lawyer, Bank onboarding plus accounting you are looking at burning €10k to €20k easily before making a cent.

- The scourge of the state Fonctionnaires. Untouchables and incredibly well paid state employees. One told me would take care of my long delayed VAT returns... AFTER they would return from their long summer holidays in Switzerland ...

- It only works if you have some special deal like the famous Mr Marius Kohl also known as Monsieur Ruling used to do... "Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg" https://www.icij.org/investigations/luxembourg-leaks/leaked-...

- Banks will treat you like a criminal by default and assume, you are laundering money, or hiding taxes and you are compliance risk. They have extreme KYC requirements, and do account freezes for trivial reasons.

- Accounting is rigid, expensive, and slow. Taxes are not low in practice. On paper, it all looks good, but in reality they have the Corporate tax and municipal tax. Many complex withholding rules and limited deductions unless structured perfectly.

- The legal system is slow and formal. Everything takes a lot of time and a LOT of paperwork with more costly intermediaries. Small changes like directors, statutes will force Notary, Formal filings, Delays.

- The ecosystem is completely closed and relationship driven and the few startups like Talkwalker and Doctena are coming and financed from local families. Luxembourg runs completely on local networks and specially reputation over merit. If you are not local, from finance, or law or government circles you are invisible.

- Incredibly promiscuous relationships between the banks, law and legal professions, with a permanent revolving door between local companies and banks management and government officials. We are talking about less than just a few hundred people. This means Luxembourgeois families with long term historical relationships. Good luck on any legal or business dispute between you...and a local, who is a cousin from the local judge or government official....

I have had the chance of setting up and running companies in many countries. Specifically for Europe, currently I would suggest as two best options right now: Estonia and the Netherlands. Avoid France, Luxembourg and definitely avoid Germany.

[codingcodingboy]

Wow thanks for the long reply, unfortunately many if not most of your points are common in all of Europe. I asked you to clarify because I am not only curious about the topic but I strongly believe that these issues should be talked about way more frequently and reach when possible the general population.

Most people are completely unaware of the risks and difficulties of running a company in our countries.

In Italy for example the tax agency operates on a model that is often no different from extortion and innocent people can suffer greatly because of it, I have seen it happen.

I am skeptical that EU Inc will solve all the main problems or even that it will become reality at all but let's see.

[anonzzzies]

> Banks will treat you like a criminal by default and assume, you are laundering money, or hiding taxes and you are compliance risk. They have extreme KYC requirements, and do account freezes for trivial reasons.

I see that everywhere though; my banks in my birth country NL, one of which I have used since I was born (my parents made an acc obviously) half a century ago treat me like that every year. Achtung! We are not sure who you are, provide a lot of paperwork or else! Worse even in other countries. And they are all very afraid of US residents.

[erispoe]

You don't need business plans and all that stuff. The problem in Germany for instance is that a GmbH needs 25k of capital + expensive notarization. These are the only two things that need improvement.

[rmoriz]

You can start an Unternehmergesellschaft (UG) within days with a template. However tax filing burdens will costs you around 2000€ baseline a year without having a single Euro of revenue let alone profit.

[anonzzzies]

In NL at least some of that changed; no more payment. It used to be 19k guilders and after about half in euros. Now nothing. The rest still the same.

[Jean-Philipe]

Came here to say the same. Founding a company in Germany is way to complicated and expensive... same for dismantling a company. I don't understand why you need a notary for everything.

[anonzzzies]

Clear right? Because of notaries? They are powerful as everything official goes through them. They also do nothing usually; their underpaid underling presses a few buttons, enters a few names (often wrong the first time), prints and so on and then notary reads and signs. Money made. Luckily this has been changing a lot that some notaries smelled a rat coming and started to go for mass market, heavily undercutting all others for standard contracts; in some cities I have seen these type of places eating all the other ones. They are fast and cheap until you need custom stuff.

[sschueller]

I agree on application costs to be less but I believe a company needs to bring some capital. In Switzerland you need to pony up 20k in startup capital for a GmbH or 100k for an AG (ignoring the 50k work around), it belongs to the company but guarantees some security for customers and vendors that you aren't just going to take their money and run.

