My wild guess is: they might not have had any internet connection at all. But it really depends whether the Koryo Tours guys thought the extra cost would be worth it. I don't have any updated pricelist from Nosotek (the North Korean/Dutch joint venture outsourcing firm which wrote Pyongyang Racer), but back in 2010 they charged an extra €40 to €60 per day surcharge to clients if they wanted their team of two outsourced Pyongyang programmers to have direct internet access; otherwise the team would work "in a cleanroom environment and can not connect to the
internet" and all email contact would be with the Nosotek managers only.
http://www.nkeconwatch.com/nk-uploads/nosotek-pricelist.pdf
To put this in perspective, that charge is almost the same as the charge for one of the programmers themselves. My guess is, Nosotek most likely have to pay for a third guy from the government to watch the browsing habits of the first two, and that third guy has to belong to both the set of political reliables and the set of internet-savvy people --- two sets which are already small in North Korea and whose intersection is even smaller. Not to mention the cost of the extra computer and internet connection itself
Certain US government mailing lists have this same problem. For example, the Federal Register table of contents listserv, which sends out daily mails consisting of links to government notices. Every few weeks, lawyers all over the country — plus us random wonks who also read the Federal Register for fun — get an autoreply from some other law firm telling us who quit or got laid off:
http://listserv.access.gpo.gov/scripts/wa.exe?A2=ind1210C...
I'm only surprised it doesn't happen more often. I guess, given the intended audience, it's not so surprising that it doesn't get abused. But still, it would be incredibly easy to send out a fake email pretending to be the Federal Register. Imagine all the fun you could have issuing your own antidumping notices and arms control regulations.
Quite a number of South Korean companies have set up shop in Kaesong Industrial Park, right over the DMZ in North Korea. There's 100+ factories employing more than 40,000 workers. There's buses going across to South Korea every day, though obviously they get cut off in times of tension. I don't think LG does anything directly at Kaesong, but there's certainly other electronics manufacturing going on there: 13 firms in total produced $59 million of electronics at Kaesong in 2010. Of some relevance to this discussion, Magic Micro has been making lamp assemblies for LCD monitors there since 2006. In short, it's not just canvas sacks and artificial flowers coming out of labour camps.
http://www.fas.org/sgp/crs/row/RL34093.pdf
No doubt, in any supply chain, the highest value-added steps are not occuring in Kaesong. As pointed out by others, labour costs can't explain the difference of hundreds of dollars on these monitors and so samstave's guess is likely wrong (though I don't think he deserves to be downvoted into oblivion). But companies don't decide to locate at Kaesong for cost reasons anyway; rather, they're there for nationalistic reasons about promoting reunification. The factories there apparently don't even break even in the absence of South Korean government subsidies, and the future of those subsidies is uncertain:
http://koreajoongangdaily.joinsmsn.com/news/article/article....
(Another slightly more complex point is that companies manufacturing products at Kaesong likely have to accept lower margins on them --- exporting them runs into sanctions issues in many countries, meaning they have to be sold in the domestic market --- but I doubt that's what's going on here to make these monitors so cheap either).
I am sorry to downvote you but this is bad advice that could cost some lurker quite a bit of penalties. The fact that aethr and so many other people bring up the drastic step of renunciation should have told you right off the bat that this is not a matter of "$50 and 2 hours" learning Turbotax.
The issue is not the tax owed (which as you correctly note tends to come out near zero) but the reporting requirements, which go well beyond those imposed on people who live in the US and keep all their assets there. Turbotax and other consumer software packages do not (and likely never will) support the kinds of complex forms you have to file if you settle outside the US and start leading a normal financial life like any other resident of your adopted homeland: Form 8621 if you'd like to buy ETFs on your local stock exchange, Form 3520 if you're obligated to participate in a local retirement plan --- and most relevantly to Hacker News, Form 5471/8858 (and maybe a 926 and 8832 as well) if you'd like to start your own company where you live. Estimated time for completion for Form 5471 for example is 44 hours (plus a recordkeeping burden of 130 hours, primarily due to the part where you have to redo all your company's accounts in US GAAP), and it has a failure-to-file fine of tens of thousands of dollars per accounting period.
