We're based in South Africa and joined the Stripe Atlas beta earlier this year.
Solving the incorporation problem is only the first of many problems.
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Please understand that none of the following is a criticism of Stripe. If we hadn't been accepted to the beta we'd be dead in the water right now and our customers would have been screwed. I also expect the solutions to become easier as more people in more countries face the same problems.
(Btw… one small suggestion for the Stripe Atlas team if anyone there is reading this… how about a forum where Atlas users in the same countries can swap information?)
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So, the questions you asked are completely legitimate.
Trying to answer them ourselves has cost us an inordinate amount of money on legal & tax advice so far and we're still no closer to answers.
The problem is this:
The moment you're operating in two countries you are subject to the same legal, tax & accounting rules that multi-national corporations have to conform to.
There _are_ existing services that are geared towards tackling the insane levels of complexity involved but the pricing also assumes that you are a large multi-national corporation.
So, to give you an idea: Several reputable firms all quoted us the equivalent of an engineer's salary for a month just to _estimate_ the price of getting our ducks in a row.
For my company this is a LOT of money. We're bootstrapping and are barely ramen profitable.
Also, and I'm sure this happens to everyone at least once, at the time I did not understand that what they were quoting for was to prepare an estimate for what it would cost to answer our questions. I thought this was the quote to answer our questions!
When the estimate itself arrived it was for the equivalent to an engineer's salary for a year, with _no_ guarantee that further complexities (and costs) would not come up during or after the process.
An expensive lesson.
Currently we're trying to navigate the process ourselves by interacting directly with the .za & USA revenue services and the .za Reserve Bank.
Needless to say, this is hell on trying to get any actual work done in the meantime :-)
For South Africans it's more complex: we literally are not (legally) allowed to charge in any currency except ZAR (our local currency). When you're a small bootstrapped startup on the bottom of the world, charging in a relatively unknown currency doesn't sit well with international customers
> The moment you're operating in two countries you are subject to the same legal, tax & accounting rules that multi-national corporations have to conform to.
Was it necessary to set up a company in RSA? Why not just be employees or contractors of the US company you happen you own? That's what I was going to do when I looked into doing this (myself, not via Atlas).
That was also our original idea but it turns out to not be that simple:
1) Whether you are an individual or a company, you still need permission from the South African Reserve bank to "just happen to own" a US company.
2) Whether the offshore company is owned by an individual or another .za company, you are still liable for tax to both the .za government and the offshore country. If you don't want to be double-taxed you need to set up a structure that allows for transfer-pricing and that conforms with the international tax treaties in effect between the two countries.
tl;dr whether you or your company owns the offshore entity makes no difference to your legal & tax obligations. :-P
Solving the incorporation problem is only the first of many problems.
---
Please understand that none of the following is a criticism of Stripe. If we hadn't been accepted to the beta we'd be dead in the water right now and our customers would have been screwed. I also expect the solutions to become easier as more people in more countries face the same problems.
(Btw… one small suggestion for the Stripe Atlas team if anyone there is reading this… how about a forum where Atlas users in the same countries can swap information?)
---
So, the questions you asked are completely legitimate.
Trying to answer them ourselves has cost us an inordinate amount of money on legal & tax advice so far and we're still no closer to answers.
The problem is this:
The moment you're operating in two countries you are subject to the same legal, tax & accounting rules that multi-national corporations have to conform to.
There _are_ existing services that are geared towards tackling the insane levels of complexity involved but the pricing also assumes that you are a large multi-national corporation.
So, to give you an idea: Several reputable firms all quoted us the equivalent of an engineer's salary for a month just to _estimate_ the price of getting our ducks in a row.
For my company this is a LOT of money. We're bootstrapping and are barely ramen profitable.
Also, and I'm sure this happens to everyone at least once, at the time I did not understand that what they were quoting for was to prepare an estimate for what it would cost to answer our questions. I thought this was the quote to answer our questions!
When the estimate itself arrived it was for the equivalent to an engineer's salary for a year, with _no_ guarantee that further complexities (and costs) would not come up during or after the process.
An expensive lesson.
Currently we're trying to navigate the process ourselves by interacting directly with the .za & USA revenue services and the .za Reserve Bank.
Needless to say, this is hell on trying to get any actual work done in the meantime :-)