Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

Costs and requirements for maintaining a foreign owned C Corp?

I am considering forming a C Corp using Stripe Atlas:


https://stripe.com/atlas


but first want to understand the ongoing costs and obligations.


I am an Australian citizen and not a US resident. I need the C Corp to establish and operate some websites targeting the US market; or putting it another way, I need an EIN, sales tax certificate, US credit card processing, and bank account. To begin with, I will be the sole shareholder, and will fill all required corporate roles. At least initially, all work will be conducted outside of the US. We will not have any US-based permanent employees, or own any facilities in the US. We will, however, use US-based services such as banking, credit card processing, web hosting, mail forwarding, legal services, accounting services, etc.


It is my understanding that I will be able to charge the C Corp for all services that I legitimately provide to it, and that so long as those services are performed outside the US, there will be no US-based personal income tax or personal income tax reporting. Is that correct? And if so, how does the IRS determine whether the fees charged are reasonable?


There will be work done on behalf of the C Corp before it has sufficient revenue to pay for the work. Would it be possible to invoice the C Corp for these services at a later date?


It is my understanding that all persons or entities (including myself) who do work for the C Corp which is conducted outside of the US should be required to submit a W-8BEN to the C Corp, together with a signed statement saying that no work will be conducted within the US, and keep filed as supporting documentation in the event of an audit. Is this correct? If we use US based freelancers or contractors, they would be required to submit a W9. Is this correct?


Can completed IRS forms be obtained electronically (eg emailed as a scan or digital photo)?


For other products or services purchased by the C Corp (eg web hosting, mail forwarding, software, hardware, SaaS, hotels, transportation, etc), I believe that we only need a receipt and do not need to complete any additional forms. Is that correct?


I am aware of the following ongoing costs to keep the C Corp legal:


  1. Pay a registered agent in Delaware.

  2. File an annual report with Delaware.

  3. Pay an annual Franchise Tax to the state of Delaware.

  4. Remit any relevant state-based sales tax.

  5. Pay federal income tax on profits (quarterly installments).


Is there something missing from this list?


I understand that it is important for a C Corp to keep reliable financial records, and to document all major decisions (in my case, presumably as consent resolutions). I also understand that the company bylaws will outline obligations for shareholder and board of directors meetings.


I understand that I need to request a BE-13 exemption from the US Department of Commerce:


http://www.bea.gov/surveys/respondent_be13.htm


Are there any other mandatory administrative requirements that I should be aware of?


Finally, can anyone recommend a startup friendly accountant, ideally one that is familiar with foreign owned C Corps? Familiarity with Stripe Atlas would also be a bonus.

9 Replies

Michael Brill
0
0
Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
See if you can get into this:

https://stripe.com/atlas
Adam Thyer
0
0
Adam Thyer Entrepreneur
Founder at EngSocial - Seeking connections who might want to participate in this project.
Michael Brill did you read my post?
Michael Brill
0
0
Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
OMG. I'm a moron. Sorry about that... Here's what I read:

I am considering forming a C corp.
then lots and lots of stuff.

Me: "Ah, that's what Stripe Atlas is supposed to handle."

Soapparently I didn't. Apologies again. I'm going to go back to watching my Wiggles video.


Adam Thyer
0
0
Adam Thyer Entrepreneur
Founder at EngSocial - Seeking connections who might want to participate in this project.
LOL, no problem :)
Kelley Watson
0
0
Kelley Watson Entrepreneur
Bookkeeping Instructor at CCCC
Hi. I am an independent bookkeeper that was contracted by a friend at a German company last year for the same type setup. I handle all of their monthly bookkeeping and quarterly tax payments but a CPA handles their tax returns. That has proved to be very economical for them because CPAs charge so much for bookkeeping services. I am a full time accountant at the local hospital so this is something that I do on the side. Feel free to contact me if you need help with anything or are looking for a US bookkeeper. [removed to protect privacy]
Doug Bend
0
0
Doug Bend Advisor
Legal Counsel For Entrepreneurs @DougBend • Real Estate Broker @BLGProperties • Co-Founder @AgentFound
You should also plan on having to pay a CPA to prepare and file a U.S. tax return each year for your company.

Please e-mail me at Doug@BendLawOffice.com if you'd like a couple of solid CPA options to get a price quote.
Vanessa Kruze, CPA
0
0
Vanessa Kruze, CPA Entrepreneur
Startup CFO Consultant
Hi Adam, please find a more complete list of tax deadlines here:

http://www.kruzeconsulting.com/blog/post/2016-Tax-Compliance-for-San-Francisco-Start-Ups

Also be aware that you may have to adhere to FBAR Compliance:You need to file form FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) by June 30th of every year if....
  1. The person had a financial interest in or signature authority over (or any other authority over) at least one financial account located outside of the United States; and
  2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during a calendar year.
  3. A corporation, foreign or domestic, in which the U.S. person owns (directly or indirectly) more than 50% of the total value or more than 50% of the voting power of all shares of stock;
  4. Filing date is June 30th every year
  5. Penalty for not filing is $10,000+
  6. File it here:http://bsaefiling.fincen.treas.gov/main.html
Also.... I definitely recommend having both an Australian and US CPA to advise on these international issues. When one of our companies has an Australian sub or parent, we usually end up partnering with Peter Pryn at Sothertons Australia to ensure that everything is taken care of.

Hope this helps, and feel free to reach out to me if you're looking for a US startup CPA: www.kruzeconsulting.com




Pete Lopez
1
0
Pete Lopez Entrepreneur
Business Development Manager at TempCFO Solutions Inc.
Hi Adam - happy to have a discussion to see how we can help on the US Startup..... here at tempCFO, Inc. http://tempcfo.comwe have been assisting early stage companies for nearly 20 years.

Pete Lopez
Steven Shamrock
0
0
Steven Shamrock Entrepreneur
CPA | Finance Coach | Passionate Business Growth Specialist | Speaker & Trainer
A foreign or domestic corporation is liable to file a tax return and pay tax to the US treasury if the corporation's activities are "effectively connected" to the United States. There are some indicators regrading residency, agency, and the movement of goods. Also, each state has their own nexus rules and guidelines.
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?