I am based in Ireland and receive payment through PayPal. I'm paid for 1:1 interview prep sessions.
That money gets taxed as income here, so I end up paying about 40% in taxes.
The cost of running a limited company in Ireland is quite high, somewhere around €1500. On top of that I'd have to pay corporate taxes, which although low are still not negligible.
Due to the high cost, I've been considering incorporating in the US. I've seen that places like firstbase.io lets you incorporate in Wyoming and their cost seems reasonable.
Anyone with experience in this?
Fantastic question Lucas. I'm Arjun, CEO at StartPack (https://startpack.io) and happy to answer this for you.
I’ll start by saying: One common misconception about creating US companies is you don’t have to be a US citizen to create one!
That means you can start a US LLC as a non-resident, online, as a foreigner and get
What is an LLC?
The LLC gives you a business entity to then set up a bank account, take payments, and as the name "limited liability company" might imply, it protects you from "liability!"
"With an LLC, only the assets owned in the name of the LLC are subject to the claims of business creditors, including lawsuits against the business. The personal assets of the LLC members cannot be claimed to satisfy business debts. For most people, this is the most important reason to form an LLC."
How do I set up an LLC?
Overall it cost a few 100 bucks to create an LLC (depends on state for exact costs) and here is a high-level overview of the process.
File your LLC online. You can do this directly through the state as well (google to find their link!) Each state has different filing feels but these also range from $50 to $150 I've seen. It takes several days usually for the state to get back to you. The state will send you your formation documents which will include your operating agreement as well.
Hope this is helpful :)
And if you're looking for a "one-stop-shop" solution that helps you set up and manage all of the above in a few clicks you should check out StartPack (https://startpack.io)
StartPack the Ultimate One-Stop-Shop to turn your dream idea into a US LLC Business, from anywhere in the world.
StartPack handles the paperwork and gets you everything you need to launch, maintain and grow your dream business.
At the end of the day our job is to handle everything for you on the operational side so you can focus on growing your company 🚀 And we deliver on this https://www.startpack.io/wall-of-love ❤️
Yes, I incorporated two days ago with them. It took around 5 business days to get the incorporation certificate. Now I wait for my EIN number and bank account. Everything goes smooth so far. They warned me that getting the EIN number can take some time due to IRS + Covid19, though. Their customer support is excellent.
Hey, sounds like you got your EIN already but if you didn't / know someone who is waiting check out this link here for real-time EIN updates from the IRS! https://www.startpack.io/how-long-will-it-take-to-get-an-ein
Oh nice! And did they give you an estimate of how much it will cost you to run the company every year?
I saw they list something like 399 USD on their website but I'm not completely sure that value covers everything you'll need.
Yes, you can talk to the customer support about that before incorporating. For a Wyoming LLC - disregarded entity, there are no taxes. You'll pay your personal income taxes in your country.
The only duty toward the State of Wyoming is an annual report fee, which costs $50. You also need a registered agent. With FirstBase the first year is for free, then it is $5 per document (and there are not a lot of documents). I will take care of the accounting myself (not obligatory to have an accountant).
For my consulting business, I do not expect costs of more than $100 per year.
Can I ask in which EU country you are based and if you got access to a Stripe US account through Firstbase.io?
I am based in Macedonia, which is in Europe, but is not an EU country.
I've got access to a Mercury bank account through Firstbase.io, which can be connected with Stripe.
I see. Thank you. If you don't use Stripe, do you use a different payment processor? I'm asking because I also want to form my company through firstbase.io and I heard it can be difficult to get access to Stripe if you're not a US citizen and don't use Stripe Atlas or Firstbase. If I'm blocked from processing payments with Stripe it will be difficult to find alternatives.
You can use Paypal and Transferwise. I haven't heard about any issues with Stripe, though.
Hmm interesting. Do you know if they offer an accounting service?
Doing mine on https://www.waveapps.com/accounting
I do it myself. It is for free.
Firstbase does not do accounting, but in the rewards you can get discounts for accounting services.