This comment http://news.ycombinator.com/item?id=1585844
spawned some discussion about placing your company in a foreign country.<p>I'm currently living in Italy, opening a limited liability company here would cost us at least 10k euros as starting capital (2,5k euros at least at the beginning) and roughly 4000 euros as costs for incorporating.<p>Most important to me, every change of shares would require another 3000+ euros in cost.<p>So I won't be able to give my startup employees shares easily - we may have a contract written that says (at the end of 2 years or when we sell you'll have % of the company) but that sounds like a pain. Or doesn't it?
Also, I couldn't be vesting shares if I done the written contract I said.<p>I would be still paying taxes in Italy so I would have no legal troubles in opening a foreign limited company.<p>I was thinking about an English LTD for the low cost and very low starting capital.
Also with similar low costs there's Ireland but I've been told companies aren't favorable to receiving ireland companies invoices because of some VAT issues (don't really know about this to be honest).
But I haven't found anything on the possibility of easy changing shares ownership.<p>So, I think it would be great for europe entrepreneurs if you could list these 3 things about your country limited liability companies:
-incorporating cost
-minimum starting capital
-cost for passing shares
I strongly recommend the World Bank Calculator comparing the ease of doing business in many different countries around the world (Excel Spreadsheet):<p><a href="http://doingbusiness.org/documents/Simulator_2010.xls" rel="nofollow">http://doingbusiness.org/documents/Simulator_2010.xls</a><p>Lists a comparison of any country you choose under the following headings:<p>- Ease of Doing Business<p>- Starting a business<p>- Dealing with Licenses<p>- Employing Workers<p>- Getting credit<p>- Protecting Investors<p>- Paying Taxes<p>- Trading across borders<p>- Closing a business<p>I'm from Ireland and many multinationals come here (or at least used to) for the pro-business climate (favourable tax laws, not much bureaucracy).<p>Using this calculator, we can see that the US is ranked 4th overall in the world for ease of doing business, the UK is 5th, Ireland 7th and Italy.....78th! I can see why you are considering this option.
For LLCs in EU/Romania:<p>* Incorporating cost is probably about 150 euro if you pay someone else do it, maybe even less if you want to waste time yourself. You need an actual residence.<p>* Minimum starting capital is 50 euro.<p>* An LLC doesn't have the notion of "shares" only owners (there may be multiple owners) that get dividends. Changing the owners is expensive (about the same as re-creating the company) and takes time nowadays (30 days).<p>If you want <i>shares</i> you need a share-based company which has a minimum starting capital of about 22.000 EUR and needs at least 2 initial owners.<p>Romania's advantage is the 16% flat tax and disadvantage is everything else (bureaucratic, always changing laws, high cost of hiring people -- social taxes, some corruption).<p>Generally I think it's bad to view incorporation through US lenses if you aren't doing business in US. The US economy uses shares much more as they basically use the stock market as a way to finance the company and shares as a way to loyalize some employees.<p>An English LTD is probably as close as you can get cheaply but unless it's also worth tax-wise, do take a look at the fiscal implications. You really want to spend time coding in a startup not playing ping-pong with the IRS (and accountant from) 2 countries.
It seems to me that an LtD is probably the best option because it's cheap, simple, widely known and used, London's easy to get to should you ever need to do anything in person, and of course it's all in English, which is likely a bit more universal than German or Estonian or something like that.
I'm really curious to hear if it's 100% ok to have a company in, say, the UK, and for all intents and purposes operate in Italy. I have heard differing opinions on this from various 'commercialisti' (accountants).
The European Union is going to introduce a new type of company, the European Private Company (SPE): <a href="http://en.wikipedia.org/wiki/European_Private_Company" rel="nofollow">http://en.wikipedia.org/wiki/European_Private_Company</a><p>One of the ideas behind that type is that it will be cheaper to move your company from one EU member country to the other, without closing down and reopening your company. As it will be a <i>european</i> company structure, the procedures to found it <i>should ideally</i> be the same in every member country.
I recently incorporated simply because it gives a level of legal protection and it was so damn cheap.<p>I used: <a href="http://www.company-wizard.co.uk/" rel="nofollow">http://www.company-wizard.co.uk/</a><p>The cost was 25GBP ~ 30EUR.<p>There are alot of online company registration services for UK Ltd's there is a fair bit of paperwork and you'll have to file UK returns, accounts and taxes. But recent legislation has made the whole process relatively easy.<p>The only extra expense I can see is you'd need to have a UK registered office. The above link offers a service of providing you with a registered office for 99GBP however others seem cheaper. For example:
<a href="http://www.companiesmadesimple.com/company-services-registered-office.html" rel="nofollow">http://www.companiesmadesimple.com/company-services-register...</a><p>Will provide a London registered office forwarding service for 40GBP per year.
As roel_v 3 said no other country in Europe can stop you trading in another country. You must pay tax on where the business is located. Where Irish companies are often used is to hold IP, a trading company then pays a royalty to the IP company. Where the business is located, for tax reasons is independent of registration. You need to get some professional advice on domicile of the business.<p>Irish companies are also useful in that they are quite easy to set up and maintain. The usefulness of them compared to the UK is that Ireland is within the Euro.
ITALY:<p>as I already said:
-incorporating cost: 4000 euros<p>-minimum starting capital: 10000 euros, 2500 to be paid in before incorporation<p>-cost for passing shares: 3000 euros
another reply by shedzi (about GERMANY):<p>"For this reason the german UG (Unternehmergesellschaft - Society of Entrepreneurs) was created. The investment can be chosen freely by the founders, the fees are very low (about 300 Euros) and the only drawback is that you have to put one quarter of the profits back into the capitalization."
a reply by fun2have in that sub-thread (about IRELAND):<p>"Separate corporate structure from where you base yourself. For example to start a limited company in Ireland with accountant fee's etc is about €300. Capital Requirement is €1. And that company can base itself anywhere in Europe. One of the advantages of the Single Market."