Launch HN: StartPack (YC S20) - Helping Global SMBs Access US Banking & Payments
36 comments
I setup a stripe atlas account long time back and they gave me a Delaware inc for $500.
It was an impulse decision and i Haven't had much user for it except a few recurring subscriptions that are enough to pay for $25/mo that svb charges + $500 Delaware annual franchise charges + $300 that greenback charges annually.
Let's say if instead of doing that i used your services, are there any cost saving? Just asking since you guys are already here.
P.s. I'm a solo founder with no employee in US and at the time I setup the account the only option was inc.
It was an impulse decision and i Haven't had much user for it except a few recurring subscriptions that are enough to pay for $25/mo that svb charges + $500 Delaware annual franchise charges + $300 that greenback charges annually.
Let's say if instead of doing that i used your services, are there any cost saving? Just asking since you guys are already here.
P.s. I'm a solo founder with no employee in US and at the time I setup the account the only option was inc.
Hey! Before I can ask this, question for you, are you raising venture capital now or plan to in the future? If so then a C Corp is the right decision!
Re taxes, first a disclosure: I am not a tax professional and this is purely information advice
Depending on your business and whether or not you have effectively connected income to the US + a physical presence in the US, there might be a situation where an LLC would have tax savings. However, I cant answer this professionally / I'd need more info from you to even give you a high level answer on my side. However, if you DM me on Twitter (@arjmahadevan) I'm happy to see if I can connect you with a resource or CPA who might be able to help you here!
Re taxes, first a disclosure: I am not a tax professional and this is purely information advice
Depending on your business and whether or not you have effectively connected income to the US + a physical presence in the US, there might be a situation where an LLC would have tax savings. However, I cant answer this professionally / I'd need more info from you to even give you a high level answer on my side. However, if you DM me on Twitter (@arjmahadevan) I'm happy to see if I can connect you with a resource or CPA who might be able to help you here!
What bank options/introductions are available?
Are you providing introductions to first tier banks via connections (Chase, BoFA, etc) or is it simply to something such as Mercury?
Are you providing introductions to first tier banks via connections (Chase, BoFA, etc) or is it simply to something such as Mercury?
Hey Jake!
First off, we provide folks with everything they need to apply for a business bank account in the first place: LLC, EIN. We also offer a US address + US phone number if that is something people want us to help them with too!
From there our philosophy is we do not force customers to use any particular banking option. With the above, you technically can open a bank account at any bank.
However, only certain banks allow non-US residents without a US SSN to 1) apply and 2) apply without visiting the US. Mercury is one example of this (well the only example I know of as of now :) ).
We are more than happy to provide links and requirements of other banks which we do for customers but when people (especially non-US residents) find out they have to fly to the US to open an account then that bank isn't really an option.
If you're curious to see an overview of how to apply for a US Business Bank account, check out this thread: https://twitter.com/arjmahadevan/status/1349771706865504260
We also wrote this blog post which goes through several banking options and highlights whether or not you can apply with a US SSN, remotely etc here: https://www.startpack.io/blog/how-to-open-a-us-business-bank...
First off, we provide folks with everything they need to apply for a business bank account in the first place: LLC, EIN. We also offer a US address + US phone number if that is something people want us to help them with too!
From there our philosophy is we do not force customers to use any particular banking option. With the above, you technically can open a bank account at any bank.
However, only certain banks allow non-US residents without a US SSN to 1) apply and 2) apply without visiting the US. Mercury is one example of this (well the only example I know of as of now :) ).
We are more than happy to provide links and requirements of other banks which we do for customers but when people (especially non-US residents) find out they have to fly to the US to open an account then that bank isn't really an option.
If you're curious to see an overview of how to apply for a US Business Bank account, check out this thread: https://twitter.com/arjmahadevan/status/1349771706865504260
We also wrote this blog post which goes through several banking options and highlights whether or not you can apply with a US SSN, remotely etc here: https://www.startpack.io/blog/how-to-open-a-us-business-bank...
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is there something like this for other countries say singapore? US corp only makes sense if majority of customers are US based.
Hey! We support residents of Singapore!
And a US C Corp is a great option if you are looking to raise venture capital (there can be other reasons too in specific cases but at a high level if you are raising venture capital or will in the future, then a C Corp is the best option)
And a US C Corp is a great option if you are looking to raise venture capital (there can be other reasons too in specific cases but at a high level if you are raising venture capital or will in the future, then a C Corp is the best option)
I love this because I need, like, two LLCs per year for random, probably short lived, things.
Hey! thanks so much, I'm super curious (if you're able to share publicly) what you form your LLC for?