All of these forms (except Form 8938 & FBAR) must be filed regardless of the tax owed or the value of the asset in question. These forms (and their associated failure-to-file penalties) were designed with extremely rich onshore people in mind --- because Congress didn't think anyone besides a multi-millionaire tax-evader would use a "Controlled Foreign Corporation", "Passive Foreign Investment Company", or "Foreign Non-Grantor Trust". But as it turns out, the way the rules are written, literally every American who lives abroad for more than a few years ends up in a similar boat as American homelanders with more than 100x their income/assets, and has to pay accordingly for tax advice --- not advice on how to reduce their taxes (since once taxes in the country of residence are taken into account, there is already no tax owed), but advice on how to properly report to the IRS.
Singapore is an expensive place to live, housing wise (though I hear food is super cheap and super plentiful with a massive "Street food"/mall-food-court culture).... though I imagine HK real estate isn't cheap either.
Housing is expensive, yes, but you can live cheaply in HK if you're willing to adjust your standards downwards: you can get a tiny flat in a low-rent area without worrying about violent crime, you can eat at cheap diners or buy groceries at cheap wet markets without worrying about food-borne diseases, etc, owning a car is logistically & socially unnecessary, etc. Not everyone needs these guarantees but it helps if you're the kind of person who worries a lot =)
What is the visa situation like in Hong Kong? I've read elsewhere that getting a visa for China is very difficult (this might be an area where HH is different from CN). Are you able to get reasonably long visas so that you can stay there indefinitely, or will you have to relocate again in 6 months or a year?
HK Immigration Department is totally separate from mainland China. Different laws, different visa types, different procedures. It's not that hard to get a real visa here. ImmD is strict about their requirements but they are not mysterious, arbitrary, or painfully slow like USCIS. There is a self-sponsored employment visa (called "investment visa", but it doesn't require big capital investment, just a business plan). It does have to demonstrate some sort of benefit to locals, but that can be in terms of using local suppliers for goods and services, rather than hiring lots of local workers. There's also the QMAS visa, a sort of points-based skilled migration visa that gives you more flexibility.
Trying to work for your own company while on a tourist visa is a gamble. For 90 days you'll be okay. Longer term, some people have josscrowcroft's experience and go on visa runs for years without trouble. If you're low profile and don't compete with local companies the Immigration Dept. may ignore you. But others end up like this Aussie who came to HK to give a risk management seminar and got two months in prison followed by deportation for working illegally: http://news.sina.com.hk/news/2/1/1/2352180/1.html
If you decide to stay really longer term, the system is generally quite fair (at least to skilled workers and students; if you're a maid or construction worker it's a whole other kettle of fish): permanent residence takes seven years, but your "clock" doesn't reset if you change employers (e.g. if you get acquired and become an employee sponsored by your acquirer), and there's no ridiculous quota on how many PRs are approved each year. And once you have PR it's actually permanent: you can vote, you cannot be deported and there's no bullshit about "losing status" for filing a tax return as a non-resident or going back to your home country for a couple of years.
I've made a rough translation of the license. As mentioned it's in Japanese. It's also kind of confusing. I'll send a pull request when I'm back at my desktop. (EDIT: Though of course, redistribution seems to break the condition at line #6).
1 Orto SDK is Free Software.
2 Copyright Kobayashi Yuu
3
4 Use and publication of applications produced by using Orto SDK
5 are free for both commercial and non-commercial purposes.
6 For other uses of Orto SDK, or for redistribution of the Orto SDK,
7 please contact [email protected] beforehand.
8
9 Due to lack of contract with Sun Microsystems,
10 Orto is Java-style but it is not Java. Orto is an independent language.
11 Java is a registered trademark of Sun Microsystems
12
13 The author is not responsible for any damages which may occur through use of Orto SDK
14 Furthermore, reverse engineering of Ordo SDK is prohibited.
Later on I'll have a read and translate any interesting parts of it. Right now it's 4 AM here, I'm coming off a long and not-very-fun debugging session, and I'm going to sleep.
I blogged about that report and translated some portions of it at the time, see there for my thoughts on these things. my analysis in short: not many people taking concrete action, not many people leaving permanently. http://notlearningcantonese.posterous.com/rich-emigrants-as-...
I particularly liked this quote: "[I]t's reasonable to expect to find a large number of retained legal representatives under a legal system in which people feel that their property rights are constantly threatened by rent-seeking litigiousness or in which rampant rent-seeking opportunity gives them an incentive to behave litigiously themselves. The rarity of retained champions in medieval England therefore suggests that rent seeking under trial by battle wasn't rampant."
