Ask HN: is it really hard to start a US business from Europe?
I've been working on a startup for the previous months. The original plan was to launch it worldwide, but unfortunately (or maybe it's a good thing to start small) this wasn't possible due to legal implications. I've decided that I will launch my product in the US only for the time being (until I figure out a way to bypass the European laws that prohibit what I'm doing). The reason that my product is allowed in the US is because the US has the First sale doctrine.
My question is: is it better for me to start a company in my own country (The Netherlands) or should I start a company in the US (LLC, Delaware) and still work from The Netherlands? I keep hearing that it is very difficult for non-US companies to get a foothold in the US because Americans would rather do business with American companies, but I don't know if this is true or just prejudice.
Thanks.
14 comments
[ 4.7 ms ] story [ 43.7 ms ] threadI neither know or care where browserstack.com (the last service I paid for) is based.
As for the legal and financial aspect of setting up in the US, I recommend looking through early posts on the freshdesk.com blog... there is great info there on setting up a US business (from India in their case).
About the legal aspects: I'm actively going to block users from other countries than the US, so I think the only laws that apply to my business are the US laws, but I will consult a lawyer about that.
Reading through the freshdesk blog now, nice site :)
I am American (lived in three countries) and can assure you that is not accurate. America has more foreign owned businesses than any nation on earth. When you think about it, America is almost entirely made up of immigrants. I have done quite a bit of business in Europe and would say that it would compare with London or Zurich.
That said, there may be other issues I'm not qualified to comment on. For example, if your business complies with U.S. law but not Dutch law, then I have no idea whether incorporating & operating it from the Netherlands will cause you trouble. Not being based in the U.S. may also make it more difficult to use U.S.-based payment processors.
The online platform will be fully localized for the US market. Unless you actively look for it, you won't notice that it's not a US company.
Obviously, opening a company will not grant you a SSN. It will be hell to simply open a bank account.
It is easy to open a company, close to impossible to actually have a business.
I own an useless LLC in Delaware, btw.
And why is your LLC useless?
When choosing a payment processor, making sure that it handles the whole process should save you the hassle of setting up a merchant account (an account that allows you to accept credit card payments) with a US bank.
I am Dutch too and I know a B.V. (Dutch limited stock company) is allowed to be a "holding" company that owns all the shares in a foreign company - but I went to business school and not law school, so there might be some fine print you'd want to consult a lawyer about.
It'll be an expensive hassle though, so if you're not dealing with B2B I'd recommend getting the "trust indicators" consumers are looking for by getting a U.S. street address with Earth Class Mail and possibly a U.S. phone number (through Skype) that forwards to a Skype account in your company. You can always go the U.S. incorporation route when you have the revenue to finance/justify it.
Then, when revenues justify the investment, I'd set it all up properly in the US with the help of a good attorney and/or accountant.
An important point here is that as a B.V. you would be governed under Dutch law if someone sued you. This should be disclosed in your terms and conditions as it will be considered unfair trade practice otherwise. If you feel you don't want to hire an expensive lawyer, I think the KvK has an export desk where they can help with these kinds of questions.
But it all depends on what kind of startup you have - if you have already validated the idea and have some investor/savings money I would hop on a plane and get it sorted there straight away :)