Mostly just random projects with my brother. Most of them go nowhere but it's a clean way to kick things off that involve money.
Why is Wyoming the default, out of curiosity?
Why is Wyoming the default, out of curiosity?
Ah got it!
And Wyoming and Delaware are actually the two most popular options for non-US residents :)
If you are a US resident what we've learned is forming an LLC in the state you live in / "do business in" is the best option. If anyone is curious about how to choose the "best state" to form your LLC in or more on "Wyoming vs Delaware" check out this post we wrote which dives in to this! https://www.startpack.io/blog/what-is-the-best-state-to-form...
And Wyoming and Delaware are actually the two most popular options for non-US residents :)
If you are a US resident what we've learned is forming an LLC in the state you live in / "do business in" is the best option. If anyone is curious about how to choose the "best state" to form your LLC in or more on "Wyoming vs Delaware" check out this post we wrote which dives in to this! https://www.startpack.io/blog/what-is-the-best-state-to-form...
Hi Arjawn. Congrats on the new business, its a well needed area. Do you have any thoughts on StartPack vs Firstbase.io and Stripe Atlas?
Hey! thanks so much! Here's how we think about StartPack in terms of existing options out there today:
- We actually only support LLCs. Certain options out there actually don't support LLCs for non-US residents.
- We're different than "one-time formation offerings" because we fundamentally believe 1) the incentives are not aligned for one-time offerings. We've heard directly from the creators and online SMBs who choose use that they don't want a checklist of things to do after forming a company, they want someone (StartPack :) ) who can handle the ongoing work for them 2) we handle all the annoying administrative work creators and online SMBs don't want to deal with + we help them set up and manage software/accounts they need as well to launch, maintain and grow their business.
At the end of the day, our goal is to help entrepreneurs not have to deal with anything else other than focusing on what they do best: growing their business
At the end of the day, our goal is to help entrepreneurs not have to deal with anything else other than focusing on what they do best: growing their business
Do you support US citizen founders who intend to be expats and no longer reside in the US?
Hi! We do support US and non-US residents and US + non-US citizens!
One thing to add here: certain banks do have restrictions around what country one is a resident in regarding whether or not they are able to open an account for you. For example, you can check out the list of supported countries for Mercury here! https://mercury.com/faq
Congratulations on the launch! Greetings to JP!
Thanks so much man! Greetings back :)
Thank you so much!!!
Hi Arjun, congrats on your launch!
I'm a non-US who knows a bit about going through the US incorporation.
I've never considered an LLC because of the pass-through taxation which is pretty much impossible when you're outside of the US.
Stripe Atlas used to support LLC for non-US but they stopped it because they found that people recklessly open it but cannot run when they are non-US residents.
So, how does your product help those non-US resident with an LLC?
I'm a non-US who knows a bit about going through the US incorporation.
I've never considered an LLC because of the pass-through taxation which is pretty much impossible when you're outside of the US.
Stripe Atlas used to support LLC for non-US but they stopped it because they found that people recklessly open it but cannot run when they are non-US residents.
So, how does your product help those non-US resident with an LLC?
Hi Artem, thank you so much!
Disclosure: I am not a tax or legal professional and this is purely informational advice
We get asked about taxes all the time (from US and non-US residents) so we partner with and work with tax and legal professionals who can not only answer questions for people and provide professional advice but they can also help people with any tax related work that people want help with. Note: you are not required to pay or work with a tax professional for tax related filings or requirements but often times it can be easier and save time to do so.
Now regarding "taxes for non-US residents" here is an informational tl;dr: - If you are a 25% Foreign-Owned (or more) U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business you have an "informational filing requirement." Note this isn't a "tax filing" requirement but it is still a filing that is required annually: https://www.irs.gov/forms-pubs/about-form-5472 - If you have "effectively connected income" with the US, then you have a US "tax" obligation and this filing is required: https://www.irs.gov/forms-pubs/about-form-1040-nr
If there are many questions on this I'd actually be happy to put together an FAQ doc or a webinar with a CPA / Tax Professional!
Disclosure: I am not a tax or legal professional and this is purely informational advice
We get asked about taxes all the time (from US and non-US residents) so we partner with and work with tax and legal professionals who can not only answer questions for people and provide professional advice but they can also help people with any tax related work that people want help with. Note: you are not required to pay or work with a tax professional for tax related filings or requirements but often times it can be easier and save time to do so.