In Switzerland you don't even need to collect VAT until you make at least 100k a year so I find requiring some capital ok.

[jaggirs]

You can pony up however much money you want and show customers the founding document that says the amount the company was started with. I believe it's usually publically available even.

Forcing certain minimum amounts is just arbitrary gatekeeping and prevents companies that don't need that 'trust' and don't have the money from being created.

[logicchains]

>My worry is that the end result will require notarized declarations of honour, financial plans stretching decades into the future, 30 page business plan documents, reams of corporate governance documents, and tons of other nonsense to protect against the perceived risk that someone who failed at starting a business once fails a second time.

That sounds like a really good use for AI.

[amunozo]

It is, it is what I used in my PhD for dealing with the Spanish bureaucracy and university.

[mminer237]

You mean to process it or to make up stuff to satisfy the regulators?

[regularfry]

"It is a mistake to optimise something that should not exist in the first place." - Elon Musk (apparently, although I would be astonished if Deming or Ohno hadn't said something similar)

[amunozo]

I agree, but us individuals cannot change the system that easily. But we can use these tools.

[ThePowerOfFuet]

>That sounds like a really good use for AI.

No, it is not a really good use for a word prediction engine.

[miki123211]

In Europe, there are two parallel realities which coexist, have some influence over one another, but are ultimately somewhat separate.

There's the real reality, and then there's the reality as it is perceived by the bureaucratic apparatus, the "upside down." It's important to realize that everything in the "upside down" must be consistent with the rest of that reality, but not necessarily with what actually happened in the real world. The closer your activities get to the government and government scrutiny, the more true that description is.

Did John have to go somewhere on Monday and finish his work on Saturday instead? He could have filed for time off and then gotten special permission to work on Saturday, but that's far too many forms with far too many signatures. It's just easier to pretend (on all documents, yes all of them, the "upside down" demands consistency) that he did in fact work on Monday and did not work on saturday. Americans call it fraud, Europeans call it Tuesday.

[ThePowerOfFuet]

In the European countries (yes, plural) in which I have lived, _most_ (admittedly not all) employees would decline such a request as abusive and illegal, and employers which insisted would be on the hook for damages were they to insist.

[trueismywork]

This is the truth.

[trueismywork]

Everything else is much more expensive so AI is actually the cheapest and only viable option. I mmm

[truekonrads]

You can start a business in Estonia in 2-3 days and get e-residency there. Sample incorporation business (no affiliation): https://enty.io/en/incorporate-estonia

Go Estonia!

[dzonga]

UK has been the easiest place to form a LTD

but UK sucks with reporting requirements - now they even require IDs for directors

if EU-inc can have incorporation costs of less than 30£ - then no reporting requirements if say revenue is under 200k then yeah its a win and no other BS like notaries etc

[breakingcups]

What's bad about requiring IDs for directors? Surely you'd want to verify their identity?

[Gravityloss]

Yeah, since there's lots of countries and some are very dynamic and modern, maybe they could act as early adopters. But don't stop there: if it works for the early adopters, others could also apply their lessons. For example Estonia is often mentioned in electronic government etc.

[wicharek]

In my experience it is very easy and pretty cheap to start a LLC in Poland.

[ErikBjare]

Those requirements should include "estimated setup & recurring administrative costs for businesses of size x to comply should be lower than y" in some way.

[Daniel_sk]

Dissolving an LLC is a in ideal case a multi month process. It's often easier and cheaper to just keep the LLC as zombie instead of trying to dissolve it.

[trollbridge]

Didn't Estonia solve this problem?

[TacticalCoder]

> It's inordinately difficult and expensive to start an LLC or SA in some EU countries.

Totally.

One of the biggest and most horrific aspect of it is the KYC/AML. We regularly read articles explaining that drugs are so out of hand that several EU countries, like Belgium, are becoming narco-states: these are front page, major newspaper, stories. We also read articles explaining that cash bills from petty drug dealing are "necessary for the underground economy of the poor oppressed people".

Official numbers say 2% to 5% of the world's global GDP is tied to criminal activities.

So major drug trafficking is ongoing and that money is definitely being laundered.

Yet when regular people like myself want to open a company, the gates of the KYC/AML hell do open.