Congratulations on the move! Asia is a great place to be. And a great environment for doing business. I'm in Hong Kong --- in several cities around the region including here, SG, KL, and Jakarta I see lots of latent entrepreneurial energy starting to manifest itself.
One warning: since it seems you plan to majority-own some local startups I hope you have an excellent accountant to help you with Uncle Sam. (yep, Americans living overseas still have to file with the IRS. whole mess of complicated forms. can even end up having to pay tax on undistributed corporate profits if you're not careful ...)
Couple of articles which may be interesting reading (in Chinese) --- touching on China-specific privacy, legal/data licensing issues, etc. surrounding these maps:
The "General tax on payments abroad" applies to services, rather than dividends. Also, technical or professional services rendered abroad --- presumably, most of what a startup would be paying its suppliers for --- get withholding tax at 15% rather than 35%. (I am no accountant or tax lawyer, but to me it looks like the main point of the 35% tax is some sort of anti-transfer-pricing-abuse measure --- to penalise attempts at tax evasion by local companies who pay their affiliates in tax havens for fictitious and ill-defined "services" and then try to claim that these service payments are part of their cost of doing business and should be deducted from profits for their Chilean tax bill.) For the dividing line of what is a technical service or not, look up "Servicios prestados en el extranjero" on the website of the Chilean taxation authority: http://www.sii.cl
Even better, these tax rates on both services and on dividends may be further reduced by bilateral treaties. Chile has tax treaties with many OECD members and South American countries. See http://www.sii.cl/pagina/jurisprudencia/convenios.htm
US citizens/permanent residents should note a few things. Like trevalyan says, don't let it discourage you --- but be aware of the issues that could come up. If you participate in the program, you will become an owner of a "Controlled Foreign Company". You have to file a Form 5471 every year with the IRS and an FBAR declaration (TD F 90-22.1) with the US Treasury Department for any bank accounts owned by you or your Chilean company. 5471 in particular is a pain in the ass. Also if you go back to the US afterwards and continue running your Chilean company, it can get very complicated --- look up "Subpart F" (Internal Revenue Code sections 951-965), in particular "foreign base company services income" --- start at http://www.law.cornell.edu/uscode/26/usc_sup_01_26_10_A_20_1...
Another (less pressing) problem is that Chile has signed a tax treaty with the US, but it is not yet ratified by either side's legislature. Until the treaty has been ratified and the IRS determines that it meets their requirements, dividends that a US citizen receives from a Chilean company are NOT qualified dividends. They will be taxed at your ordinary US income tax rate and not the reduced rate of 15%. But I'd imagine by the time you are profitable enough to think of paying dividends, the treaty will be settled and this will no longer be a problem (though of course, the provisions for qualified dividends may have sunsetted by that time!)
The issue the NYT is complaining about is: the US prefers to use "place of incorporation" instead of "place of effective management" in deciding where a company should be taxed. Of course this should hardly be a surprise, when Delaware alone is "home" to tens of thousands of companies owned by non-resident aliens.
For those who are curious or suffering from insomnia, here's the actual laws that make Carnival mostly tax-exempt:
Internal Revenue Code Sec. 883:
(a) The following items shall not be included in gross income of a foreign corporation, and shall be exempt from taxation under this subtitle: (1) Ships operated by certain foreign corporations: Gross income derived by a corporation organized in a foreign country from the international operation of a ship or ships if such foreign country grants an equivalent exemption to corporations organized in the United States.http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_0...
"Foreign corporation" is defined in Sec. 7701:
(4) Domestic: The term “domestic” when applied to a corporation or partnership means created or organized in the United States or under the law of the United States or of any State unless, in the case of a partnership, the Secretary provides otherwise by regulations. (5) Foreign: The term “foreign” when applied to a corporation or partnership means a corporation or partnership which is not domestic.http://www.law.cornell.edu/uscode/26/usc_sec_26_00007701----...
In some countries, the laws and treaties care about the "place of effective management" of a corporation in deciding where it is to be taxed. That would catch out Carnival. For example, the OECD model tax convention says: Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is locatedhttp://browse.oecdbookshop.org/oecd/pdfs/browseit/2310081E.P...