Now regarding "taxes for non-US residents" here is an informational tl;dr: - If you are a 25% Foreign-Owned (or more) U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business you have an "informational filing requirement." Note this isn't a "tax filing" requirement but it is still a filing that is required annually: https://www.irs.gov/forms-pubs/about-form-5472 - If you have "effectively connected income" with the US, then you have a US "tax" obligation and this filing is required: https://www.irs.gov/forms-pubs/about-form-1040-nr
If there are many questions on this I'd actually be happy to put together an FAQ doc or a webinar with a CPA / Tax Professional!
Cool, but we can already access US payments from a lot of countries already with Stripe (not talking about Atlas here), no ?
We're different than Atlas and people prefer us over them (and others) because we're much more than just incorporating, and leaving you out there alone navigating all the challenges. We support founders along the way.
Once, one of our customers said "most services out there throw you to the wolves after you paid". You get the point.
Once, one of our customers said "most services out there throw you to the wolves after you paid". You get the point.
I am not talking about Atlas. If we incorporate somewhere else than the USA we can still use Stripe payments, hence get paid from the USA out of the USA
Hey Arjun here! Ah I understand your question. Yes there are ways to accept payments (with Stripe or even other payment processors from certain countries!)
But we've found that founders in countries that even have access to Stripe or payments are still interested in getting access to US banking and Stripe because they are global, digital first companies and having a base in the US helps when selling globally! Also having a US LLC company gives you access to the US startup ecosystem.
Let me know if this makes sense / if I can help clarify anything!
But we've found that founders in countries that even have access to Stripe or payments are still interested in getting access to US banking and Stripe because they are global, digital first companies and having a base in the US helps when selling globally! Also having a US LLC company gives you access to the US startup ecosystem.
Let me know if this makes sense / if I can help clarify anything!
Thanks for the answer ! I still don't understand what benefits there is in going to the USA. I have startups / companies so I could theoretically be interested in this, but I don't get it
> We ended up setting up our C Corp and it cost us money (thousands total)
Using your Pricing page, it'll cost $4.141 to kickstart an LLC for a non-US resident. The biggest costs being "Form 5472/1120 Tax Filing", getting an "ITIN/EIN" and bookkeeping. That being said, if you assume doing the "whole shebang", then I think you got something here. Most of the services you happen to find just want to incorporate and get you out of the door. Incorporating is easy (and relatively cheap) but everything else is expensive and risky.
Another question: Why no Delaware C Corp option? I understand that you are targeting SMB, but for non-residents I think the C Corp makes more sense).
Using your Pricing page, it'll cost $4.141 to kickstart an LLC for a non-US resident. The biggest costs being "Form 5472/1120 Tax Filing", getting an "ITIN/EIN" and bookkeeping. That being said, if you assume doing the "whole shebang", then I think you got something here. Most of the services you happen to find just want to incorporate and get you out of the door. Incorporating is easy (and relatively cheap) but everything else is expensive and risky.
Another question: Why no Delaware C Corp option? I understand that you are targeting SMB, but for non-residents I think the C Corp makes more sense).
Hi!
Re incorporation alone: I 100% agree with you, incorporating alone is relatively easy! Sure it might be a bit of a headache to do the paper work but its but it's the ongoing compliance/filings that can be the true headache. We hope to offer everything that an SMB needs in-house through StartPack so that it's hassle free to have a solution right away. But even if we can't provide the solution, we'll partner / find someone who can help! For example, we get asked all the time about "trademarks" which is something we can't do but we then go out and do research on who can so we can help people find a solution for this!
Re Delaware C Corps: If we don't believe we can offer the best long-term value then again, although we could help people "form C Corps" easily, we wouldn't be the best long-term partner. For example, someone forming a C Corp might be doing so to raise US venture capital! And if this is the case, at some point in the future (or right away) they will likely need legal counsel to help them finalize their round, update fundraising documents, review legal templates etc! Examples of some of these documents might be board consents, SAFE templates, offer letters, advisor or consulting agreements, restricted stock issuances, NDAs and more. And examples of maintenance that might need to be done could be adding or removing directors, making changes to your number of authorized shares etc.
If you are forming a Delaware C Corp some options are Clerky, Gust Launch, Stripe Atlas and of course, if you are going to need US legal counsel, then your legal counsel can also help you form your C Corp too!
Re incorporation alone: I 100% agree with you, incorporating alone is relatively easy! Sure it might be a bit of a headache to do the paper work but its but it's the ongoing compliance/filings that can be the true headache. We hope to offer everything that an SMB needs in-house through StartPack so that it's hassle free to have a solution right away. But even if we can't provide the solution, we'll partner / find someone who can help! For example, we get asked all the time about "trademarks" which is something we can't do but we then go out and do research on who can so we can help people find a solution for this!