Bureaucrats and many people at various institutions like banks, notary, etc. do believe that the KYC/AML meant to catch actual criminals is actually a greenlight to go full stasi-mode on everyone.

Things go, literally, a bit like this:

stasi agent: "Source of funds: where do the 50 K EUR of capital come from?"

honest person: "I sold at 600 EUR shares of Meta I bought at 60 EUR in 2015 (making that up), here's a printed copy of both the buy order at the bank in 2015 and the copy of the sell order, at the same bank, 10 years later."

stasi agent: "Nice try! Where did the 5 K EUR you bought those Meta shares with in 2015 come from?".

The above is, literally, happening. It happened to me. It happened to people I know.

At one point I had no trace because I had to go so much back in time that the bank wouldn't give the proofs anymore: and it cost something insane like 25 EUR / month per account to get old infos. So for say four accounts we're talking 1 200 EUR per year to ask for old bank statements.

I'll remind everyone that a principle in many EU countries is that if there is no suspicion of fraud there's a delay after which the IRSes cannot legally go back. They have to prove that there's potential fraud to be able to go back more than, e.g., 7 years.

But the stasi-agents working in KYC/AML at banks, notary, etc.? They believe they have a mission to make regular's people life hell.

Oh and a good one: you think it's bad that legitimate citizens to denounce illegals? You wanna me to tell you about the phone numbers the governments put in place in many EU countries so that citizens can denounce other fellow citizens "because they believe they're frauding the IRS"? How's that one? Where's the outrage?

In my native country of Belgium I heard that at least one in every four solo-preneur ("independant") / entrepreneur has been the subject of at least one such denunciation.

Stasi.

Also totally counter-productive: when everybody is a suspect, nobody is.

I see on LinkedIn people whoring their profiles to would be employers by boasting about how many SARs denunciations they made (Suspicious Activity Reports).

Stasi agents.

And then don't get me started on people who are just bitter and sour because, in the EU, they may be net 3 K to 5 K EUR a month, and yet are authorized to KYC / AML on people owning Porsche and Ferrari, hundreds of thousands or millions of EUR worth of equities/investements, expensive real estate, etc.

These people cannot comprehend, in their own little minds, surrounded by people limited the same way they are, that there are people out there who are just legitimately more succesful than they'll ever be in life.

Their bitterness and jealousy turns them into little stati agents.

Bank menaced to not only not open my company's account but to close not just my account but also my wife's account. I had then to spend three weeks, full time, while my wife was on vacation (I sent her on vacation and stayed to produce the papers for the stasi), to produce a 49 pages (49 fucking pages) document full of proofs going back more than 10 years. Only to create a company and bring 50 K EUR in capital.

Just fuck this entire system.

You simply cannot hate bureaucracy enough.

> It's even difficult and expensive to _stop_ an LLC and dissolve it.

It's some countries it's near mission impossible. A friend of mine who had the equivalent of a LLC in Belgium who was then acquired by an US company spent 10 years to close the belgian entity. And it's much worse than that: while they refuse to do what's necessary to close it, many taxes are due and keep on coming each year. But of course those did manage to close a company or who know someone who closed a company are going to say: "I had no issue, so there's no issue".

All of this really does feel like a dystopian bureaucratic nightmare, in the style of the Brazil movie. It'd be nice if more movies were produced in that genre for it's badly needed to at least be able to vent off with some well-deserved satire.

[Tangurena2]

All this "know your customer" stuff is fallout from 911. We in the US went bonkers as a result of 911 and what used to be tinfoil hat conspiracy thinking ended up becoming national policy.

[direwolf20]

As a reminder, KYC/AML is imposed by the USA on every other country in order to access the USD banking system, and the USA uses any excuse to cut off entities it doesn't like.

[PurpleRamen]

> Huge amount of risk and cost on founders

Better than potentially putting risk and costs on other companies, the country and/or it's citizens.

> nonsense to protect against the perceived risk

It's not a perceived risk. No rule is made without cases.

[pjc50]

> No rule is made without cases

I can generally reverse engineer from the UK Companies Act what the cases were, but many EU countries have much more onerous requirements for what seems like no good reason? Perhaps the cases were too long in the past and things work differently now? What risks are we talking about, anyway?