However, the US uses the following in most of its treaties instead: Profits of an enterprise of a Contracting State from the operation in international traffic of ships or aircraft shall be taxable only in that State. And, there is no double-taxation treaty between the US and Panama in the first place, only a tax information exchange agreement.
DISCLAIMER: I am not a lawyer and I'm assuming you live in the US, UK, Latin America, Africa, or some other countries which LACK a bilateral agreement with HK on enforcement of court judgments. Australia, Israel, Germany, & others HAVE such agreements with HK which invalidate the rest of what I'm saying. Look up Foreign Judgments (Reciprocal Enforcement) Ordinance. If you want more free advice, I'd suggest asking the guys at http://geoexpat.com instead, there's lots of HK lawyers there.
"Non-exclusive jurisdiction" clauses are put in because of problems with enforcement of foreign court judgments. If you sue someone in your country and win, but he has no assets in your country, you have to go to his country and convince a court there to enforce your country's judgment if you want to get your hands on any of his money.
Contract law differs a lot between countries, but any judge anywhere whom you ask to recognise a foreign court judgment wants to know at least three things: #1: the court which issued the original judgment actually has jurisdiction. #2: there's no more avenues of appeal above that court. #3: you informed the other guy before you sued him. If you can prove any one of those three is untrue, then you derail the enforcement of the foreign judgment. The "non-exclusive jurisdiction" clause makes it impossible to argue about #1.
Signing a contract for "non-exclusive jurisdiction" in HK doesn't restrict you or HKCorp trying to sue each other anywhere in the world you can convince a judge to listen. But it does mean that if HKCorp sues you in HK, wins, and then comes to your country to collect, you can't argue that the HK court was not a proper venue. While if you sue HKCorp in your country, win, and go to HK to try to get the judgment recognised, the HK judge will want to know why you didn't just sue in HK.
The article's dismissal of an editor by complaining that "[his] edits were all deleting things and moving things around" is a perfect illustration of why "bytes added" is just as bad a contribution metric as "edit count". We're not in 2001 anymore. The Internet is not short of bytes about Alan Alda or Anacondas, and nor is Wikipedia short of people who add bytes about them.
Newly-added bytes may be true or false. They may be useful or not useful even if true --- readers do not want every byte about a given topic, they want a few tens of thousands of the most useful ones. (This is entirely orthogonal to the inclusionist-deletionist debate about what topics should be included. Some bytes may be useless in the context of a main topical article about Alan Alda himself, but they would be very relevant to a subtopical article about Alan Alda's dental health).
For a popular topic, you'll have dozens of people adding bytes of varying quality. Insiders subtract the false or useless bytes (an action easily captured in statistics and then maligned on the internet by pundits), but also look at the true and useful bytes, fact-check them, and then leave them in place. This contribution --- curation --- is not captured in any statistics, but it is an important part of the mechanism by which you can have 1 expert and two enthusiastic amateurs stop by every few weeks on their lunch break to expand an article with no centralised notice or approval, without having have the place turned into a mess by the 97 vandals and well-meaning incompetents who came by in the meantime.
The real problem Wikipedia faces is in the long tail of topics, where there is only one person adding the bytes, and that person is either grinding an axe, self-promoting, or afflicted with incurable "nerdview". The well-meaning, harried, underinformed Wikipedia insiders inevitably screw up when they try to distinguish useless vs. useful bytes on these topics, but I wouldn't call the outsiders who added the bytes in the first place "experts". Unfortunately both sides' conduct may be scaring away the people who are actual experts on those long-tail topics ...
Take someone like patio11, who's running a profitable business but not making a killing with it yet. Why not let him immigrate to the US, and run his business (and pay his taxes) there?
In fact any person anywhere in the world whether American or not can volunteer to pay taxes to the US government even if he doesn't have a single US-based customer. All you have to do is incorporate in the US with an American nominee director+secretary and yourself as the sole shareholder. Then it's up to you whether you want to tell your local government about all the profits your American business is raking in.