Re Delaware C Corps: If we don't believe we can offer the best long-term value then again, although we could help people "form C Corps" easily, we wouldn't be the best long-term partner. For example, someone forming a C Corp might be doing so to raise US venture capital! And if this is the case, at some point in the future (or right away) they will likely need legal counsel to help them finalize their round, update fundraising documents, review legal templates etc! Examples of some of these documents might be board consents, SAFE templates, offer letters, advisor or consulting agreements, restricted stock issuances, NDAs and more. And examples of maintenance that might need to be done could be adding or removing directors, making changes to your number of authorized shares etc.
If you are forming a Delaware C Corp some options are Clerky, Gust Launch, Stripe Atlas and of course, if you are going to need US legal counsel, then your legal counsel can also help you form your C Corp too!
What’s the difference between you and firstbase?
Hey! Touched on how we view StartPack in terms of existing options out there today in another comment below but can re-paste below :)
Here's how we think about StartPack in terms of existing options out there today: - We actually only support LLCs. Certain options out there actually don't support LLCs for non-US residents. - We're different than "one-time formation offerings" because we fundamentally believe 1) the incentives are not aligned for one-time offerings. We've heard directly from the creators and online SMBs who choose use that they don't want a checklist of things to do after forming a company, they want someone (StartPack :) ) who can handle the ongoing work for them 2) we handle all the annoying administrative work creators and online SMBs don't want to deal with + we help them set up and manage software/accounts they need as well to launch, maintain and grow their business. At the end of the day, our goal is to help entrepreneurs not have to deal with anything else other than focusing on what they do best: growing their business
Here's how we think about StartPack in terms of existing options out there today: - We actually only support LLCs. Certain options out there actually don't support LLCs for non-US residents. - We're different than "one-time formation offerings" because we fundamentally believe 1) the incentives are not aligned for one-time offerings. We've heard directly from the creators and online SMBs who choose use that they don't want a checklist of things to do after forming a company, they want someone (StartPack :) ) who can handle the ongoing work for them 2) we handle all the annoying administrative work creators and online SMBs don't want to deal with + we help them set up and manage software/accounts they need as well to launch, maintain and grow their business. At the end of the day, our goal is to help entrepreneurs not have to deal with anything else other than focusing on what they do best: growing their business
When my co-founder JP and I started our US company, it was too complex and time-consuming, especially as a non-US team. We were looking to create a Delaware C Corp but as JP was a non-US resident we did not know how to properly form our company, and make sure we were fully compliant with US tax laws. We ended up setting up our C Corp and it cost us money (thousands total) and time: even after "forming" we were bogged down in paperwork regarding compliance for our company, ensuring we had submitted forms to the IRS correctly (83-b elections) and we felt in the dark around maintaining our company + having support around what to do. Sure "forming the entity" was fast but after that, we really had no clue what to do / what was in store.
As we went through a pivot from our first company, we were going through the process of setting up yet another company and realized we wanted an "initializer" that would start our company for us, but not just stop there. We wanted someone (or something) to help us maintain our company, and provide long-term support in case we had any questions or needed help. This got us thinking: why can't a startup / product deal with this so we can focus on building our business, instead of forming it and maintaining it?
For any entrepreneur, just "starting" a company isn't the goal. Growing a business is. This is hard enough... then there's everything else founders have to deal with and spend valuable time on. We've learned (and personally know from our experience) that founders don't want a checklist of things to do. They want someone who can handle it for them. Not a one-time offering that forms a company. But a long-term partner, where the incentives are aligned to provide ongoing support and handle all the administrative work. And also help setup and maintain the initial stack of software and accounts needed to get a business off the ground.
The bigger thing we've realized is that despite the fact that SMBs power the global economy, they're often overlooked when it comes to forming and maintaining a US company. Most founders globally don't want to raise US venture capital (and don't need a C Corp); they want to build a profitable bootstrapped business and try to create something from scratch or sell something online. SMBs don't raise millions in capital. SMBs don't make the front page of TechCrunch. But people who start SMBs are still entrepreneurs just like anyone else and they are overlooked (or not even supported).
We want to help small and medium businesses globally launch and maintain a US LLC, get access to US banking + and access US payments. This is what fires us up about working on StartPack. So many people out there don't even realize it's possible to form an LLC as a non-US resident and being able to make this reality come true for creators, e-commerce sellers and SMB founders, even one company at a time, is incredibly rewarding.
Let us know if you have any feedback, questions, comments or thoughts, we're more than happy to answer and looking forward to hearing what HN thinks of StartPack!