Delaware in particular makes it hard for foreign governments to find out exactly who owns a particular corporation there. This is why you sometimes hear America referred to as the world's largest tax haven:
http://www.lectlaw.com/filesh/bbg33.htm
However, for an American citizen living overseas and trying to run a small business, the main reason to incorporate in the US (rather than whatever country you're living in) is not to evade foreign taxes, but to avoid American paperwork. American owners of foreign corporations have to file form 5471 and spend all their time worrying whether any of their income can be classified under Subpart F (particularly Foreign Base Company Services Income --- look it up if you'd like your head to explode), in which case it DOES get taxed in the US as if it were a dividend to you personally. If you're Google and you want to pretend that your office in Bermuda with zero programmers and three lawyers is actually a major profit centre for software income, this is easy. If you're one guy selling bingo software, this is much harder, because you don't have the money to hire an international tax lawyer. Thanks President Kennedy!
Right now all the multinational corporations are deferring US taxes on their foreign subsidiaries by using Form 8832 declarations to create "hybrid entities" (ones which different governments disagree are corporations or pass-through entities). This all started back in 1997, when the IRS amended the entity classification rules in response to perceived abuses. Next year that law might get amended to make that impossible (Obama already tried last year, but failed), at which point all the high-priced accountants and lawyers will comb through the new regulation to find some other bright idea, while I hide under my pillow and cry.
Anyway, rant over, here comes the point I promised: US laws, whether in the field of immigration or taxation or whatever, may start out simple, but they inevitably get amended into increasing complexity until they make no sense at all, because unlike, say, the laws of Vanuatu, there's so many people looking for loopholes. Thus the laws manage to ensure that no one abuses process X, by making it damn near impossible for anyone, abusive or not, to get through process X in the first place. So I don't really have high hopes for this startup visa bill. It may pass, and in the first year hopefully some genuine foreign entrepreneurs will grab on to the chance to get a foothold in the US. But then there will be abuses, or maybe only perceived abuses blown out of all proportion by the media (or by disgruntled competitors who use PR agents to plant stories in the media), and then the law will get amended into oblivion starting from year two.
The second most functional country in SE Asia is Thailand
Malaysia is a lot more functional than Thailand on most measures (GDP per capita, number of coups per decade, corruption perception index, etc.)
In the foreign press they get quite a bad rap ... not only do they hang Aussie drug smugglers like Singapore, but they also have racial discrimination laws, religious police who raid bars and hotels, ex-PMs who spout off about "the Jews", etc. And on the ground, they definitely have worse public safety, more drugs, and more cops asking for "tea money" than Singapore (fewer than Thailand, though).
On the other hand there's less alcohol, bigger houses, and cheaper schools, which means a lot of expats perceive it as more family-friendly than Singapore despite the obvious drawbacks. And in reality, KL still has good nightlife despite the occasional tussle with the Islamic Affairs officers (who don't have any authority over non-Muslims anyway).
The Malaysian legal system isn't great, but it's common law, and it's good enough that all the fund managers are happy to use Labuan as a tax haven and a conduit for investing ... into South Korea, who haven't been very successful in pressuring the Malaysians to take Labuan out of the double-taxation agreement. (This is for example how Newbridge Capital managed to avoid paying capital gains tax on Korea First Bank back in 1998). I can't imagine any fund manager or rich tax evader being happy to park his money in a bank in Bangkok even if their taxes were lower.
On the bright side, and directly on topic for Hacker News: both Malaysia and Singapore beat the pants off of any other place in Asia (including Hong Kong) for the level of support they're giving to startups. The talent pool is better in Singapore (simply cuz so many Malaysian grads end up there and don't want to come back), but the real estate costs are a much bigger barrier. See e.g.
Many of these arguments strike me as particularly weak, none more so than slide 36, where he claims that China's urbanisation rate is being understated because they have a much higher population density threshold for what qualifies as a "city". He seems unaware that average farm size in China is absolutely tiny compared to America --- I've seen figures as low as 0.04 hectares (400 m2!) for Guangdong [1], which is how the province as a whole manages to achieve an Israeli-level population density of 486 persons/km2. For the whole of China, something like 0.2 hectares seems more reasonable.
But even then, if you take the definition he suggests for a "city" (400 persons/km2), every single farming village in China would qualify. That's why China has a much higher population density threshold for defining urban counties.
https://news.ycombinator.com/user?id=camz
> I didn't realise Forbes let you blog under their brand now
In fact that's been their exact business model for a while. Good March 2012 article on that:
http://www.poynter.org/latest-news/top-stories/173743/what-t...